Money Management

How to Choose an Executor: 5 Tips to Help Seniors with Estate Planning

How to Choose an Executor: 5 Tips to Help Seniors with Estate Planning

Choosing the right executor is essential for your senior’s estate planning.

An essential part of estate planning or creating a will for you or a senior in your life is to choose an executor – someone who will execute (carry out) their wishes after they pass away. Making an informed decision on who will fulfill that role will help them feel confident that their wishes will be fulfilled and family conflict will be minimized.

What does an executor do?

In Alberta, the correct legal term for an executor is “Personal Representative.”  We use the word “executor” because it is generally the term people are most familiar with.  An executor is responsible for making sure a person’s last wishes regarding their property and possessions are carried out. They are responsible for making sure that any debts and creditors are paid and that the remaining money and property are distributed as the senior in your life wish.

An executor doesn’t need to be a lawyer or financial professional, but the law requires them to fulfill their duties with honesty and diligence and in good faith – it’s called doing their fiduciary duty.

An executor is entitled to compensation from the estate for their time.  This fee is typically outlined in the will. If not, the acceptable range is 3 – 5% of the estate value.

Learn more about Financial Concierge’s Estate Administration services.

5 Tips to Help Seniors with Estate Planning

1. Choose someone with a good head on their shoulders

The person your senior chooses as their executor doesn’t have to be a financial whiz, but they should have basic knowledge of how to manage finances. Also, it’s better if they tend to be conservative when it comes to managing money. They should also be comfortable with researching and asking for help from experts, as there will probably be duties that they won’t be familiar with.

2. Make sure the executor will be there to do the job and have backups in case they can’t

It’s critical that the executor is present and capable of administering the estate. If the person is in poor health or is the same age as the senior or older, they might not be alive or healthy enough when it comes time to administer the estate. That’s why it’s often better to choose someone younger than the senior to fill that role. Of course, life is unpredictable, so it’s a good idea to name a backup executor, called a successor.

The successor will take over if the first choice executor is unable to do the job. Your senior can name the successors, or they can opt to let their top choice executor name a successor. They can also choose a third party, like a business that provides this service, as executor.

A good rule of thumb is to choose an executor, one or more backups (named in order of succession), and have a third party executor as the final backup.

3. Understand the pros and cons of third-party executors

It’s essential to understand the trade-offs when naming a bank or financial service company as executor. First, a third-party can only fulfill their duties if their business is still around – so the company has to outlive the senior. Second, the fees you’ll need to pay them to execute the will or estate will typically be more than what you would pay an individual. Third, a bank or trust company executor will be impersonal in how they handle the administration of the estate. There will probably be different people involved over time, and there may be inflexible policies they must follow to protect their company from liability.

You may wish to consider Financial Concierge Inc. as our fees are lower, our services are personal and we work with you, in-home whenever possible. Interested in partnering with Financial Concierge for your, or a senior’s in your life, estate administration? Contact us!

4. Being named executor is not an honour – it is a huge task and responsibility

Some estates have a lot of assets and/or take a long time to administer. In this case, your senior may want to choose two (or more) people to act as co-executors. The reason being, if there are tough decisions to make or a lot of work to be done, it won’t all be left to one person. However, having more than one person in charge can lead to conflict.

For example, if children are all named equally as co-executors, it can cause tension or fights. Even if all the children are currently in agreement about how the assets are divided, issues can come up when it’s time to administer the estate. Your senior would be better off trying to prevent family conflict rather than “being fair” to their children. If there’s a lot of potential for conflict, a third-party executor may be the best option.

5. Review choices regularly and make changes as needed

Things can change over time. Your senior’s top choice for an executor today could be an unwise choice two years from now. It’s good for them to review their decisions regularly, especially in times where there’s a significant life change.

Significant life changes include, a divorce in the family, someone becomes estranged, or family members reconcile, etc. In the case of a blended family or second marriage, a third-party executor is often a good choice because they are neutral and unbiased.

Need help with your own or your elderly family members Estate Administration? 

Get in touch with us today to book your complimentary initial consultation.

 

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What is a Daily Money Manager?

Wondering what a Daily Money Manager is?  Watch this short video for a quick explanation.

 

 

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Pet Therapy with PALs Volunteers

Pet Therapy with PALs Volunteers

Therapy Dogs

Pet therapy, sometimes also referred to as animal-assisted therapy, helps improve patients mental, physical, social and emotional functioning with the aid of animals. Depending on the preference and volunteer availability, different animals can be used in therapy.

Volunteering in Calgary

PALs makes a difference across the city, visiting everything from seniors care centres to post-secondary institutions to improve the emotional and physical well-being of Calgarians.

Check out this video featuring the friendly faces of the therapy dogs and their sidekick owners volunteering for PALs.

If you would like to read more about PALs, head to the blog on ‘My Charities of Choice’.

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March Events

Events this month that you may be interested in attending:

Caring for Your Aging Parents, Speaker Series

A group of service providers has teamed up to bring you information you may need as you navigate Caring for Your Aging Parents.

In this Speaker Series, each evening will include one segment followed by a Q & A session with the panel, as well as an opportunity to meet our partners and have a light chat.
This event takes place in its entirety over Thursdays (March 8, 15 & 22, 2018).
General health and care (March 8)
Financial and homecare (March 15)
Housing options (March 22)
Each night’s session will run from 7:30 pm – 9:00 pm.
Event ticket will give you entry to all sessions.

Caring for your Aging Parents

Also, check out PocketBook “Health” 101

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