You’ve Been Asked to Be an Executor – Now What?

Many of us have been asked to take on the responsibility of acting as executor for our parents or siblings, or maybe close friends.  In some cases, people have been appointed without even being consulted.

Some people consider it an honour and sign of respect to be asked to take on the responsibility for ensuring that their loved one’s final wishes are carried out.  Others, who have been in this role previously, never want to do it again.

I am strongly in the latter group as I have had this experience three times already – and each time was different.  Unfortunately (for me) other relatives now seem to think I’m the ideal candidate because I’ve become familiar with the process.

Serving as an executor can be stressful and time consuming, even for those with a strong financial background. There’s lots of work to do. Even the simplest estate can take one or two years to settle.

Would you know what to do?

 

Initial preparations

Sit down with the person who appointed you and go through the will together to get a better understanding of that person’s wishes.

Inquire about burial and funeral preferences.

Suggest that an inventory of assets and liabilities be prepared as well as the location of the assets.  You don’t need to know exact dollar values at this time, but you do need to know what there is.  Executors can spend a lot of time searching.

You’ll need some knowledge of investing and tax matters.  You may have to make investments on behalf of the estate or sell some securities to raise cash for legacies, taxes and other costs.  You will need to prepare estate tax returns in a timely manner.

Your Responsibility as an Executor

A will is a legally binding expression of how a person wishes their property to be distributed.  As an executor, your responsibility is to administer the legal and financial requirements of settling the estate to carry out those wishes.

You would control all aspects of the estate’s administration – identifying, managing and protecting the assets – until they are distributed to the beneficiaries, or placed in a trust.

Before you heartily agree to being someone’s final representative, make sure you understand what will be required of you and that you have an adequate amount of time and the ability to devote to the task.

I have read that there can be as many as 50 to 70 duties to perform. Here is a general list of some of the more common duties an executor must deal with.

  • Locate and review the will.  Determine if the will should be probated. If the estate is small and uncomplicated, probate may not be necessary, for instance if assets are held jointly and/or beneficiaries are named in RRSP/RRIF/TFSA’s and insurance policies.
  • Make funeral arrangements. Estate funds can be used to pay for funeral expenses. The funeral home will provide copies of the death certificate. Get lots of copies. You’ll need them to close accounts, claim insurance and other death benefits, and change ownership.
  • Meet with an estate lawyer who will represent the estate in all legal matters.  Among other duties, the lawyer will arrange for probate of the will, which will give you the legal authority to act on the estate’s behalf.
  • Determine if any family members have immediate financial needs.
  • Notify all interested parties of the death.  Notify government agencies, financial institutions, creditors, investment firms, insurance companies, utilities and landlord, if applicable.
  • Inventory and take custody of estate assets.  Establish value of assets from bank and investment account statements and real estate deeds, file life insurance and death benefit claims, apply for CPP benefits, list contents of safe deposit boxes and keep detailed tax records. Update home and car insurance. Collect any money owed.
  • Open estate accounts.
  • Pay financial obligations.  Pay outstanding debts – loans, credit cards, utilities, etc.
  • Complete final tax returns and obtain a clearance certificate.
  • Pack up the deceased’s personal effects.  Distribute, sell, donate or trash, as necessary. 
  • Sell their residence.  Until it’s sold you need to keep up with outdoor maintenance – mowing the law in summer and shoveling the snow in winter – and regulate the heat so pipes don’t freeze.
  • Distribute the inheritance to the beneficiaries according to the will.  Pay any legacies and charitable bequests.
  • Make trust arrangements, if any.
  • Close estate accounts.  Prepare a full accounting of the estate’s administration and submit it to the beneficiaries.

Dealing with beneficiaries

Be prepared to act in an impartial and objective manner so you can best balance the needs of all the beneficiaries and reduce potential conflicts with squabbling family members.

When my father in law passed away there was a huge disagreement among the siblings about whether he wanted a burial or cremation – not something you can take your time to resolve.

Executor fees

Because executor duties can be very time consuming, you are allowed to charge the estate a one-time fee for your time – usually a percentage (2-5%) of the estate’s value unless you are also a beneficiary in the will.

Note that the executor fee is taxable income to you.

The bottom line

While it’s flattering to know that you are so highly regarded, you should think carefully before you accept the important role of executor, especially if you have never done it before. It’s a big responsibility.

Seek professional assistance to help you carry out the duties, particularly if you don’t have the time or skill for the complicated tasks.

Don’t feel guilty if you feel you can’t take it on.

 

 

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