You’ve worked hard and saved well. Perhaps you’ve bought a home and raised children. Now, if you haven’t done so already, it’s time to ensure you have a plan for your estate. That means having a proper will drawn up and naming a capable executor.
Picking an executor is a crucial part of estate planning, That’s because this person or people will ultimately be responsible for carrying out the terms of your will.
But who to choose? Your spouse? That’s what many people do. If you don’t have a spouse, you could name an adult child. No children? Then maybe a good friend, or your lawyer? Your decision will take some careful thought.
Finding the right executor for your will
Certified financial planner Mark Halpern is also a trust and estate practitioner. He suggests the top three qualities to look for when choosing an executor:
1. Comfort level. “First and foremost, the person should be trustworthy, someone you are comfortable with. Someone who ultimately will carry out your wishes as you want them to be,” says Halpern. Name adult children as co-executors only if they get along, he advises: “If they don’t get along now, there is potential for even more conflict when it comes to the will.” Do you feel your children might argue about everything? Then appoint an unbiased third party as executor. That could be another family member or your accountant.
2. Time. Executing a will takes time. Your executor must have the time to do the job. To follow your wishes, your executor will start by gathering up your assets. That can include anything from bank accounts to real estate to investments. Someone might have owed you money. You might even have money coming to your estate from a financial transaction like a demutualization. Demutualization is what happens when a mutual insurance company, owned by its policyholders, goes public. Eligible policyholders may receive shares or cash.
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The next step is to pay any debts you’ve left behind. Finally, the executor divides up whatever is left among your beneficiaries. The process can take months. That’s especially true if there are several beneficiaries, multiple marriages, or other complications.
3. Willingness to ask others for help. Some estates are simple and straightforward. Your executor may be able to tackle all the work alone. But if there are issues, your executor needs to know enough to seek professional help, says Halpern. That could mean contacting someone like an estate lawyer and/or a tax accountant.
Once you have identified your potential executor, be sure to ask if they’re willing to do it. And don’t take it personally if they say no. As we’ve said, it’s a big responsibility.
- Learn more about estate and financial planning services.
I’ve been asked to be an executor — What do I need to know?
If someone asks you to be an executor, here’s what to think about before saying yes:
- Family relationship. How well do you get along with the members of the family? Be realistic; the stress of a death in the family can bring out the worst in people. “Nowadays, you can even buy executor’s insurance to protect yourself if the beneficiaries sue you,” says Halpern. “They could do so if they believe you acted improperly or with prejudice.”
- Distance. The world is a smaller place, thanks to electronic communications. But some things are still easier to do in the same province, country, or time zone. That includes making any necessary inquiries on behalf of the deceased person. (This is also an important consideration when you name your own executor.)
- Is this really something you want to do? Being an executor can be stressful. It requires filling out forms and being in charge of paying taxes. That includes filing an income tax return for the year in which the person died. You must also cancel Canada Pension Plan and Old Age Security payments as soon as possible. If you delay, the estate will have to pay them back. You may even have to advertise for possible creditors. Are you prepared for the commitment?
You can opt out of being an executor. But you must do so before you begin to deal with any of the estate’s assets. The best time to decline is as soon as you’re asked. Once you start, only a court order can relieve you of your responsibilities. That’s another reason to name an alternate executor in your will. (The main reason for naming an alternate is if your first choice dies before you do.)
Don’t have a suitable, willing candidate? A professional such as a lawyer or trust company can look after your estate, but for a price. It’s wise to look into professional fees ahead of time, says Halpern.
The duties of an executor are many, but you can get help from sources such as Your duties as executor, from the B.C. branch of the Canadian Bar Association.
- Read more: Questions to ask when writing your will
This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.