Who Can Be Executor Of A Will?
Executor. Estate trustee. Personal representative. These are some of the names that get used to refer to the person or professional trust company that will manage your affairs and carry out the wishes in your Will after you die.
When you die, you need someone to administer your estate on your behalf. An executor is someone you’ve appointed to carry out the wishes as expressed in your Will. Where this is a person, it is often a family member, close friend, or your executor can even be a professional that you work with (like a lawyer or accountant, although many aren't interested in accepting the role) It is also possible to name a professional trust company to administer the estate after you die.
But what’s the best way to choose an executor? Are there any limitations to choosing someone who can represent you?
Keep reading to find out:
Who can’t be an executor under your Will
Who can qualify as a potential executor
How to choose an executor
What it means to appoint a foreign executor
Whether or not you can name more than one person as co-executors
When should I consider naming a professional trust company
The difference between an executor and a trustee
A list of executor responsibilities
When an executor would be removed
Who can’t be an executor under your Will
First, let’s start with who you can’t name as executor of your Will:
Someone who is a minor can't act as an executor, so it's best not to name them for the role
People with disabilities who are unable to carry out executor responsibilities due to their disability
Animals––we shouldn’t have to say it, but we’re being careful
Who qualifies as a potential executor?
An executor is someone you’ve appointed in your Will to administer your estate following your death. Here’s who you can choose:
Spouses
Adult children
Parents
Another family member
Friends or acquaintances
Neighbours
Professional trust companies
Keep in mind that people who are beneficiaries––someone who receives assets from your estate––can also be executors. An executor may also witness your Will but only if they are not a beneficiary. And even then, if you can find someone else to do it, it’s probably a good idea.
Choosing an executor to administer the estate
When you’re choosing an executor, the most important thing to consider is trust.
Executors carry a large burden of responsibility. Depending on its complexity, the administration of your estate can take many months, even several years. So you need someone who’s capable of carrying out many administrative tasks over a long period of time.
Here are some characteristics you should prioritize when you’re choosing an executor to administer the estate:
Trustworthy
Organized
Diplomatic
Communicative
Calm
Great time management skills
When writing your Will, start by asking your chosen executor whether they’re okay with taking on the responsibility. Be transparent about the tasks they would be assuming. Get a full checklist of executor responsibilities here.
If your chosen executor agrees, make sure to review your wishes with them, in detail. In Canada, it’s recommended that your executor be a Canadian resident to simplify the process of administering the estate. If for any reason you can’t or don’t want to appoint a Canadian citizen as executor, you’ll need to be aware of some complications.
What it means to appoint a foreign executor
Non-Canadian residents are legally allowed to be executors, but they’ll need to jump through some extra hoops to complete their duties and administer your estate. Here’s what you’ll need to know:
The executor might need to post a bond
When your executor is applying for probate––one of their first tasks––they might need to post an administration bond that’s of equal value to the estate. Depending on the size of the estate, this amount may be large and cost-prohibitive.
The executor always has the option to bring forward a motion to ask the court to waive the bond, but they’ll be required to pay any legal fees associated with the request.
The estate might face extra tax implications
When the executor isn’t a resident of Canada, the entire estate may be classified as foreign. That means the estate could lose out on preferential Canadian capital gains and dividend tax treatments. There’s also a risk that the estate would be subject to foreign tax laws within the executor’s country.
An alternative option
If you can’t find a Canadian resident to act as executor to your Will, you can consider appointing a professional trust company instead. You’ll avoid many of the complications of appointing a foreign trustee, and you’ll have a local point person who can distribute assets to beneficiaries in a timely manner. But, there are costs associated with appointing a professional trust company, so it’s important to understand what those are before going in that direction.
With Epilogue, you have the option to name a professional trust company as the executor of your Will.
Can I name more than one person as the executor of my Will?
Yes, you can name more than one person to be co-executors of your Will.
But is it a good idea? It depends. It’s certainly simpler to name one primary executor and one backup, but as the person writing the Will, the decision is up to you.
If you’re feeling apprehensive about handing over all that responsibility to one person, you’re allowed to appoint more than one person. It’s not uncommon for parents to name all their children as co-executors to avoid favouritism, for example.
Keep in mind, however, that this structure introduces complexity to the management of your estate because all executors must agree on how to interpret your Will (unless your Will stipulates that decisions don’t need to be unanimous). Even then, things can be complicated when one executor or more disagrees on what to do. This may cause disputes, especially between family members, or delays in asset distribution.
Is an executor the same as a trustee?
While an executor can also be a trustee, they’re not necessarily the same thing.
While executors handle the management of the estate as a whole, they don’t handle “testamentary trusts”: assets that are distributed to beneficiaries at a later date or on a schedule. That said, it is often the case that your executor will also be the trustee of the trusts created under your Will.
Reasons to establish a trust
Minors can’t receive assets until they reach a certain age––which can be determined by the testator
“Henson trusts” can be created for disabled beneficiaries who rely on government assistance and might lose benefits if they receive a lump sum payment
A spouse or other beneficiary who can’t manage their assets for whatever reason
It is very common to have the same person act as the executor and trustee.
What does an executor do?
Now that we’ve discussed who can or can’t be an executor, you may be wondering: What exactly does an executor do?
Well, we can tell you that an executor’s first duties aren’t exactly a great time. The first thing they’ll need to do is assess the complete financial value of the estate, including all real estate, cash, gifts, etc.
An executor must collect paperwork
To fulfill this onerous task, executors gather a lot of paperwork.
All bank account records
Tax returns
Investment portfolios
Deeds and other property documents
Records of debt
Life insurance policies
Pension plans
Company share ownership records
Digital assets, including your email address account and social media accounts
When this process is complete, the executor should have a solid grasp of how to carry out the testator’s wishes. That’s when they’ll start to clear up any confusion or disputes over the interpretation of the Will between beneficiaries, which requires transparent documentation––and stellar organizational skills.
An executor has many important responsibilities
The executor will need to file tax returns, pay taxes, and settle any debts before anything can be distributed to beneficiaries. The executor has a lot of responsibilities, which can include:
Interpreting the Will
Distributing assets to beneficiaries
Keeping beneficiaries informed on the progress
Hiring professional advisors to help with the administration of the estate
Can an executor be replaced?
Let’s say you’ve been named the executor of someone’s Will, but one of the beneficiaries doesn’t like that you’ve been chosen. Can they replace you with themselves or someone else?
The answer is, maybe. Under some circumstances, beneficiaries can have some rights reserved to take legal action to remove an executor.
Reasons to remove an executor
Keep in mind that the court’s primary legal responsibility is to the person who died who wrote the Will. If the executor is interpreting the Will correctly and acting in the best interest of the estate, the court will likely not remove them.
But there are some valid reasons for the removal of an executor:
The executor may be mismanaging the estate or refusing to carry out the terms of the Will
There’s evidence that the executor may have received unlawful compensation for their role
There’s a paper trail that shows the executor is refusing to provide an accounting of estate assets
The executor has committed a crime
The executor has filed for bankruptcy
The executor has become incapacitated in some way that can be proven
If you know you can remove an executor, take legal action with other family members or close friends. When considering executor removal, the court considers how close heirs were to the deceased when making their decision.
Lawyers can also just be expensive––and you’ll probably want some help with the legal costs.
Choosing the right executor can mean the difference between a straightforward estate administration process that delivers assets to beneficiaries in a timely way or a complex nightmare that can drag on for years. Make sure to choose an executor you trust so that they carry out your wishes effectively.
