{"id":3352,"date":"2017-09-09T19:00:00","date_gmt":"2017-09-10T00:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/youve-been-made-an-executor-what-you-need-to-know\/"},"modified":"2024-10-22T11:20:40","modified_gmt":"2024-10-22T15:20:40","slug":"youve-been-made-an-executor-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/youve-been-made-an-executor-what-you-need-to-know","title":{"rendered":"What is an executor? Things you need to know"},"content":{"rendered":"\n

When a friend or family member asks you to be an executor of their estate<\/a>, it’s important to remember it’s a role that comes with a lot of responsibility\u2014<\/span>and some risks.<\/p>\n\n\n\n

An executor<\/a>\u2014<\/span>known as a liquidator in Qu\u00e9bec\u2014<\/span>administers a person’s estate after they’ve passed away, based on wishes outlined in their Will and in accordance with all applicable laws. An executor can be a friend or family member, a trust company, lawyer or accountant, or some combination of the above.<\/p>\n\n\n\n

If you’ve been named an executor<\/a>\u2014and aren’t in the <\/span>business of estate administration<\/span>\u2014you should be aware of the work involved, which can be both complex and time consuming.<\/p>\n\n\n\n

\u201cIt’s an honour to be named, but it can also be a burden for some,” says <\/span>Leanne Kaufman<\/a>, president and CEO of RBC Royal Trust<\/a>.<\/p>\n\n\n\n

Before naming an executor, it is always best practice to speak with that person before appointing them. Not only may they not have the time it takes to administer an estate, but they may not want the potential liability associated with being an executor, says Bianca Krueger, senior manager, Professional Development at RBC Royal Trust.<\/p>\n\n\n\n

\u201cAs an executor is a fiduciary, even if they hire accountants, lawyers and other professionals to assist, they must retain oversight, and can be found personally liable for loss due to errors or omissions,\u201d says Krueger.<\/p>\n\n\n\n

Below is some advice from Kaufman and Krueger on what to expect if you’ve been named an executor\u2014and where you can turn to for help.<\/p>\n\n\n\n

How the job starts<\/h2>\n\n\n\n

The first step is to locate a copy of the deceased’s most recent Will. Executors should be kept informed of where to find a copy, so they aren’t left scrambling to locate it when the person passes away.<\/p>\n\n\n\n

\u201cAnd if it’s locked away somewhere, or in a safety deposit box, make sure you have access to it,” says Kaufman, noting that trust companies and other professionals generally hold  these documents in safekeeping.<\/p>\n\n\n\n

Once the Will is located, you\u2019ll likely be required to obtain \u201c<\/span>probate\u201d\u2014the formal process of confirming the Will and confirming the authority of the executor(s). However, the probate process is not applicable in Qu\u00e9bec.<\/p>\n\n\n\n

\u201cMost financial and other institutions won’t deal with you until you have a probated Will and that takes some time, so the process needs to start as quickly as possible,” Kaufman says.<\/p>\n\n\n\n

The executor also usually helps to arrange the funeral and ensure the family’s immediate financial needs are met, especially if there are dependent children.<\/p>\n\n\n\n

Valuing and safeguarding estate assets<\/h2>\n\n\n\n

The executor’s role also includes valuing assets, which needs to happen as soon as possible, since that number determines how much has to be paid in probate fees.<\/p>\n\n\n\n

Kaufman says this process often starts with reviewing the most recent bank and investment statements, and taking into consideration assets as well as debt. There may also be other assets to consider such as art and antiques, private company shares, intellectual property and crypto currency.<\/p>\n\n\n\n

\u201cYou need to identify all of the assets, which can involve a little sleuthing, especially in the digital age,” says Kaufman. \u201cDepending on the nature of the assets, you may have to reach out to third-party professionals to help value them.”<\/p>\n\n\n\n

Executors should also keep records of those valuations, just in case applicable authorities such as CRA and\/or beneficiaries request some evidence.<\/p>\n\n\n\n

An executor’s role also includes safeguarding the deceased’s assets, which can include everything from making sure property bills and insurance are being paid on time, to ensuring a farmer’s livestock is being fed.<\/p>\n\n\n\n

Executors should act quickly to cancel all credit cards owned by the deceased and notify banks where they held accounts to have them closed. \u201cUnfortunately, it’s not uncommon for fraudsters to take advantage of the obituaries,” says Kaufman.<\/p>\n\n\n\n

Executors also need to apply for and collect the Canada Pension Plan (CPP) or Qu\u00e9bec Pension Plan (QPP) death benefit, or survivor\u2019s benefit, as well as apply for and collect life and other insurance benefits.<\/p>\n\n\n\n

Tracking down and talking to beneficiaries<\/h2>\n\n\n\n

Another job for the executor is identifying all of the beneficiaries, which can be complicated in today’s highly mobile society where there are often multiple marriages and even estranged children. Where a Will names a class of individuals, such as “my grandchildren,” the executor has to make sure everyone in that category is included.<\/p>\n\n\n\n

\u201cEach province and territory has its own rules, but certainly across Canada all executors are expected to make reasonable efforts to find all beneficiaries, which is not always an easy task. Sometimes an executor must retain an investigator to assist in locating individuals,\u201d says Krueger.<\/p>\n\n\n\n

A prudent executor will communicate regularly with beneficiaries, keeping them updated on the status of the estate and eventual distribution of assets.<\/p>\n\n\n\n

“Failure of an executor to communicate is probably the No. 1 complaint they might get,” says Kaufman. \u201cIn an estate context, no news is always perceived as bad news. If the beneficiaries don’t hear from you, they may think something fishy is going on. For instance, it may take 24 months before the assets can be administered, but beneficiaries don’t know that, which is why regular communication is important.”<\/p>\n\n\n\n

Administering the estate<\/h2>\n\n\n\n

Administering the estate\u2014which includes everything from determining all assets and liabilities of the deceased, to preparing and filing final income tax returns and ultimately distributing assets to the beneficiaries and\/or establishing testamentary trusts\u2014can be a challenging and time-consuming responsibility. <\/p>\n\n\n\n

Some of the many tasks the executor needs to handle include:<\/p>\n\n\n\n