When John Wilson was asked to act as an executor for his second cousin’s estate, he was honoured. The cousin, who died last year at the age of 97, had lived with Mr. Wilson’s family when he was a baby, and was the last relative on his father’s side of the family.
The will seemed simple enough to Mr. Wilson, a Toronto real estate broker with a background in finance. The estate was being divided between a church and two charities. However, as Mr. Wilson began to research the executor’s tasks, he realized there was more to it than he had bargained for. There were dozens of administrative duties that would take months, maybe even years to complete. After studying an estate settlement kit his bank provided, he decided to hire the bank’s estate services team to handle all of the tasks.
“I had never been an executor before,” said Mr. Wilson, who led a busy life running a business and raising two teenaged girls. “I decided that it was best to have someone else involved. The one thing that really pushed me in that direction was the fact that there’s personal liability if you don’t do this thing correctly.”
John Hamilton, president of RBC estate and trust services in Toronto, says executors often accept the role without fully realizing what’s involved. An RBC survey shows one-third of Canadians have been asked to act as an executor, and a chief concern for 39 per cent of them is a lack of knowledge about their responsibilities. “A lot of Canadians think it’s an honour to be named as the executor, but lots of families don’t even talk about it.”
Mr. Hamilton is named as executor for his father, who lives in Burlington, Ont. But with five siblings spread across Canada and the United States, settling the estate will be complicated. He plans to hire professionals when the time comes.
Fourteen months into the process, Mr. Wilson says he is pleased with his decision to use executor services. “It’s not inexpensive, but I feel it’s well worth it to make sure everything’s done correctly.”
Mr. Hamilton offers some advice on how to prepare for executor duties:
Talk to the beneficiaries. Settling an estate can often create family conflict or stir up existing discord. Make sure your family talks about how the assets will be divided as part of the estate-planning process to clear up any misunderstandings. An executor needs to be able to communicate with beneficiaries and balance any potential conflicts of interest.
Understand the time constraints. Settling an estate can take at least six months, sometimes even years if the will is complex. This can be a burden for people with busy lives if they are not prepared ahead of time.
Know what you’re getting into. Depending on the estate, there can be up to 70 administrative duties for an executor to complete. These include safeguarding assets, reviewing insurance coverage, closing financial accounts, investigating and paying debts, taxes and fees, assisting in the set up of trusts and distributing bequests to beneficiaries. Educate yourself about what’s involved so there will be no surprises when the time comes.
Understand the legal liabilities. As an executor, you can be held personally liable if you make a mistake that creates a financial shortfall in the estate. For example, if you have not properly advertised for creditors and one emerges after you have distributed the assets, you are responsible for settling the claim.
Consider getting help. If you don’t think you are up to the task of being an executor, help is available. Many banks offer full-service estate settlement packages with a tiered-fee schedule that ranges from 2 to 3.5 per cent based on the estate’s assets. Some offer partial services for executors who want to do some of the work themselves.
