A friend or family member has made an important decision and they’ve asked you to be the executor of their estate.
Today we’ll look at some of the most frequently asked questions regarding being an Executor.
Why was I chosen?
It’s an honour to be trusted with this important task, however it does come with a lot of responsibilities. Although you don’t have to be an expert in law, taxes, investments or real estate – you may be expected to perform one or more of the following tasks; distribute assets, deal with financial institutions, creditors, lawyers, notaries, accountants, insurance companies and various government agencies. The person who chose you believes you are diligent, honest and up to the task.
What is an Executor?
A person named in the will who is responsible to settling the deceased’s affairs.
How difficult is it to be an Executor?
The degree of difficulty really depends on the size and complexity of the estate. Small estates with a house, car and some investments are more straightforward than estates with multiple beneficiaries, an assortment of investments or business ownership.
What are typical Executor Duties?
A comprehensive list of duties runs more than 40 tasks but here are some of the major jobs you’ll face:
- Make funeral arrangements and pay out of estate assets
- Complete routine matters – inform pension offices, life insurance company, financial institutions, attend to mail, memberships, vehicle insurance
- Ensure dependents receive enough money to take care of daily needs until estate is distributed
- Review Will and gather relevant information
- If required, you will be responsible to probate the Will
What are the legal responsibilities of being an Executor?
An Executor can be held personally liable if they are found to have breached their duties to the deceased and the estate. You may also be held liable with respect to any taxes owed. This is just one reason why it is important to access professional advice to ensure that all financial and tax requirements are effectively discharged.
Can an executor be a beneficiary of the Will?
An executor has the responsibility of treating all beneficiaries fairly and equally under the direction given in the Will. As long as there is no conflict of interest, there is nothing to prevent the Executor from being a beneficiary.
Does an Executor get paid?
An Executor is usually entitled to a fee which can be an amount stated in the Will. If the Will does not state this, then remuneration is established by the court prior to payment. The amount is usually based on the size and complexity of the estate. When the Executor is also a beneficiary and family member, the usual practice is to forego the fees, since they are taxable. Fees paid to professionals like accountants and lawyers as well as expenses such as postage etc. are paid out of the estate.
How do I explain to someone that I don’t want to be their Executor?
Be candid. Tell them the reasons why you feel you can’t or don’t want to do the job. Perhaps you live too far away, you don’t have enough time to devote to it or you simply don’t feel comfortable. It’s best to have someone that feels they can do the job effectively.
Can I say yes and then change my mind later?
Yes. If for any reason you decide you can’t effectively do the job you can usually renounce your position. It’s best to do this as soon as possible as it becomes more difficult the further into the estate process you are.
Should an Executor seek help from professionals?
Consulting with professionals can help save time, preserve estate capital, avoid personal frustration and provide peace of mind.
Choosing whether of not to accept the responsibilities of being an executor requires careful consideration. That the time to learn what will be expected of you and decide if you are willing to undertake this important task.
This column is brought to you by Michelle Weisheit CFP, IG Wealth Management and presents general information only and is not a solicitation to buy or sell any investments. Please contact your own advisor for specific advice about your situation