An important consideration in drafting a will is the appointment of an executor.
The executor will become your voice after death and ensure your wishes are realized. It is a position of trust and the choice should not be made lightly.
An executor must to be trustworthy, patient, reliable and sympathetic. He will also need to be impartial and should be able to work with numbers and complete administrative details.
The executor must also have the time to settle an estate. Some tasks can be complicated and time consuming and may require dealing with professional advisers.
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It is a good idea to choose someone who is younger and more likely to survive you. It is also acceptable to appoint two or more people to share responsibilities.
Co-executors should be able to work together to speed the process.
Executor’s duties
- Obtain the death certificate and make funeral arrangements.
- Locate the most current copy of the will.
- Review the will and seek legal advice if required.
- Apply for probate or court
approval of authority as executor
to act on behalf of the estate.
- Let beneficiaries know they were included in the will.
- Keep them informed of progress on distributing the proceeds of the estate.
- Notify business associates and all relevant organizations.
- Stop all preauthorized payments.
- Open an estate bank account, so expenses of the estate can be easily accounted for.
- Cancel Old Age Security payments, if applicable.
- Apply for life insurance and Canada Pension Plan death benefits, if applicable.
- Create a complete list of all assets owned by the deceased.
- Locate each asset and value, secure and insure it, if applicable.
- Manage the assets until they are disbursed, as specified in the will.
- Keep detailed records of any purchases or sales made on the estate’s behalf.
Final steps
- Pay all estate debts including taxes and funeral bills before distributing assets.
- Consult a tax adviser to determine how to minimize the tax
burden on the estate.
- File any outstanding tax returns as well as the tax return for the year of death.
- File an estate tax return every year there are assets in the estate.
- If assets are left in trust for a beneficiary, the executor must manage the assets for the duration that the trust exists.
- To ensure taxes from the estate can be paid, distribute assets to beneficiaries after the final return is filed and a tax clearance certificate is issued. Let beneficiaries know which items they receive from the estate
are taxable.
* The executor can be personally
- The executor can be personally
liable for any outstanding expenses found after the assets are disbursed.
While the family often makes the arrangements, let your executor know:
- The kind of service you would like and the specifics of any expenses that have been prepaid.
- Tell your executor where you keep your will and documents. Do not keep your will in a safety deposit box because it will be more difficult to access. Your lawyer may be willing to store it free of charge.
- Make it easy to locate your
beneficiaries. Keep current contact information for each individual
with your will.
- Maintain an up-to-date contact list of all organizations you deal with including financial institutions (banks, credit card companies, investment companies), government agencies, any clubs you belong to, charities supported and service
providers.
- Keep copies of life insurance policies and Canada Pension Plan records with your will.
- Keep good records of all your assets and their location including bank accounts and registered plan balances, pension amounts outstanding, value of investments, property and other valuables.
- Specify in your will which assets should be sold to cover outstanding debts and expenses.
- File your tax returns yearly, so the executor only needs to be concerned with the final return and any subsequent estate returns.
- Leave specific instructions in your will for the administration of long-term trusts.
- Make sure your will reflects your current wishes and meets current government legislation.
Before finalizing your decision, speak to the individual(s) you would like to appoint as executor. Explain what the duties entail, as summarized above, and ensure they are willing and able to take on the role. If you want to compensate your executor, specify an amount in the will.
Communicate preferences with the executor, maintain up-to-date and readily accessible records pertaining to your will and estate, and pursue tax planning advice during the will preparation to make the executor’s job easier during difficult times.
Marianne Gray is a chartered accountant and associate partner in KPMG’s agri-business industry practice in Lethbridge. Her opinions do not necessarily reflect the views of The Western Producer. She can be reached at 403-380-5742 or by e-mail at mariannegray@kpmg.ca
