When Ken was asked to be co-executor by his step father, Graham, he said “yes” right away because it was the right thing to do. Graham also appointed a daughter from his first marriage, Jessica, to be co-executor. Ken and Jessica hadn’t seen each other in years because of strains in family relationships. However, Ken was confident that Graham, a retired accountant, would have put his affairs in order.
What exactly is an executor?
An executor – (in Quebec, the term is liquidator) is responsible for administering someone’s estate. The executor must follow the wishes expressed in that person’s will and all applicable laws. An executor may be a family member, a friend, a trust company or a professional such as a lawyer or accountant. The executor’s to-do list generally includes (but is not limited to):
- Locate the will
- Safeguard assets
- Value assets
- Cancel subscriptions and benefits
- Cancel government-issued documents
- Manage digital accounts
- Apply for death and survivor benefits
- Apply for probate
- Find all beneficiaries
- Communicate with beneficiaries
- Determine the estate’s assets and liabilities
- File final tax returns
- Apply for a tax clearance certificate
- Establish trusts if needed
- Distribute assets to beneficiaries
After Graham passed away last fall, Ken quickly realized that his role managing the distribution of the sizeable estate would be more complex than he expected. The estate included a cottage, a corporation, a trust, life insurance, and an aggressively-allocated investment account that was at risk in volatile markets. The heirs were a blended family with diverse perspectives, all understandably committed to protecting their own interests.
Adding to the challenges faced by the executors, Graham’s will didn’t allocate assets equally. One side of the family would inherit the cottage and corporation, so other assets were left to the other side of the family. And, while unequal isn’t always unfair, because Graham hadn’t discussed his will with anyone except his wife, some heirs questioned his intentions.
In addition, Graham wasn’t specific about certain bequests. One in particular was emotionally challenging: “personal effects” were left to Graham’s adult son Michael, but that would require him to visit Graham’s widow’s home, pick and choose from the valuable furniture and art there, and arrange for it to be moved out.
Ken and Jessica agreed to engage an estate lawyer to guide them through some of the complexities of the estate. However, it was surprisingly hard to find one who was available and who didn’t have a conflict of interest either knowing or representing one of the many heirs. The co-executors also discovered estate lawyers can be extremely expensive, in this case charging more than $1,000 an hour. Even her clerk charged about half that amount an hour — still very costly.
Another complication: when the estate lawyer searched for the charitable foundations that were named as heirs, one of them no longer existed. Even though there was a similar foundation established by the same charity, Ken and Jessica had to get every beneficiary’s sign-off to reallocate that bequest. There was also a bequest of a boat that Graham had sold after he wrote his will, and questions about whether that heir should get something else instead – though executors can’t make those types of decisions.
An honour with strings attached
Being asked to be an executor can feel like a great honour – and it is – but it can also be time-consuming and stressful. That said, many executors are reluctant to charge a fee for their services, even though charging 3% to 5% of the estate may be permitted if a fee isn’t explicitly stated in the will. Also, executors are financially liable if anything isn’t distributed correctly – though executor liability insurance is available to manage that risk.
Ken’s advice when considering accepting the role of executor:
- Ask if you can see the will so you can be aware of elements that will increase the complexity of administering the estate
- Suggest that the will be reviewed by a tax expert who may have advice on ways to structure the estate to save taxes
- Recommend that bequests be discussed openly and explained to heirs to avoid the family conflicts that can arise when gifts aren’t equal
- Learn as much as possible about the relationships within the family, including areas of tension, especially if you’ll be dealing with a blended family
Ken doesn’t regret serving as executor, and he would do it again for another close friend or family member. One of the best things to come out of it has been more frequent interactions with his siblings and getting to know his co-executor better. He’s also learned a lot that will help him with his own estate planning.
Ken’s biggest piece of advice for others considering taking on the role is to understand what you’re saying yes to. Being an executor is a big responsibility and time commitment, but it can also be very rewarding. After all, you become the person (or part of a team of co-executors) who ensure that the intentions of someone you care about are carried out.
If you’ve been asked to be an executor, or if you’re considering who would be the best executor for your own estate, talk to your Edward Jones advisor. Your advisor can share an executor checklist, discuss options for executor compensation, and help you decide if executor liability insurance makes sense for your personal situation.