Choosing the Right Executor: 6 Factors
Who should I appoint as the Executor (known in Alberta as a Personal Representative) of my Estate? It’s one of the fundamental considerations of Estate Planning, yet it’s not always an easy decision to make. Oftentimes, the decision is straightforward—for example, married couples typically appoint one another as their Executor. Similarly, an unmarried person may appoint their only sibling or a parent as their Executor. In any case, there are certain considerations to make when choosing an Executor of your Estate.
Sometimes, however, choosing an Executor can be a daunting task. You may not have close family members who are willing and able to act, or, even if you do, they may live halfway around the world, making the logistics of appointing them prohibitive.
Even if you have the perfect potential Executor in mind, it’s important to name at least one alternate Executor in your Will as well. If you’re unsure of who to appoint as your Executors, or if you’re unsure whether the person you have in mind is the right choice, there are some important factors to consider.
6 Factors to Consider When Choosing an Executor
This article covers 6 of the most important factors to consider when appointing an Executor in your Will. We start with the most important consideration and move down the list to the less important, but still relevant, factors.
Trustworthiness, Honesty, and Reliability
The most important characteristic, by far, to look for in a potential Executor is trustworthiness, or what I’d describe as a combination of honesty and reliability. If your Executor isn’t trustworthy, the remaining considerations are unimportant.
Your Executor is responsible for all of your assets when you die. That means they have to locate, care for, insure, and assess the value of all of your belongings, properties, and accounts. Is that something you’d want a dishonest person tasked with? I don’t think anyone would answer that question affirmatively.
Furthermore, your Executor may hold funds ‘in trust’ for your minor beneficiaries, your children, and your spouse—in other words, the people you care about most. Even if your Executor is generally honest, but is not reliable, your loved ones may not receive their shares of the Estate in a timely or fair manner.
Geography. Where Does Your Potential Executor Live?
While not as important as an Executor who’s trustworthy and honest, it’s helpful to choose an Executor who lives close to you. Your Executor doesn’t need to live in the same city, or even the same province as you, but if you live in Calgary, and your appointed Executor lives in Berlin or Beijing, it could make things difficult.
As a general rule, if all other factors are equal, choose the Executor that lives closest to you. However, if your Executor lives in, say, Winnipeg or Vancouver, but they’re otherwise the right fit for the job, the fact that they don’t live in Calgary isn’t a deal-breaker.
Knowledge and Understanding
It’s important to choose an Executor that knows how to make financial decisions and has some general knowledge about finances and taxes. There’s no need to choose an accountant, financial planner, lawyer, businessperson, or other such professional to act as your Executor, however, it’s helpful to choose someone who makes sound financial decisions and has some experience with income taxes, investing, and stewardship of funds in general.
Even if the Executor you have in mind doesn’t have any background financial, tax, or legal knowledge, if you believe that they have the ability to seek out advice and guidance from trusted professionals such as lawyers, accountants, financial planners, and tax professionals, they may still be the right person for the job.
Communication and Proactiveness
Communication and being proactive are important characteristics that all Executors should ideally have. Executors are responsible for communicating effectively, regularly, and accurately with beneficiaries, legal professionals, loved ones, and financial professionals. An Executor who lacks effective communication skills may inadvertently foster conflict and incite legal claims against the Estate.
Executors are also responsible for distributing Estate assets in a timely manner. While the legislation isn’t specific as to what constitutes ‘a timely manner’, there’s extensive case law that deals with the topic, so it’s important that your Executor is someone who is proactive and will take timely action to ensure that the Estate is distributed without undue delay.
Age and Health
The age and health status of a potential Executor are relevant factors to consider, however, they’re not at the top of the list in terms of important considerations. While it certainly doesn’t hurt to appoint someone who’s younger than you and in good health, it’s worth remembering that your Will can be updated over time should your appointed Executor predecease you.
It’s up to you to set your Executor’s compensation amount in your Will. However, if you don’t know anyone who is otherwise suitable to act as your Executor, you may have to appoint a trust company to handle the task. Most of the major Canadian banks have trust services departments that will act as Estate Executors in exchange for a fee. The fees charged by most trust companies are non-negotiable, and typically exceed the compensation you’d pay to a friend or family member for acting as your Executor. That said, a trust company is a reliable option if you’re aware of the cost involved.
We’re Here to Help You Estate Plan
Hopefully, you have a better idea of who you’ll appoint as your Executor after reading this article, but if you’re still unsure, or if you have any other Estate planning questions, the Wills & Estates lawyers at West Legal can guide you through the Estate planning process and answer your questions in an informative, friendly, and practical manner that provides you with peace-of-mind.
If you don’t have a Will, would like to update your existing Will, or if you simply have questions about your Estate Plan, the experienced Wills & Estates lawyers at West Legal are pleased to assist you.Contact a Calgary Estate Lawyer