Clients who are named as an executor in a will, or who are asked to perform the job when the deceased did not name an executor, should think carefully before accepting the appointment.
Serving as an executor is “neither an honour nor an obligation,” said Monique Charlebois, an estate lawyer in private practice in Oakville, Ont. and a former senior estates counsel with the Office of the Public Guardian and Trustee in Ontario.
An executor named in a will can decline the role as long as they haven’t already begun administering the estate.
However, “once you start down the path of acting as the executor, it’s very hard to extricate yourself. It’s the type of thing that needs a lot of thought before you start taking steps,” Charlebois said.
Clients might feel comfortable accepting the job where the estate administration appears straightforward — for example, in a scenario where the executor is also the sole beneficiary, said Jandy John, director of estates and trusts at Concentra Trust in Toronto. And many people accept the role out of a sense of duty to a family member or friend.
John also noted that estate lawyers, trust companies and accountants can help executors navigate the settlement. However, when the estate is complex, the would-be executor should consider whether they can handle the work.
“The first question is: Do I have the time to do this?” John said. “Is this going to add stress and anxiety to an already very busy and strained life and possibly send you right over the edge?”
In deciding whether to take the job, a would-be executor is allowed to gather information about the estate without being considered to have “intermeddled” and accepted the role.
Executors should consider the family dynamics, specifically whether there is a risk that one or more of the beneficiaries will be difficult or litigious, said Krystyne Rusek, estate lawyer with Speigel Nichols Fox LLP in Mississauga, Ont. Executors have a fiduciary duty to administer the estate on behalf of the beneficiaries and can be held liable if a court finds they’ve failed in this duty.
For example, a beneficiary might challenge whether an executor received the best price on the sale of a house if it wasn’t sold on the open market or the executor failed to get a proper appraisal. “Beneficiaries can make any claims they want,” Rusek said.
If a person is serving as an executor as a favour to a deceased friend, they may be regarded with suspicion by the family member beneficiaries, John said. “You have to be the decision maker for this family. They may be looking at you, asking, ‘Why are you doing this [job]?’”
An executor who’s been named co-executor of an estate should consider whether they’ll be able to work well with any other executors.
“It’s a double-edged sword,” John said. Co-executors can divide responsibilities, making administration easier, but if one co-executor shirks their duties, the other co-executors remain responsible. Unless the will states otherwise, estate administration decisions require unanimous approval from the executors, further complicating matters.
Executors should be particularly wary of estates where the assets aren’t sufficient to pay the deceased’s debts, Charlebois said. Executors have a duty to pay the estate’s debts before distributing to beneficiaries and can’t favour one creditor over another, except for preferential creditors such as the Canada Revenue Agency.
Good legal advice is “absolutely essential” when dealing with insolvent estates, Charlebois said.
A person who has a claim against the estate — for example, a surviving spouse making a dependent relief claim — can’t also serve as an executor, Rusek said, as they would be in a conflict of interest.
Would-be executors must consider whether they have the resources to pay for any expenses on behalf of the estate over the short-term, until they can be reimbursed by the estate, John said. For example, the deceased might have died owning a home but relatively little in the way of savings or investments.
“You have to pay the electricity [for the home], you have to pay property taxes, and at some point, that might be out of pocket until you can figure out how to get that [reimbursed],” John said.
On the other hand, some executors may decide to take on the role because of the opportunity to receive compensation, particularly if the estate was large. Depending on the circumstances, executor compensation can be as high as 5% of the value of the estate, though the amount can be challenged by beneficiaries in court.