For many Canadians, being chosen to act as an executor is an "honour". However, many of us are unaware of the sometimes complex and challenging role that this can be.
Executors are entrusted with the responsibility of administering the estate and carrying out the wishes of the testator as expressed in his or her will. As a result, choosing the right executor is one of the most important and sometimes difficult decisions you can make in planning your estate.
Before drafting your will, it is important to think about who you want to appoint as your executor and you will want to take great care in making this decision. Set out below are some considerations to think about before deciding who you want to choose as your executor(s).
1) Characteristics of an Executor
Who do you think is best suited for this position? Most people tend to choose a family member or a close friend to act as their executor. However, being an executor is not always an easy task and it is important to choose a competent person for the role. In our experience, it is a good idea to pick a leader, someone who is able to manage and attend to the administration issues in your estate. When choosing an executor, you may want to make this decision from a business standpoint. At times, it may be difficult to separate emotion from the equation; however, it is important to not only choose someone because of family ties or closeness, but to choose the person who is best suited for the job.
2) How Many Executors is Too Many?
Every situation is different. In some cases, one executor may be ideal, whereas in other situations it may be most prudent to have two or three executors appointed. You may want one or two executors who are family members or close friends and one executor who is an accountant or a lawyer. Having more than three executors could be problematic as executors may have difficulty in reaching a consensus on important decisions.
3) Responsibilities of Executors
An executor is a fiduciary and has obligations to manage the estate prudently. Initially, an executor must attend to immediate funeral arrangements. Before distributing the estate, the executor must fulfill another key duty -- paying any debts owed by the deceased. The executor must also determine the liabilities of the estate, which may include advertising for creditors.
Legislation assists an executor in ensuring that he or she acts prudently. According to s. 53 of the Trustee Act, an executor may not be liable if he or she advertises in a newspaper for creditors within a specific period of time regarding any outstanding debts owed. Although this does not extinguish the debt, it may protect from personal liability. However, this is not an absolute protection and executors must act prudently in their role as a fiduciary.
Moreover, the executor must confirm that the Will they are operating under is the Last Will and Testament of the deceased. If there is any doubt, the executor can seek probate, which is court confirmation that the Will is in fact the Last Will and Testament of the deceased.
When choosing an executor, it is important to consider the above factors and determine who would be best suited to act in this role. It is essential to remember that executors have many responsibilities and obligations, and the person you choose should be well-suited and competent to act.
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