An executor is responsible for carrying out the wishes stated in your will after you die. This can include arranging the funeral, paying bills, and distributing the assets of your estate. Naming an executor is important for estate planning. You’ll want to choose someone who is willing and able to carry out the tasks required to settle your estate.

What does an executor do?

The executor is the person responsible for administering the estate of a deceased person. There are four main aspects to the job of being an executor:

Locating the will and applying for probate

• Locating the most recent will of the deceased.
• Applying to court for a Certificate of Appointment of Estate Trustee, otherwise known as probate. Probate is proving that a will is valid and that the named executor has the authority to distribute the deceased person’s assets.
• Probate fees, or the estate administration tax, is a tax charged on the value of an estate when a will is probated. Not all assets are subject to probate and, therefore, subject to the estate administration tax.
• Helping to arrange the funeral and determining if there are immediate needs of dependent children.

Identifying and communicating with beneficiaries

• Identifying who are all of the beneficiaries.
• Providing an overview of the estate administration process to the beneficiaries.
• Keeping beneficiaries updated on the status of the estate including its eventual distribution of assets.

Administering the estate

• Locating all the deceased’s assets and liabilities and making a detailed inventory.
• Locating banks, trust companies or other financial institutions where the deceased may have had accounts or a safe deposit box. Cancelling credit cards.
• Writing to insurance companies to obtain particulars with respect to any insurance policies on the life of the deceased.
• Reviewing and adjusting any insurance coverage such as on a house, boat or car.
• Arranging for their home to be emptied and cleaned, locks changed, and the property sold, if necessary.
• Completing and submitting forms to cancel government-issued cards such as the person’s driver’s licence, passport and health card.
• Determining whether there are any private or government pension amounts or death benefits payable to the estate and complete and submit forms to obtain payment, and other entitlements.
• Dealing with digital assets such as social and digital accounts like email, Linkedin, Facebook, etc.
• Keeping detailed records of any money spent as they have a duty to account to the beneficiaries. The executor needs to keep a record of expenses paid by the estate and what money the estate received.
• Dealing with the Canada Revenue Agency: Preparing and filing appropriate tax returns including the final income tax return for the deceased and getting the Tax Clearance Certificate from the CRA.

Distribution of Assets

• Paying out specific bequests in the will and distributing the remainder of the estate known as the residue (what is left after the payment of all debts and any specific bequests).
• This may include setting up and managing any trusts established in the will.
• Providing an accounting including compensation the executor will receive for taking on the role and obtaining the sign off of each adult beneficiary on the accounting and getting them to sign a release.

It’s important your will gives your executor the power and flexibility to carry out their duties — and ensure your assets are properly managed — until your estate is distributed.

For example, your executor should be able to make investment decisions to respond to changes in the economy or in the stock market. That way they can maximize the return to the beneficiaries — or protect asset values from declines.

Consider executor insurance. Executor insurance can cover any claims that are made against your executor relating to actions or decisions they make in settling your estate. Your executor can buy this insurance at the time of your death. Consider stating in your will that your estate will cover the cost of the insurance if you want your executor to have this protection.

What qualities make someone a good executor?

Your executor should be someone who:

• You trust to manage your affairs the way you want and is reliable.
• Lives reasonably close to you, so it’s easy to deal with your family and your assets.
• Has some knowledge of tax, investments and financial decision-making. And someone who knows when to seek guidance from others such as tax professionals or lawyers.
• Is sympathetic, good at getting things done and communicates well.
• Is likely to survive you.

The executor is a fiduciary and has legal obligations to the estate. The executor must exercise the care, diligence and skill that a reasonable person would use in dealing with the property of the deceased. They owe a “duty of loyalty” — the executor’s decisions and actions must solely be in the interest of the estate.

The executor must act with an even-hand. They must be impartial among all the beneficiaries. And they should be transparent by providing information to the beneficiaries.

Finally, the executor is responsible for handling the estates’ assets. And they must be able to show how each asset was dealt with.

How do you choose an executor?

Choosing an executor can take time. It’s important to choose someone you’re comfortable with.

Some tasks of an executor can be delegated. But there is a limit as to what can be delegated. The executor must ensure they supervise and are responsible for any losses that may occur.

There are a few considerations for choosing an executor, including:

Consider naming an estates professional as your executor

Many people appoint family members or close friends as their executor.  If you have a complex estate or are concerned about family conflicts, you might consider appointing an estates professional. This could be a lawyer or a trust company.

Consider naming more than one executor

You could name a family member and also a lawyer or trust company as co-executors.

Name a back-up

Naming a back-up executor can be useful in case your first choice for executor can’t take on the role.

Ask the person if they are willing to be your executor.

A person is less likely to refuse to act as executor when the time comes if they have been asked in advance. And if the person refuses, there will be time to choose someone else.

Even if you name just a family member or friend as executor, they may hire a lawyer or estates professional to help them take care of the administration of your estate. This person would be paid by your estate.

How do you pay your executor?

Your estate may incur fees and expenses during the administration process. This could include commissions on home sales, fees on investment transactions, estate administration tax (commonly called a probate fee) and your executor’s out-of-pocket expenses. Your executor is also legally entitled to a fee, even if they are a friend or family member.

Friends or family members may say they will not charge a fee. But this can change when the extent of the work of settling your estate becomes apparent. There have been many cases where the executor fees are settled by a court. Courts generally accept that the executor is entitled to about 5% of the estate’s value, plus a management fee. However, this is an approximation, and may be adjusted by a court.

It’s a good idea to discuss executorExecutor Someone you name to carry out the wishes that you set out in your will…+ read full definition fees with your family and your executor when making your estateEstate The total sum of money and property you leave behind when you die.+ read full definition plan. These fees are often a surprise to beneficiaries. It helps if they understand what the usual fee range is. They should also know that your executor could be entitled to additional fees if the estate becomes very complicated and requires more work for the executor.

Family members or close friends may choose not to charge an executor fee. However, this should not be your main reason for choosing them. You need someone who will do the job well, not necessarily cheaply.