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The importance of openness
Before naming an executor — known in some provinces as an estate trustee or liquidator — it’s important to speak directly with the person you are considering.
“The most common issue, it surprises me, is a family that’s going to choose an executor without asking them first,” Coupar says. “Many appoint the eldest son or what have you, or their neighbor, without ever approaching them.”
Having a conversation with a prospective executor is critical because it allows both of you to ask questions and address concerns. That’s important because you don’t want there to be any surprises when the time comes for an executor to sort your estate.
You will want to make sure that whoever you choose is responsible and will honor your wishes as you’ve laid them out in your will, says Matthew Rendely, a partner with Whaley Estate Litigation Partners in Toronto.
“That person is representing your name, your legacy,” Rendely says. “They’re handling property you worked very hard to make, to earn, to save.”
Experts recommend that people revisit their wills if there’s a significant change in their financial situations.
The same goes for an executor. The best person for the job could change in the event of a marriage, a divorce, a move, or even physical or mental incapacity.
Characteristics of an effective executor
Estate law experts say executors should be:
Diplomatic: Executors should be able to communicate professionally and tactfully. They should be level-headed and have the necessary people skills to handle any thorny family dynamics. Not all estate matters are acrimonious, but executing a friend or family member’s wishes can be stressful, especially when many different personalities are involved.
Intelligent: The work involved in administering an estate can be complex and time consuming. Executors should recognize that they can retain professional advisers, such as a lawyer or a tax expert, to delegate certain tasks, says Shruthi Raman, an associate with Goddard Gamage LLP in Toronto.
Willing to do the job: Successful executors, in general, are people with serious temperaments who are eager to do well in life. If you are choosing among your children, there is usually one who stands out in this respect. “The best ones I meet are the ones that are just keeners. They’re the kids in class that have their arms up all the time,” Coupar says.
A resident of your province: Estate laws vary by province. If you lived all your life in Ontario and your executor is in British Columbia, it could be difficult for that person to understand specific legal and tax issues in the province where you lived. It can be time consuming, logistically challenging, expensive and stressful if your executor needs to gather large amounts of new knowledge to execute your wishes. Plus, a non-resident executor may have to post a bond in court, which is meant to protect the beneficiaries and creditors of the estate.
Financially savvy: You may have a simple will that’s easy to follow and execute. But in the case of more complex estates, it’s important to have someone who understands what needs to be done. Part of the executor’s job is to hire, when needed, tax or legal professionals. A good executor should be able to manage those relationships while communicating effectively with those professionals about the concerns of any of the heirs or beneficiaries.
Flexible: It may be a big time commitment to be the executor of your will. Say you’ve set up a trust for a family member who is still a minor. If your will requires the money in that trust to be held until an heir turns 21, then the executor may have to manage that trust for several years. It’s important to choose someone who will be able to dedicate the time needed to make sure your wishes are respected.
A family member vs. a professional
In his experience, Coupar says the majority of people choose a family member to be their executor. Yet, he often notices the person writing the will doesn’t always appreciate how challenging the role can be.
“It’s a job. It’s fraught with stress. It can be divisive,” he says. “Executors can often lose friendships with their siblings after this is done.”
To avoid that outcome, some people writing their wills opt to hire institutional trustees — neutral parties that know how to handle disputes and won’t be bogged down by emotions. A professional trustee could be a lawyer or someone in the trust division of a bank or another trust company.
“They will not have any biases with respect to the players,” Rendely says. “If there’s a claim raised, they will have the resources to carry out the administration of your estate in a professional manner.”
But it can be expensive. Fees can be negotiated, but experts estimate costs can run about 5% of the value of the estate.
Using an institutional trustee can make the most sense for high-net-worth individuals, people with complex corporate structures or multijurisdictional assets, Raman says.
“A corporate trustee in that situation would be helpful because they have the expertise and manpower in-house to handle a variety of issues,” she says.
People who name friends or family members as executors also can stipulate how much they are to be paid. Ontario and British Columbia allow an executor to charge up to 5% of the value of the probatable assets, Coupar says.
Whoever you choose as your executor will be responsible for fulfilling your last wishes. Those we spoke with say your decision should only be made after careful consideration.
“A will maker should really slow down, deliberate and choose their executor carefully,” Coupar says. “It’s too important.”