WHEN NOT TO BE AN EXECUTOR
Many people feel honoured when they are asked to be the Executor for a friend or family member’s estate. When someone asks you to be their Executor it feels terrific; they are indicating that they believe you to be trustworthy and have good judgement. For many of us, this gives us a great feeling of pride, and we want to fulfil our duties to the best of our abilities. Sadly, many people discover that it is much more difficult than they realized. In my experience, many Executors find they do not have the time, or the skill set to perform the duties or worse, and they attempt to deal with the estate and run into problems and often, legal issues.
The job of being an Executor comes at the worst possible time. You are exhausted, in the process of grieving the loss of a loved one and while you are not in the right mental spot you still must deal with some complex and sometimes sensitive issues. Add in family dynamics, poor communication and challenging personalities, and often Executors find themselves heading down a road of family heartache and things that destroy lifelong friendships. So, let's break things down a bit and give you the nitty-gritty of what it is like to be an Executor.
First off being an Executor will likely be one of the most stressful experiences that you ever have to face. Squabbling family members, multiple beneficiaries, assets outside the province, trust for minors or disabled children, taxes to be filed, second marriages, digital legacies, and complicated finances – Oh the fun!
There is a lot of work to do and being an Executor is a tedious job that is just getting tougher with the amounts of money that most estates are dealing with these days. Let’s get one thing out of the way – Don’t Try This at Home! Okay, its time to call in the big guns. Those big guns are the professionals such as a bookkeeper, an accountant, a professional real estate appraiser and it lots of situations, an estate lawyer. These professionals can help you as the Executor ensure the estate is correctly and efficiently wound-up.
Don’t think you need the help? Did we mention that as the Executor you are personally liable for the decisions you make? What does that mean? If the beneficiaries decide that you have not sold assets for their proper market value, they can go after you to personally pay them the difference.
Unfortunately, we see it time and time again. People you would never think would argue over money are arguing over what is a small amount of money. In most cases, its not about the money. Its those family dynamics working their way into the process and suddenly people are fighting because they feel in some way that they have been slighted.
When you hire professionals, they will help you avoid problems…period.
Did you know you do not have to accept the role of Executor? There are many situations where I advise clients not to accept the job. Here is a checklist you should review before you agree to be someone’s Executor:
Do you have the time?
In most cases, the Executor is given one year to wind up the estate. That means you will have to sell the property, deal with banks, distribute personal assets, meet with accountants and lawyers and have most of the work completed by the one-year mark. If you are planning to head south for the Winter, this could adversely impact your trip. As well, if you are already busy with ageing parents or your children and their busy schedules, do you have time to take on this job? How will your employer feel about you at the last minute, having to take time off to deal with the estate? When in doubt don’t accept the position.
Do you have the necessary skills?
Ok honestly, do you like to keep detailed records or are you a person who never looks at their bank statements. If you’re the later forget being an Executor.
Are you a good communicator and can you deal with conflict?
An Executor needs to be able to regularly communicate with beneficiaries, providing them with a detailed update of the duties they performed. You also must be able to act as a mediator for any conflicts that occur between beneficiaries. Hate conflict? Do not accept the role of Executor.
Do you know where the deceased’s property is?
If you have no idea where the deceased banked or had their property, then get ready for a real-life scavenger hunt. It will be a hunt that has no list to guide you and will potentially involve finding property all over the city, province or maybe even the world. Excited yet?
Does the deceased have more debts than assets?
An estate where someone owes more then they have in property is one of the most challenging estates to complete. While you are not personally liable for the debts, you will have to talk to the creditors who will call you again, and again….and again. Want to provide a nice big funeral for the deceased? You will have problems with creditors wanting to know why you chose an expensive funeral when the testator had massive unpaid debts.
Is the family complex?
If the deceased was in a second marriage and you expect fighting think long and hard about accepting the appointment to be the executor.
Does the deceased have minor or disabled children?
There are many things to consider. As Executor, do you want to take on handling the trusts that will need to be set up for these children for the next several decades? Someone must ensure the minors trusts are managed properly until the child turns 18. Disabled children mean that you will be dealing with the Public Trustee, AISH and the disabled child inheritance for potentially decades for little or no pay.
Is there a business or farm you will have to manage?
If the deceased died leaving a family business or maybe a farm, and you have never operated a farm, or business now isn’t the time to try. Remember you will be personally liable for any errors or decisions you make, and you must be accountable to the beneficiaries.
Did you like and trust the deceased person?
It sounds harsh, but if you didn’t get along or even like the person when they were alive, you wouldn’t start caring for them when they are no longer here.
If you have questions about whether to act as an Executor for an estate give our office a call and ask for my Executor’s Duties Handbook. This 87-page handbook will walk you through, step-by-step on the things you need to do to be a successful Executor. And as always, please feel free to call us. We are here to help.
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