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How to choose an executor

How to choose an executor

In this Q&A article, Mary-Alice Thompson, Law’92, certified specialist in estates and trusts law, offers practical advice on a very important estate planning decision – how to choose the person(s) who will act as the executor of your estate.

Ms. Thompson is a partner at Kingston law firm Cunningham Swan, and has been a sessional and guest lecturer at Queen’s Faculty of Law.

[Mary Alice Thompson]

Mary-Alice Thompson, Law’92, certified specialist in estates and trusts law.

Why do you need an executor?

Our will provides for our families, perhaps makes gifts to friends, or donates to a charity we care about. But no matter how carefully we draft our wishes, we won’t be around to make sure they are carried out. You need someone to do that for you. In Ontario, the formal term for this person is “estate trustee,” but the common word is “executor.” It’s an apt title – the job is to execute your desires.

What does an executor do?

The executor’s responsibilities are to find the assets of the deceased person and to bring them under their control. That may involve going to a bank, for example, and transferring the deceased’s accounts, changing title on a house or simply locking up after they’re gone. Executors are also responsible for finding out about any debts and taxes due, and taking care of them. Then it is their responsibility to liquidate the assets and distribute to the beneficiaries (along with any specific bequests; for example, a particular chair to Aunt Sally or shares to Uncle Jim).

How do you choose an executor?

This may seem strange, but picking an executor is not bestowing an honour. However honoured the person may be to be asked, you are giving them a job to do. It will take six months to a year, quite possibly longer, to complete the work, and absorb a fair bit of the executor’s time.

For that reason, we need to be careful when choosing an executor. What qualities to look for? Most important is trustworthiness. You have to trust them. Because of the commitment involved, a willingness to get along and do the work is important, too. Don’t appoint someone who is going to dither and waste time.

There are other qualities to consider in an executor. It’s worth thinking about their relationship with your beneficiaries. Don’t appoint someone who is going to be at odds with them. You might also want to look at younger executors, although it is tempting to pick a sibling or a close friend. But think about it: When you die, the likelihood is that your generation, even if they are around, may be unwell, or just tired, and unable to undertake what needs to be done. Think about appointing your children, younger friends, or nieces and nephews. You probably plan on leaving something to your children, but that doesn’t mean they can’t be your executors – in fact, it is very common for people to be both executors and beneficiaries.

Is it typical to have just one executor?

It varies. People often have more than one executor, and it can be a good way to get different skills, or to have a local person to open the safe deposit box or check on the house if one executor is in another province. If you have four kids, you can appoint them all, but I usually don’t recommend having more than two or three.

Remember, executors typically act unanimously. They must agree on every decision made, on every cheque paid out. If you are going to have multiple executors, first make sure they all get along. Think about where they all are, too – there can be legal problems with executors outside the country, such as having to post a bond or making the estate a foreign trust. And you don’t want to be sending an original will out of the country.

Remember, whoever you pick as your executor is under no obligation to take on the job. This can create problems if, after you’re gone, they turn down the job. It’s always best to ask a potential executor beforehand – but don’t delay doing a will until you have had the full discussion. Also, if you decided to go with one executor, appoint an alternate in case your first choice can’t carry out the job.

What about using a professional executor? Say, a lawyer or an accountant?

Because wills are legal documents, and they can often include complex financial arrangements, some people think it might be best to have a professional serve as executor – lawyers and accountants are obvious choices, and trust companies will also act for you.

There are pros and cons to using a professional executor. I have worked with very good executors who had no legal or financial background, but just got on and did what they needed to do.

Remember, the executor can always get professional advice. People might resist using a professional executor because they’re going to charge them, but anyone who is acting as an executor is entitled to what the courts deem “fair and adequate” compensation, which is roughly five per cent of the value of the estate. And I would encourage executors to be paid – that way they will take their work seriously.

On the other hand, when your executor is also a beneficiary, they may be better to waive compensation. If you’re going to be paying for the service anyway, maybe using somebody who actually knows their onions isn’t such a bad idea. You might want to look at a professional executor if it’s a very complex estate, or there is discord in the family, or there is some other special consideration – a trust for a disabled child, say, that is going to run a long time but you don’t want to saddle your family with administering.

These are just the broad strokes. You can modify the rules for your executor in your will in a wide variety of ways – stipulating, say, that co-executors can make decisions based on a majority rather than unanimity, or adding in a clause that protects them from certain liabilities. Ultimately, a well-drafted will that sets out your wishes in a clear, step-by-step manner, and a well-chosen executor will ensure that your last wishes are carried out.

This article has been supplied by the Queen's Office of Advancement. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. The information is current to May 1, 2015. Although the author endeavours to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Readers are cautioned to consult their own professional advisors to determine the applicability of information and opinions in this article in any particular circumstances.

[cover - Queen's Alumni Review Digital Special Edition Fall 2015]