You may be asking this question because you have to appoint an executor in your will, or because you’ve been named as an executor in a will. This article will cover the basics of what an executor is, what an executor does and cannot do, and what you should consider before appointing an executor or agreeing to become the executor of someone’s will.
what is an executor?
An executor is the person (or persons) who distributes your estate to your inheritors (often referred to as beneficiaries) and ensures your final wishes are fulfilled. An executor can be one person or can be multiple people named jointly.
If a will-maker names joint executors, the will-maker will also decide whether the joint executors can act independently, or if they must agree on all decisions and actions.
Most people name their spouse, family members, or friend to be their executor. However, a lawyer, firm, or estate management company can be named as an executor.
what does an executor do?
The following is a non-exhaustive list of tasks an executor may be responsible for:
- Paying off any debts of the estate;
- Recovering any debts owing to the estate;
- Filing and arranging the payment of the final tax return;
- Arranging the funeral and burial wishes of the will-maker;
- Distributing the estate to the inheritors; and
- Communicating with the inheritors throughout the settlement of the estate.
An executor can do these tasks personally or retain a professional to complete them (and pay such their fees from the estate). An executor can also be entitled to be compensated from the estate for their time spent acting as executor.
what can’t an executor do?
An executor can’t:
- Profit from their position (being compensated for their role is not profit);
- Put their interests ahead of the estate;
- Make any decisions that are contrary to the terms of the will;
- Fail to communicate with beneficiaries, or act dishonestly;
- Deal with the will-maker’s assets at any point prior to their death; or
- Make any medical decisions for the will-maker during their lifetime.
To give a person the ability to deal with your assets and make medical decisions for you during your lifetime, they need to be appointed as an attorney under a Power of Attorney, or a representative under a Representation Agreement. Any appointments under your will only take effect once you have passed away.
do I need an executor?
All wills need to name an executor, and it is best practice to name alternates in the event that your executor cannot or does not wish to act as executor.
If an executor is not named, the courts will need to appoint an executor on behalf of the will-maker. The person appointed by the courts may not be who the will-maker wished to take care of their estate, and there may be arguments among the inheritors of the estate about who should be the executor. By naming an executor in a last will and testament, the will-maker avoids future conflict, and makes sure the right person manages their affairs.
how do I choose an executor?
If a person is named as the executor of an estate, they do not have to accept the role.
Therefore, a will-maker should always notify their executor before naming them, to make sure they’re up to the task of administering the estate and communicating with the inheritors. If the will-maker cannot think of any persons who they feel could take on this role, they can hire a lawyer or trust company to act as their executor (for a fee).
do an executor need to apply for probate?
Before an Executor can deal with your assets, they need to “prove” to the Supreme Court of British Columbia that your will is legally valid. This involves making an application for “probate”, which is then reviewed and approved by the Probate Registry, and an “Order for Probate” is signed by a judge and provided to you.
Whether an Order for Probate is required depends on the assets. To deal with real estate, you always need an Order. The threshold for banks to release bank account funds varies from branch to branch (i.e. one bank may release $30,000 without an Order for Probate, while another may require one for funds greater than $20,000).
how can I get help as an executor?
While executors can apply for probate or deal with estate administration without any legal advice or assistance, this can cause significant delays, result in costly errors, and could even result in the executor being sued by the inheritors on behalf of the estate.
As a result, executors often retain a lawyer to assist them with court applications and estate administration and pay the lawyer from the estate.
If the executor is unsure about what they need to do as an executor or how to apply for probate, they should speak to a wills and estates lawyer.
If you have a question about this topic or another legal matter, contact Naz Khodarahmi for a complimentary consultation. You can book a consult through www.macushlaw.ca through our booking system, or contact Naz at [email protected] or 604-612-8024.