When you make a Will, you need to make a lot of important decisions – like how old your kids will be when they inherit your estate, and who will receive your family heirlooms.
One of the most important decisions you’ll make is naming an “executor” who will be responsible for managing your affairs after you die. Your executor may have to do things like arrange your funeral, deal with utility companies, cancel subscriptions, clean out and sell your home, close your bank accounts, file and pay taxes, and distribute your assets to the beneficiaries named in your Will.
Some people appoint a spouse, a child, or another relative as executor. Others decide one of their friends is the best option. But did you know that there are professionals that can take on this role instead?
There are only a few companies in Canada that are professional executors. Trust companies or “corporate executors” specialize in administering complex, contentious and/or high net worth estates.
Let’s have a look at some of the benefits of choosing a professional executor instead of a family member or friend.
The job of an executor is time-consuming and challenging. Financial Concierge Inc.’s comprehensive Executor Checklist contains over 300 tasks that an executor is responsible for. It can take 18 months to settle even a simple estate!
Taking on the role of executor can feel like a full-time job – something that family and friends are often not prepared for. It’s also a role that most people have no experience with. Professional executors specialize in administering estates. It is their job to make sure that the estates they manage are handled efficiently and properly – this means that beneficiaries are likely to get their estate distributions sooner.
Managing someone’s estate from a different country – or even a different province – can present certain challenges. In some cases, an out-of-province executor will be required to secure the assets of the estate with something called a “surety bond”. If the executor lives outside Canada, there can be negative tax consequences for an estate. Finally, if your executor lives far away from you, it may be more difficult for them to manage the sale of physical assets like your home.
A professional executor works locally. This allows your estate to avoid the complications and potential costs associated with appointing an executor who lives elsewhere.
Neutrality and Impartiality
Executors have to balance the interests of a number of people – including the estate’s creditors and all the beneficiaries. This difficult task can create family conflict or stir-up existing family discord. One way to help avoid these kinds of issues is to appoint a neutral and impartial professional executor.
An executor is responsible for interpreting and carrying out the Will’s instructions impartially. This is often easier for an individual who is not a beneficiary and has no personal relationship with any of the beneficiaries.
When you appoint a person, there is no guarantee that the person will be able to do the job. The executor could die before you or be mentally incapable and unable to take on the role. It’s also possible that the person who starts acting as your executor won’t be able to see it through due to death or incapacity.
Another benefit of appointing a professional executor is the consistency and stability it ensures for your estate. Appointing a professional executor company provides peace of mind that your executor will be there to carry out the job after you’re gone.
It is important for executors to understand the legal responsibilities that come with the role because executors can be held liable for any mistakes they make. Most of our friends and family are unfamiliar with the process of settling an estate, yet – often without even realizing it – they accept legal responsibility for their mistakes.
Professional executors are aware of the intricacies of estate administration and protect themselves and the beneficiaries with Erassure® estate risk assurance.
Relieve your Friends and Family
Losing a close friend or family member is a very difficult experience. For the person you name as the executor of your estate, this loss will be coupled with the responsibility, stress, and time pressures associated with administering your estate.
Appointing a professional executor relieves your family and friends of the additional worries that come when an inexperienced person is named as executor.
The additional layer of privacy, impartiality, and expertise that comes with appointing a professional executor can give your friends and family the time and space that they need to grieve and celebrate their memories with you.
Consider Assigning a Professional for the Job!
Choosing an executor is one of the more difficult parts of making a Will. But knowing that you can appoint a professional in this role may help you finally complete the Will you need.