Gails Blog

Every where I go I talk about the importance of making a Will. Yet, even among the financially savvy, a Will is one of the last things people seem to get around to making. It may be a general unwillingness to face life’s darker side. Or it may be that there are things people just can’t seem to decide on, so they procrastinate.

In order to make a Will, one of the first things you must do is choose your executor, and for many people this is a stumbling block. Horror stories about about estates that were mismanaged, beneficiaries who almost came to blows, and the “waste” of having a professional do the job.

So what exactly are the responsibilities of an executor? Most people have no idea how big a job it can be. Yes, a simple estate will wrap-up smoothly; a more complex one can drive you to drink. Your executor will have to complete a number of tasks including gathering and protecting your assets, forecasting your family’s cash needs, handling tax requirements and distributing your estate.

You can name someone to act alone (a sole executor), with others, (a co-executor) or as a backup if the first appointed executor is unable to act (a contingent or alternate appointment). Whomever you name, make sure you get their agreement since that person has the right to turn down the job. While it’s often positioned as an honour, it’s more like a pain in the butt and only someone who is truly fond of you, or someone being well paid, will take the job.

Some people choose to name friends or family members as executors because these people are more familiar with the personal details of their lives. While a spouse or child might seem a natural as executor, having to do the job alone can add more stress to an emotionally stressful period. Executorship can be a time-consuming task. Without financial or investment knowledge, your partner, child or dearest friend could be out of his or her depth. And if your executor is too emotionally involved, that can muck up the process.

So who should you consider? First of all, you have to choose someone of sound mind. To act, the person must have attained the age of majority, so your minor children won’t be able to act until they’ve reached adulthood. Here are some of the most obvious choices.

Your life partner: This can be a good choice if your assets are relatively uncomplicated. An estate made up of bank accounts, term deposits, a house, an RRSP and pension benefits wouldn’t be difficult to administer if it was going outright to a surviving spouse. If the assets are complex, or if there are testamentary trusts involved, then a co-executor with knowledge and expertise in the areas of investments, income tax, trust matters and accounting might be a good idea.

One or more of your children: Mature adult children will likely be familiar with your assets and the ways in which those assets have been managed and can keep costs down. However, unless they have had specific training in a profession such as law or accounting, children may lack the expertise to complete the administration of a complex estate.

Friends and Business Associates: Same-age peers may find themselves acting as executor at a time when they themselves need help in managing their affairs. Choose an older executor and she may die before you. Or he may die during the administration period at which point his executor — someone you may not even know — will have to take on the administration of your estate.

Family Lawyer/Accountants: A logical choice, right? Maybe not. Unless your family lawyer is set up to do estate administration, he may not be equipped. It’s kind of like going to a dentist to have your baby delivered. Lawyers should be considered only if they have a sound knowledge of estate law.

Corporate executors: Trust company employees are experienced, neutral and available 52 weeks of the year so your estate administration won’t be delayed because of illness, vacation, or business commitments. Professionals also tend to have a wealth of experience having handled thousands of estates. And a corporate executor has the facilities to handle the paperwork, tax returns, valuations and so forth, which often can be a mystery to the uninitiated. Of course, you’ll pay… and it could be a lot.

Choosing  your executor is just one step in making  Will. If you have minor children, you will also want to choose a guardian. No matter who you choose for these jobs, the job of actually drawing up the Will should go to someone who is an expert in estate planning. Resist the urge to do it for $29.99. You may feel you’ve covered your bases, you may have inadvertently left a mess that will cost a fortune to untangle. 

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