Choosing Your Executor

How to Choose Your Executor

May 2017

Your choice of executor is an important part of your estate plan. Your executor is the person that will carry out your wishes, implement the provisions of your will and distribute your estate. The role of the executor can be a big job, the skill set and time frame required will vary depending on the complexity of your estate. However even a simple estate where everything goes well may still take 12 – 18 months to administer. Finding the right person for your estate plan may be a complicated process and require the help of a legal professional, consider this article an introduction to the topic.

For starters we often suggest you choose your executor as the last step in your estate plan. Ideally by that point you will have a good understanding of the complexities of your estate, who your beneficiaries will be and the skills your executor will require.

A few factors to consider when choosing your executor:

  • The nature of your assets: for example if you have a farm, a business or assets in another country the responsibilities of your executor will be greater and may require specific skills.
  • Blended family considerations: Your executor will have to be able to work with all of your beneficiaries. There are times when not all family members get along.
  • Beneficiaries with specific needs: for example young children, or people with physical and mental disabilities. Your executor may be required to manage assets on their behalf for an extended period of time.
  • The age and residence of your executor: while not required an executor that lives nearby is convenient. As well, where your executor lives may determine the residence of your estate for income tax purposes. For this reason an executor in Canada is often suggested.

A few common selections for an executor:

  • Surviving Spouse: If your estate is fairly simple and you intend to leave everything to your spouse, having your spouse as an executor makes sense.
  • Adult Children: you can leave one or a few of your adult children as executors for your estate. If your children are responsible and get along they can be a good choice for executor. If there is a family business or farm, often the children will have the insight and skill set necessary to properly handle the business. However if there is a history of disharmony amongst the kids they should not be executors.
  • Business Associate or Trusted Friend: If a non-family member is competent and knows your beneficiaries they can make a good executor. If a business is part of your estate, having your business partner as an executor may not be appropriate as it creates a conflict of interest.
  • Trust Company: If your estate is large, complicated or involves long term assets a trust company may be an appropriate choice as executor. For example if you believe there will be disputes between family members a trust company will execute the wishes of your will impartially and professionally. As well if your will sets up a trust for your spouse, a child or a disabled individual, a trust company can assume the responsibility of managing the assets in the trust for as long as necessary. However the cost of hiring a trust company must be considered.

It is possible to combine some of the above choices and have more than one executor. In such a case certain provisions may need to be added to your will to solve disagreements between the executors. For example expressly stating in your will that decisions will be made by majority and appointing an uneven number of executors.

Lastly be sure to chat with your executor in advance, ensure they are comfortable taking on the responsibility. It is also wise to appoint an alternate in case, when the time comes, your desired executor is unable or unwilling to fulfill the role.

Choosing an executor is an important part of your estate plan. Please consider the above information an introduction to the topic. I suggest you consult your legal professional to ensure your executor is the right fit for your estate plan.

 

Clinton Orr B.Comm(hons.), CIM, CFP, DMS, FMA  lives in Beausejour and is a portfolio manager with National Bank Financial.

This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity.  As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group.