Updated: Jun 28, 2022
While many approach taking on the role of an executor as an honour and privilege, the duties and responsibilities of an executor can be complicated and, at times, overwhelming.
There’s much more to being an executor than simply finding a copy of the will and handing out assets from the estate. Depending on the estate, an executor may spend up to a year or more tying up loose ends and making sure everything is properly taken care of.
💡 Further reading: 11 Estate Planning Myths That Hold You Back
Before choosing an executor, you need to understand everything involved with the role so that you can reassure yourself and your family that your estate will be left in good hands. Furthermore, if you’ve been asked to take on the role of an executor, perhaps by a close friend or family member, it is important to know what you’re getting into before you accept.
This article takes a comprehensive (but not exhaustive) look at a number of responsibilities an executor takes on while carrying out their role.
Learn About the Duties and Responsibilities of an Executor
Before asking someone/ agreeing to become an executor, it makes sense to become familiar with everything that the role entails.
An executor is someone named in a will to manage the closing of the deceased person’s estate and allocating any remaining assets as per the will. As you may have guessed, this is rarely a quick and easy process. Typically, the role lasts 12 months or more from start to finish, but this can vary depending on the size of the estate and complexity of the family involved.
This article is a great place to learn more about what’s expected of an executor, however it’s important to know that each estate is different. If you have specific questions about being an executor, reach out to our office, Ken and Pauline are both Certified Executor Advisors and will be more than happy to help.
Contact the Will maker, if possible
Before you agree to become an executor, we strongly recommend that you feel comfortable in your abilities prior to accepting. The more you can learn about the estate from the person who owns it, while they’re still alive, the better.
If a will maker asks you to be their executor, arrange to meet with them as soon as possible. Topic to discuss with them include:
The location of the most current copy of their will
All financial assets, alongside other important details like account numbers and passwords
Non-financial assets, such as jewelry and other family heirlooms and the stories behind them
Any professionals that the will maker does business with as well as their contact information
Funeral plans, powers of attorney, and wishes respecting organ donation
As an executor, it will be your responsibility to keep accurate records, make many decisions, and monitor all estate activity. Even if you get help from others, at the end of the day, you are legally responsible for the estate. If you don’t do the job properly, you could be personally liable.
If you decide that you are unable or not wanting the position, speak with an estate lawyer before acting on any executor responsibilities. Once you start dealing with estate assets, you will be legally bound to continue.
Create a thorough system for record-keeping
As we dig deeper into the duties and responsibilities of an executor, you can already see that there is a lot to keep organized. It’s crucial that you take notes and keep accurate and complete records of everything you do including any financial concerns based on the estate and various expenses that come up as a part of serving as an executor. Depending on the will, you may also wish to record the amount of time you spend working on the estate.
Beneficiaries are allowed to request copies of any invoices, cheques, and other accounting materials. If they feel bothered by how an executor is handling the estate’s finances, they may ask for the accounts to be reviewed by the Court. If an executor is unable to account for all assets, receipts, and disbursements, they may be personally liable for any losses or assets not accurately accounted for on behalf of the estate.
Locate the Will
When someone passes away and you know you’re their executor, one of the first things you need to do is find the most current version of their will as well as any trust documents. You will also need to track down any additional paperwork that concerns the estate.
If, for some reason, you’re only able to find a copy of the will (not the original) as the executor it is your responsibility to get in touch with the lawyer who drafted the will so that they can determine if your copy of the will is current and valid or give you a copy that is.
Here in BC, executors are also required to search the Wills Registry via Vital Statistics. From your search, you will receive the Will Search Certificate that will specify if a Will Notice was ever filed by the will maker. If they did file a will notice, it will confirm the date and location of the original will.
Hire qualified professionals to support you
If you choose to be the executor of an estate, it’s likely that you and the will maker were close. It is to be expected that you may still be mourning your loss when it comes time to take on the duties and responsibilities of an executor.
You’ll be working through a number of complex procedures from selling real estate and valuing assets to maneuvering through estate taxes and legal filings. Emotions and legalities do not mix, which is why we suggest finding a team to support you through the process.
At the beginning, it may be easy to believe that you can carry this duty all on your own. If you take action in good faith, without ensuring that you are complying with current laws, it may be too late by time you become aware of the alarming legal consequences.
As Certified Executor Advisors, we can offer a helping hand to support, direct, and advise you through the entire process. Here at Thom & Associates, we have the skills and experience to guide executors through the complete process as efficiently as possible. You will not be billed for meeting with us and we can help ease the heavy burden while giving you the time and energy to deal with all of your other obligations.
Funeral and burial arrangements
Even though the details of a funeral are usually made by family members, the family may refer to the executor during the process of funeral planning.
As an executor, you have the legal authority to make decisions. Keep in mind that all expenditures coming out of the estate will affect the amount that will be distributed to the beneficiaries. When preparing funeral and burial arrangements, unless it’s stated outright in the will, an executor must act in the best interest of the estate while ensuring that the costs are reasonable and relevant.
The course of action for planning a funeral involves a number of steps which include selecting a funeral home and determining the details for burial/ cremation and memorial services. Understandably, taking care of these details may be overwhelming for those closest to the recently deceased, so it’s best to be prepared for them to depend on you to help make these arrangements.
Take note, ahead of time, there may be various types of insurance available for you or your executor to cover these types of final expenses when the time comes. Contact us to learn more.
Depending on which province you’re in, as an executor, you may be legally required to mail all beneficiaries mentioned in the will a copy of the will as well as a notice of your intention to probate the will.
Specifically, in British Columbia, if the deceased died without a will, this information must also be sent to anyone who would be entitled to a share of the estate, even if they were not clearly named as beneficiaries (ie: children and close relatives).
Take note that if any of the beneficiaries are minors or mentally incapable, additional notification requirements and care will apply.
Determine value of assets
As an executor, it is your responsibility to prepare a complete list of all assets included in the estate as of the date of death. Each item you list will also require a monetary value.
The estate assets list will need to include:
Personal effects including jewelry, furniture, art, various furnishings, automobiles, and recreational vehicles;
Contents of all safe deposit boxes held under the name of the deceased;
All digital assets owned by the deceased;
Payouts from any life insurance policies;
Any outstanding amounts owed to the deceased from their employer, which includes salary, holiday pay, and group benefit amounts;
Any money left in RRSPs, TFSAs, and RRIFs;
All property owned by the deceased, including any outstanding mortgages;
All other assets owned by the deceased; and
Any debts owed to the deceased.
The sooner you can get a full understanding of the estate finances, the better, so that you can take the next steps in settling the estate. This is where your thorough system for record-keeping will come in handy.
Depending on the complexity of the estate, this can be as simple as creating a spreadsheet to fill in as you go or using a specialized accounting program. Before you can begin settling the estate, you must prepare a statement of all financial transactions involving the estate from the date of death. You are required to make this statement as itemized and detailed as possible as a copy will be sent to each beneficiary.
Determine and pay debts of the estate
Using funds within the estate, an executor is responsible for paying bills and debts owed by the deceased. This involves reviewing their papers and records (including electronic records), and by inquiring with third parties as required.
Debts against the estate may include:
Funeral and burial expenses
Credit card debt or lines of credit;
Outstanding expenses involving property and other assets; and
Debt which allows the lender to use the asset to repay previously advanced funds (i.e. a mortgage)
While doing this, if you come across a bill or debt and are unsure about it’s legitimacy, do not hesitate to consult with the appropriate professionals. Scams have a way of sniffing out money and preying on people when they’re at their most vulnerable.
In addition to closing any debts against the estate, it is also the responsibility of the executor to ensure that income and estate tax returns are filed in a timely manner.
Filing the appropriate tax returns on behalf of the deceased and the estate can be a complicated process for some executors. Depending on circumstances and complexity of the estate, post mortem tax planning may be a smart choice.
Once the returns are assessed by the Canadian Revenue Agency (CRA), then you can apply for tax clearance certificate(s). Obtaining these certificates prior to distributing the assets of the estate can save you from being personally liable for any unpaid taxes, interest, and penalties owed by the estate.
If the deceased happened to own assets outside of Canada, you may be required to prepare and file tax returns according to whichever country these assets are located in. In these situations, it’s best to consult a tax lawyer or accountant who has experience in estate administration and related tax issues.
Unless stated otherwise in the will, an executor is permitted to claim a fee for their time and effort that went into settling the estate. Generally, this fee is calculated using a set out formula.
As an example, in British Columbia, the maximum fee an executor can receive is 5% of the gross aggregate value, capital, and income of the estate.
Also in BC, an executor may claim an annual care and management fee for the investment of estate assets up to a maximum of 0.4% of the annual average market value of those assets.
Typically, when determining the actual amounts that will be paid out, the Court will consider the following:
The duties and responsibilities involved;
The overall value of the estate;
How much time the executor put into completing their duties;
The competency and resourcefulness demonstrated by the executor; and
How successfully the executor managed the estate.
In situations with more than one executor, the fees paid must be shared.
💡 Further reading: 11 Estate Planning Myths That Hold You Back
Duties and Responsibilities of an Executor
It’s clear to see that estate administration is not a walk in the park. Much more than simply allocating assets and filing taxes, not all executors are cut out for the job. Which is why, for the sake of your family and the legacy of the estate, it is vital to vet whoever it is that you’re considering to be your future executor. On the other hand, if someone is asking you to become their executor, it’s just as important to know what you may be getting yourself into.
As we like to say here at Thom & Associates, being an executor is the hardest job you never applied for. While you may want to support your loved-one or close family friend, without the proper help, you may find yourself in legal hot water or in crisis while dealing with surprise debts or unhappy beneficiaries.
If you would like to further discuss the duties of an executor or any other aspect of estate planning and management, our Certified Executor Advisors do not charge you for meeting with them and are here to help. Book an appointment today!