The Preparations and Challenges of an Executor

A loved one has passed away unexpectedly. You are the executor of the deceased’s estate. You had agreed years ago to serve as executor and as such, you were aware your responsibilities entailed the complete handling and administration of the deceased’s estate. 

You weren’t, however, aware of the extent of these responsibilities, nor the complexity of the estate in question.   
You are now being contacted by the deceased’s family, friends, and financial institutions. People are asking you questions and you’re doing your best – but you don’t have answers for everything. While friends and family of the deceased are grieving the loss of their loved one and participating in the celebrations of their memory, you are caught in a whirlwind of paperwork and confusion. 

While the full extent of your responsibilities as acting executor may feel initially daunting, the good news is there is a wide array of available resources, tools, and professionals available that can ensure your administration of the estate stays well-organized and ultimately, unimpeachable. 

Dedicate time with the person who has appointed you executor of their estate.  Become familiar with the details of their life and overall situation. Do so promptly and in advance, so you’re prepared for the unexpected. 

Documenting the facts of the situation in advance can save you immeasurable amounts of time down the road and avoid all sorts of aggravation. One day it will be your job to carry out the wishes of the testator – the person who created the will and has appointed you as executor – and the more information you have the better. 

The testator will generally have named you as executor for a reason: they trust you. You may be a family member or close friend. You should feel comfortable asking questions to gather the information you will need to handle your administration effectively. Here are some examples: 

■ What are their income sources?

Obtain and take note of the contact information for their accountant, the lawyer who drafted their will, and the named beneficiaries of the will. 

If the testator is a business owner, gather information about their business – incorporation documents, shareholder agreements, and insurance information. 

The more you know in advance, the better prepared you will be when the time comes to act. 

When it is time to act, you, the executor, will often have more time to handle certain aspects of administration than you initially realize. Financial assets don’t vanish into thin air. Physical assets like homes, vehicles, and heirlooms will generally remain intact. 

Start by organizing a list of priorities. Sort those priorities based on their urgency. If you’re unsure where to start, there are many resources available to you. 

You will first need to locate the will. Hopefully, you’re already aware of its location. 

In most cases, applying for a grant of probate is a necessary task – or in other words, proving the will. Probate is the legal process of verifying the validity and good legal standing of the deceased’s will. 

This will take time, often at least six months, and in many cases longer. The waiting period gives you the opportunity to address other, more time-sensitive matters. Such matters often include: 

■ Advising annuity providers (when applicable) to stop income payments

Best practices  

Create an inventory of assets – and liabilities! Assets aren’t limited to investment accounts, homes, and vehicles. Estate assets will often include jewelry, artwork, cash, and even furniture and clothing. A reminder that some assets will not flow through the estate and thus pass outside the will of the deceased. Registered accounts such as the RRSP, TFSA, and RRIF often have named beneficiaries.  

■ Debts before distributions – Beneficiaries of the will are only  one piece of the puzzle. The estate may have debt. Creditors will need to know that you are handling the estate, and these debts need to be discharged before distributions can be made to beneficiaries. 

■ Keep good records – When beneficiaries ask questions, you’ll want to have the answers to those questions at your fingertips. Keeping an accurate record of your actions and progress will help. This includes keeping all receipts for any expenses incurred.

■ Understand your responsibilities – The estate is an individual and separate entity from the individual. The executor is legally responsible for the filing of the deceased’s tax returns. 

■ Help is available – When in doubt, seek assistance, professionals can help. Solicit the services of an accountant for tax filings. You can also seek legal guidance. If you’re unsure of any of your obligations, consider hiring a lawyer, even if only for a one-time consultation. In many cases, the deceased will have had a Financial Advisor or several. Your own Financial Advisor may also be able to assist you. 

Ultimately, having both a comprehensive understanding of your responsibilities, as well as an awareness of the resources available to you, will empower you to act confidently and in good faith as executor of the estate. ■