BEING AN EXECUTOR
September 14 2016
Did you know that an executor is personally liable for the estate?
Many of us have received a request from a friend or family member to act as the executor of their estate. Acting as an executor can be a daunting task that takes time, knowledge and patience. When acting as an executor, you owe a duty of care to all persons interested in the estate, so the role should not be taken lightly. Before you accept the role of executor, consider the following:
- Availability – As an executor, you face sudden and intense demands on your time, especially at the beginning of the settlement of the estate.
- Complexity – Generally, the larger an estate, the more complex tasks you will have to complete as the executor. This could include dealing with foreign investments or property, business succession, and family law issues.
- Competency – To act as an executor, you should have familiarity with basic financial concepts and some technical knowledge of business, law, tax and accounting is helpful.
- Relationships – Handling an estate is not just about getting the job done. Emotions are high as heirs deal with their grief and the executor must be able to deal with difficult issues in a way that preserves harmony among all concerned.
Consider a corporate executor or trustee
You can get help as an executor in handling an estate. Many professionals, such as accountants, lawyers, and trust officers, are experts in the more technical and complex areas of estates. Their reasonable fees are an expense to the estate and not to you personally.
Administering an estate can be a complicated process, and being an executor can be even more challenging. Selecting the correct executor or trustee can be a critical step to success. In today’s world, estates are no longer simple with assets and beneficiaries residing in different provinces or countries, holding shares of private companies and complying with complex tax rules. You can remove concerns about family conflict, burdening of grieving family members and appropriate treatment of complex matters by naming a qualified, unbiased, specialist such as a corporate trust company in your will. Where minors are involved a corporate trustee can be a lasting stable choice as a trustee.
You can also get help in handling parts of the estate you just do not want to complete. However, you must be careful not to hand over your control of the estate as the law does not permit this type of delegation. Further, your compensation as an executor may decrease if you have others carry out your work.
If you have been named an executor and are not sure where to start or simply want a better understanding of your duties, we can help!
Interested in learning more?
We're happy to provide you with a copy of our education article on Being an executor. Contact your Richardson GMP Investment Advisor to get yours today.