When you pass away, the person or people you name as the executor in your will, will, among other things, be responsible for making funeral arrangements, collecting all of the assets of your estate, paying all of your debts, and then finally dividing what remains of your estate among the beneficiaries named in your will. It is an extremely important role and one that should be considered carefully before any appointment is made.
While you may think that you know the perfect person for the job, some factors which you may want to consider before making the appointment include:
- Is the person you want to name as your executor a BC resident? From a practical point of view, an executor who does not reside in BC may have more challenges administrating the estate from another province or country. Similarly, if there are any trusts created under your will, for which your executor is also the trustee, the trust may end up being domiciled outside of BC, which can result in negative tax implications for the trust. Therefore, in order to avoid such problems, you should seek professional advice before appointing an executor.
- Do the assets of your estate or the nature of one or more of your trusts require an executor with special qualities or abilities such as impartiality, business acumen, longevity, local residency or investment experience? If your estate sets out one or more trusts which may continue in place for several years, you will need to ensure that you either have appointed an alternate executor and trustee, or that the person that you have appointed will outlive you and will be alive and capable of administering the trust for the required time frame after you have passed away. In many cases this might mean appointing a business trustee. When making such appointments, it is important to keep in mind that even if you name someone who is younger than yourself, such as your child, there is always a possibility that they may predecease you, thus being unable to administer your estate. As such, thinking through these issues in advance, updating your will when a major life event occurs and/or appointing alternate executors to manage your estate can be an important part of the planning process.
- Is the person or people you wish to appoint as your executor willing to act as your executor? If so, will they be charging a fee? Administrating an estate can be a time consuming and onerous process. Therefore, not everyone will be willing to act as your executor and those who agree may wish to be compensated. To limit the possibility of your executor declining to act, it is best to discuss the role with your potential executor in advance and to obtain their consent prior to appointing them as your executor.
- Do you want the person or people you appoint as your executor to be able to appoint a replacement executor if one or more your executors passes away or is unable or unwilling to act? If so, do you trust their discretion or do you wish to guide their decision making process. You may be able to leave a list of executors from whom the existing executors can select a replacement.
The factors to consider when appointing an executor for your will vary from case to case. The above list is not exhaustive and should not be taken as legal advice. To learn more, book a free 20 minute telephone consultation with Laila Ali.