So you’ve been named an executor – what next?
If you’ve never acted as an executor before (which most people haven’t!) you might be wondering what that means for you. In this article we’ll discuss everything you need to know about being an executor of a will in Canada.
Plus, we have a checklist to help make it easier for you to tackle your responsibilities as an executor in the future.
First things first..
What Is An Executor?
An executor of an estate is a person appointed in a will by the testator (the person who created the will) to act in charge of their estate after they pass away.
Most often an executor is an individual, a trusted family member or friend of the person who created the will. However, some people will appoint corporate or professional executors as well.
The name of this role may change depending on the province. For example, in Ontario this role is an ‘Estate Trustee’ and in Quebec, it’s called a ‘Liquidator’.
What Does An Executor Of A Will Do?
An executor helps carry out the wishes outlined in a will. They are responsible for communicating with your beneficiaries (or heirs) to manage the settlement of your estate, following the direction laid out in your will.
This can include anything from distributing assets, collecting debt, paying bills, and handling your funeral or burial wishes. It is a very important role and there are a lot of things an executor will need to do.
Why Would Someone Name Me As An Executor In Their Will?
An executor is one of the most important roles after someone passes away. While there are many responsibilities involved, it’s also a sign that the person trusts you and your judgement. They are relying on you to make critical decisions on their behalf after they're gone.
If you’ve been named an executor of someone’s estate, it’s usually helpful to speak with them to ensure you understand their wishes . As well, make sure to ask them where you can find a copy of their will when the time comes. In most of Canada, only the physical will is valid, so you’ll need to know where the original printed and signed copy is.
If you’ve unexpectedly come into the role and are unable to locate the original, you can consider searching the Canada Will Registry to see if they’ve registered the will.
What Are The Duties And Responsibilities Of An Executor Of A Will?
An executor of a will is an extremely important role and carries many responsibilities. Some responsibilities and duties of an executor include:
- Organizing funeral and burial wishes
- Paying off estate debts
- Advertising for creditors (to collect any debt that’s owed)
- Distributing assets to beneficiaries
- Selling property and/or businesses (if necessary)
- Filing final tax returns
- Communicating with heirs and beneficiaries
If you have a personal relationship with the testator, this can be an overwhelming process. To help, we’ve partnered with the estate settlement experts at Cadence to put together this checklist for executors.
Do I Have To Accept The Role Of Executor?
No – even if you are named an executor in a will, you are not required to serve in the role. Being an executor can be time-consuming and can come with personal risk. If you are unwilling or unable to accept the responsibility, you can always choose not to accept. This applies even if you are unexpectedly named the executor of an estate and you do not find out until the testator has passed.
This is why many wills include backup executors, just in case! If there is no executor appointed, the courts will choose one for the estate.
However, if someone lets you know that they would like to name you as their executor, it’s important to let them know if you are uncomfortable with the role sooner rather than later. This way they can choose another person and update their documents accordingly.
Does The Executor Of A Will Get Paid?
Being an executor is a large responsibility. In Canada, executors are entitled to claim compensation for their work. Each province has their own formula that helps determine the compensation an executor is allowed to receive from the estate.
Because these guidelines exist already, this is often not something that is specifically outlined in a will. Wills made with Willful do not outline executor compensation but a will made with a lawyer might.
Is A Trustee The Same As An Executor?
An executor and an estate trustee are two different roles, but they can be the same person. (For example, with a Willful will, one person fills both roles). The difference is that executors only take care of the entire estate administration process. Once that is completed (typically 12-18 months), there are no further responsibilities.
A trustee may act in a role for a longer period of time. For example, with Willful the testator may have a testamentary trust for minor children. These trusts hold assets for minor children until the child reaches the age stipulated in the will (often 18, 21, or 25). The trustee would manage that trust by filing tax returns and releasing funds for the child’s guardian. As such, this role can take longer to completely fulfill.
Can An Executor Live In A Different Province/Country Than The Person Who Created The Will?
Each province has its own rules around executors from outside the province to post bond. This is also known as a probate bond or a fiduciary bond. These estate bonds are to help protect the beneficiaries and the deceased testator and make sure their wishes are carried out correctly.
If you have been named an executor to a will in a different jurisdiction than that you currently live, consider speaking with the testator to make sure that both of you are familiar with the implications so there are no surprises in the future.
Are There Any Personal Risks When Acting As An Executor?
An executor plays an important role in ensuring that the wishes of the testator are carried out. That being said, being an executor can carry considerable personal risk.
There are up to 18 areas with supporting case law where an executor can be sued personally. For example, in Ontario, executors can be fined up to 3% of an entire estate and if they’re found to have benefitted from making a mistake (ie. if they are also a beneficiary), and can even be put in jail for up to two years.
If you decide the risks are too great for your own comfort, you can always decline the role. However, if you are still willing to take on this incredibly crucial role, you can also get executor liability insurance – something that a lot of people don’t know exists! Make sure to apply early so you don’t get turned down.
Please note that Willful is not a law firm and cannot provide legal advice. All information in our Learn Centre is general and public information can also be researched through your provincial Attorney General website.