The work of an executor can be arduous and time-consuming, but it can also be gratifying.
Someday you may be asked to be an executor (or, depending on your province, estate trustee or liquidator). It’s a great honour — the person who has asked you believes you’re capable and trustworthy and feels the two of you are close. But it’s not a decision to take lightly.
Before providing an answer, be aware of an executor’s duties. It’s a big role that may require a lot of time and effort.
As executor, your job is to distribute the person’s assets according to his or her will. But reaching that stage involves many tasks, including any or all of the following:
- Working with a lawyer to obtain probate of the will.
- Identifying all assets and determining their value.
- Notifying creditors and paying any outstanding debts.
- Liquidating certain assets.
- Filing any life insurance claims.
- Filing a final income tax return and annual returns for the estate.
- Updating beneficiaries on your progress. And those are only some of the key tasks.
Can you spare the time?
In addition to the multiple tasks involved, you’ll want to consider the time it would take to complete all those tasks. The more complex the estate, the more time it takes to settle.
If you’re dealing mainly with a principal residence and conventional investments, it’s pretty straightforward. But it’s more complex if you’re dealing with, let’s say, rental income property, a family trust, and vacation property. The degree of complexity can spell the difference between settling an estate in a matter of months and taking a year, two years, or more.
The location of the property and the beneficiaries may also pose a challenge. You may need to spend time and money travelling in order to carry out certain duties in person.
A question of fees
As executor, you’re entitled to financial compensation, typically 5% of the value of the estate. Friends or relatives, however, will often waive the fee out of kindness or in light of the bequest they’ll receive. There’s also the option of engaging a professional to assist you. While the professional fees will come out of the estate, it can be well worth it in terms of time savings and accuracy.
The work of an executor can be arduous and time-consuming, but it can also be gratifying. If you decide to accept the role, you may want to arrange a meeting down the road to go over the will, obtain a list of contacts (lawyer, accountant, beneficiaries), and ascertain the location of key documents (banking records, life insurance policies, income tax returns, and so on).
If you decide not to accept the role, it’s beneficial if you convey your reasons. Your explanation may help the person in choosing someone else.