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estate planning

Mess and confusion.

Appointing someone you trust as the executor of your will has often been seen as a sign of respect, even an honour.

Yet for the person who is named, it is also, as Douglas Gray, co-author of The Canadian Guide to Will and Estate Planning, put it, "probably the most stressful experience you'll ever have."

Squabbling family members, multiple beneficiaries, assets that are outside the province or country where the estate trustee lives – complications can abound. If a functioning business is involved, or a trust for a child, even more complexities arise.

"What I tell all my clients when they take on the job, or when taking their instructions as to who they will appoint as executor, is that this is a job," said Robert Coates, a certified specialist in estate and trust law based in Toronto. "The person who takes on this job will have lots of work to do. It is very time-consuming and intensive. You have to be a good record keeper, and your liability is great."

For residents of Ontario, both the potential hassles and liabilities increased markedly last year because of new provincial probate-filing rules.

Previously, said Carol Bezaire, senior vice-president, tax and estate planning, and strategic philanthropy at Mackenzie Financial, "you would put in your best approximate valuation of the assets and then pay the probate taxes."

Now executors must fill out a seven-page Estate Information Return, "and they are looking for a lot of detail in it," she explained. The details the Ministry of Finance wants to see include property-tax roll numbers, bank accounts, even vehicles and vessels. "You have to get them assessed now, too, where before you were giving your best guess on the value," she said.

"And they have to file this within 90 days of getting probate, so there are a lot of things that executors are going to be scrambling to find out."

On its official website, the province suggests executors contact professional appraisers to make sure the valuations are accurate.

What's more, those records and evaluations can be audited any time within four years of filing the return. If a mistake has been made, the executor is liable.

"It is a level of diligence that was probably always required under the act," said Paul Taylor, a lawyer in Borden Ladner Gervais LLP's Family Wealth Counsel group, "but probably wasn't done because it wasn't enforced as strictly before. Now we are going to see audits. We are going to see penalties.

"As advisers, one of the things we are still grappling with," he added, "is what do you tell clients when they are filling in the information return and say, 'Well what kind of information do I need here? Are a couple of assessments from realtors enough?' Probably not, based on what I have heard from the Ministry."

Mr. Taylor was one of the members of the Society of Trust and Estate Practitioners consulted on the draft legislation by the province in 2014. One issue that still concerns him, he said, has to do with the length of time executors may want to set some of the estate's funds in reserve in case auditors disagree with their assessments. "It is going to be hard to convince the beneficiaries that you should be keeping a holdback for a number of years in order to cover yourself," he said.

So if being an executor is becoming increasingly onerous – and risky – how can people who are planning their estate or making a will choose the right one? Estate planning experts make several points to keep in mind.

"First of all," said Mr. Gray, "you need to find somebody who you feel has the skill, the time, and the temperament to look after very complex matters for up to a year. Put some thought into it.

"Secondly, you need to have somebody who is local, because it's very challenging and difficult for somebody who is geographically distant to look after your personal affairs."

When you have identified the right candidate, say experts, don't make it a surprise. "The first thing that you do is ask them whether or not they are agreeable to take on the job," said Mr. Coates, "because not everybody is going to be. Even if a person is named as an estate trustee, they are not required to take it on. They can renounce. That is why you should always name at least one alternate in your will."

It can also help to name compatible joint executors to share the responsibility and the workload.

Ms. Bezaire also advises taking "a good hard look at what you have. Do you really have to hold on to everything until you die, or could you do some gifting while you are alive? Now is the time to look at getting it out of your estate as it is getting more complex."

And for every account and policy that lets you choose a beneficiary, make sure you have someone named – and that it is up to date.

In the end, planning is key. Get good advice from a qualified professional, experts say, when devising your will. Then consider offering the same kind of help to its executor.

"You should make it very clear that you recommend that they have the assistance of a tax lawyer and an estate lawyer," said Mr. Gray.

"Have it say right there that the executors are requested to fully utilize any independent professional assistance as required for them to facilitate their duties. By spelling it out, you are not only giving direction, but also authority for them to be able to do that, and for those costs to come out of the estate."

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