What is an executor?
An executor is a person named in your Will who is responsible for administering your estate. An executor is often referred to as a "personal representative" and "estate trustee".
You can appoint more than one person to act as executor at a time. You can also appoint alternate executors who act if one or all of the initial executors die before you or are unable to act. This helps limit the number of changes you will need to make to your Will
The executor is a fiduciary, which means they are required to act in the best interests of the beneficiaries of the estate.
What does an executor do?
In many cases, a lot. An executor's responsibilities vary depending on the nature of the estate and terms of the Will. An executor's duties may include the following:
- making funeral arrangements,
- making an application to a court for a certificate of appointment of estate trustee (formerly a probate application),
- making arrangements for dependants,
- securing and gathering assets,
- paying debts,
- filing tax returns and paying taxes owing,
- investing estate assets,
- keeping proper accounting records,
- selling assets of the estate,
- distributing the estate in accordance with the provisions of a Will, and
- administering trusts created by the Will.
Who should I choose as an executor?
Your executor should be a person you trust and who is competent to carry out the duties of an executor.
Spouses typically appoint the other spouse or if the other spouse dies first, one or more adult children. Siblings are also often appointed as executors or alternates. Close friends, particularly those with expertise, are options as well.
Although sometimes it is unavoidable, think carefully before appointing executors who do not live near you or who are older than you. If you don't have a person who you are comfortable appointing as an executor, a lawyer or trust company is an option.
Are executors compensated?
Usually. Executors are typically entitled to "reasonable compensation" for their efforts which is typically about 5% of the value of the estate. Compensation is determined using a tariff, calculated at 2.5% of each of (a) capital receipts; (b) capital disbursements; (c) income receipts; and (d) income disbursements, plus 0.4% per year for care and maintenance. This figure is then adjusted based on factors such as the complexity and size of the estate and results achieved. If there is more than one executor, the executors share the compensation.
The executor will typically calculate their compensation and request the approval of the beneficiaries. If the beneficiaries do not agree, where there are minors involved or in other circumstances, the court must approve the compensation through a process called the "passing of accounts".