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Typically, before naming someone as executor in a will, the will-writer (or testator) asks the person if they’re comfortable with being their executor. Often, without fully understanding the legal duties and obligations associated with being an executor, the person accepts. However, accepting executorship over an estate in order to please the testator, or because they are flattered for being trusted with the position is often a mistake. Depending on the size and structure of an estate, executors can be tasked with a long and complicated estate administration process, and it’s important that executors understand what they’re agreeing to and are capable of handling all the tasks expected of them.
The duties of an executor cover everything involved with the estate’s administration, from the time of the testator’s death up until all the assets have been distributed from the estate to its beneficiaries. Often, one of the first tasks that an executor will be faced with is planning the funeral of the testator.
Generally, the executor must have the original copy of the will – there are scenarios which may arise where the original copy is not required and a copy of the original is fine. If the will is required to go through probate, which it most often is, the executor must provide the will before the probate courts to verify that the will is a valid will and can be executed.
After probate has been granted, the executor can begin to administer the estate, preparing it for distribution to the beneficiaries. Even after their death, the testator must repay any debts owed – the executor is tasked with paying these debts, including taxes, on the estate’s behalf (using the estate’s funds). Executors are responsible to do all that is necessary to ensure that they have not left any of the testator’s debts unpaid. This can include putting adverts in the newspaper to notify any potential debtors of the testator’s death and to notify the executor within 30 days if they expect to be repaid.
It’s crucial that the executor is careful to account for all transactions involved with the estate, tracking anything that goes into and out of the estate. Once the estate is ready to be distributed to the beneficiaries, the executor must provide an account detailing all the transactions made on behalf of the estate. The accuracy and detail of these records is crucial in the instance that a beneficiary of the estate raises a claim for passing of accounts. To help make this process easier for executors, it’s recommended that they open an estate bank account to keep all the estate’s funds in one place.
After all the debts and assets of the estate have been accounted for, the executor can then distribute the estate assets according to the will. In most cases, there can be excess assets of minimal value left behind with no one named in the will to receive them. The executor is responsible for disposing of these assets themselves. Once the estate has no remaining assets, the executor has finished their job.
Note that this is not an exhaustive list of duties that an executor will have – every estate administration process is unique and will entail various debts and assets that need to be attended to. This list covers the most common and important duties that an executor will likely be responsible for.
Executors will not be held personally liable for anything that the testator did or failed to do while they were alive which resulted in damages. The only scenario where an executor can be held personally liable is if they do something themselves that warrants liability. For example, an executor’s failure to give adequate notice of the testator’s death to those who are owed a debt by the estate, and then distributing the estate can be grounds for personal liability. In this case, the beneficiaries of the estate would not be held responsible for repaying such debts after they’ve received their portion of the estate, as they cannot be held liable for the executor’s negligent administration. The executor could be ordered to repay these debts out of their own pocket, which is why it is essential that executors keep an accurate and detailed account of the estate’s assets and debts. Additionally, as one would expect, if the executor demonstrates fraudulent behaviour, abusing their power as executor, they can also be held personally liable.
It’s no secret that an executor can have numerous responsibilities and can be expected to spend a significant amount of time and energy ensuring the proper administration of an estate. Executors can feel pressured by time as they usually have one year from the testator’s death to finish the administration and distribute the assets to the beneficiaries – known as the executor’s year. While this is not a strict deadline, if administration pushes beyond the executor’s year beneficiaries can begin to urge the executor with court orders to speed up the process if it is being unduly delayed.
In deciding whether you want to accept executorship or not, it’s important to understand that executors can be compensated for their efforts through executor’s fees. Under the Trustee Act, an executor is entitled to a maximum of 5 percent of the gross aggregate value of the estate unless otherwise specified in the will. In most cases, 5 percent is a high figure for the executor’s compensation, and fees are more commonly between 2 percent and 3 percent of the estate’s value.
When contemplating accepting executorship, it is also important to consider the proximity with which you live to the location of the estate’s assets. It can be quite difficult to administer an estate when you are living in another province or country. The tasks of an executor can usually not be done during a week-long trip to the place where the assets reside, and will require the executor be in the same city as the majority of the assets are for an extended period of time.
Acting as the executor of a will can be a significant burden, however, when done correctly, executors will be rewarded for their efforts. An executor of an estate will always be named in the will; if you decline the position, someone will be assigned the position by the courts. However, this can risk an incapable executor being appointed, creating extensive (and potentially expensive) delays in the administration process.
If you are an executor and are unsure how to begin the estate administration process, contact an experienced estate lawyer today. We can help guide you through the tasks of being an executor, and can help ensure that you are not held personally liable for any issues related to the administration of the estate.
Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at email@example.com.