Most individuals, when drafting Wills, spend a fair amount of time deciding how assets should be dealt with after they die.  However, one significant aspect of estate planning often does not get the attention it deserves: the appointment of the executor of the estate.  Sometimes the choice may seem obvious (such as appointing a surviving spouse or an adult child), but no matter how straightforward the decision may appear to be, it is important to give some serious thought to what that person’s role will be in the administration of the estate.

The executor, also known as the personal representative, “steps into the shoes” of the deceased in order to deal with the deceased person’s financial affairs.  The executor’s responsibilities begin from the moment of death and do not end until the last transfer of funds is made to the beneficiaries and the estate is wound up. Some people choose just one person to act as an executor, but it is possible to appoint several individuals or to have a bank or a trust company take on the role.

The executor has a number of responsibilities. Below is a partial list.

The executor:
- locates the Will
-makes funeral arrangements
-determines the whereabouts of beneficiaries
-obtains a death certificate
-applies for death benefits
-cancels pension plan payments, driver’s license, health insurance, credit cards, subscriptions to newspapers or magazines, cancels any cable, internet, or telephone services, and cancels any club memberships
-redirects mail
-obtains financial information about the estate and prepares an inventory of all assets and liabilities (including any tax liabilities)
-applies for a Certificate of Appointment of Estate Trustee, if necessary
-pays all legitimate debts of the estate
-prepares and files all tax returns (usually with the help of a professional)
-transfers assets to beneficiaries or to trusts established for the beneficiaries

The executor has a duty to act in the best interests of the beneficiaries and is required to deal with the estate according to the provisions set out in the Will. In addition, the executor must obtain the approval of a majority of the beneficiaries before he or she can be discharged from his or her responsibilities, or the executor could be held personally liable to the beneficiaries for any problems that arise during the administration of that estate. The executor cannot profit personally from acting as an executor, but is allowed to take compensation (in accordance with Ontario law), unless the Will provides otherwise.

Acting as an executor also requires a significant time commitment.  A general rule of thumb is that most estates take a year (or more) to be wound up or completed.

In addition, no one can be forced to take on the role of executor. Consequently, although someone may think that the person they’ve chosen to deal with their estate won’t question the appointment and will gladly act to carry out the final wishes expressed in the Will, my experience working in this area has shown that this is not necessarily true.  There may be many reasons why someone cannot or will not act as an executor. Perhaps that person lives on the other side of the country, or the executor and the beneficiaries do not get along, or there is a significant legal or tax reason why the named executor should not act (for example, a U.S. resident executor, acting alone, may create a U.S. tax issue for the estate, even if the testator was a Canadian who never lived in the U.S.). Or perhaps the person simply had no idea that he or she was named and was just not prepared to take on the role and all of the duties and responsibilities that being an executor entails.  As one can imagine, the appointment of an executor that refuses to act when the time comes makes the administration of the estate that much more complicated (and costly!). 

The administration of an estate can be a complex and lengthy process. Therefore, it is important to carefully consider who should be appointed as the executor. Sometimes, what may seem like an obvious choice may not be the most prudent choice for the estate or the estate’s beneficiaries. 

Susanne Greisbach is an Associate with BrazeauSeller.LLP.  She practices in the areas of Wills, Estates and Tax Law.  To contact Susanne, please go to www.brazeauseller.com or email Susanne at [email protected].