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ESTATE PLANNING: Advice on how to choose an executor for your estate

ESTATE PLANNING: Advice on how to choose an executor for your estate

by Aryn Strickland

ELORA - Writing a will or an estate plan can be a daunting and uncomfortable task but it is one lawyers and estate planners alike say an individual should not put off.

Among the most important decisions to make when planning for that inevitable outcome is choosing who should be the executor of your estate.

“The executor role is one that seems sort of an honour until you have to act as an executor then it becomes more of a burden of responsibility,” explained Baker Tilly senior tax manager Bud Arnold.

“You would want to pick someone who has the knowledge and the ability to work through the terms of the will, work with professionals, work out any potential disputes that could arise between family members and administering the estate,” Arnold added.

That could be a spouse, sibling or child or it could be multiple individuals.

If the responsiblity of the role seems too much for one person or you are worried it could lead to tensions in the family it is a good idea to name a couple of executors to spread out the responsibility, Arnold said.

The role of the executor involves everything from assembling the estate information and return filing for probate purposes to filing the personal and estate tax returns.

They are responsible formaking the bequest, actually distributing the assets to the beneficiaries of the estate, Arnold explained.

“[Executors] are also the ones that are responsible for acting as legal trustees for all of the assets in the intervening period so from the time of death until the time that they are liquidated or distributed,” he said.

“If some business property or shares in a private corporation held by the estate then it is the trustee’s responsibility to act as the decision maker on those properties as well.”

The best thing an individual can do to make the eceutor’s role easier is to keep all of the information regarding their estate in one place and provide a list of instructions that is as detailed as possible.

“The more prepared you are for the inevitability of your passing and the administration of the estate the better,” Arnold said.

Keeping all estate documents in one file or binder and making your executor aware of where to access that information can be key.

“That will include the details of all your investments, life insurance policies bank account, where to find your will if it is not sitting in that same file, so who the lawyer is and then like you mentioned the access information for any online accounts,” said Arnold.

The list should include things like passwords to online accounts including social media.

“Another issue that I have seen come up sometimes that we wouldn’t have thought of say 15 years ago even is social media accounts.

“They need to be dealt with, so either having the passwords provided for those or clear instructions in the will that the executor has the right to request that these accounts be closed and addressed after their passing can be helpful as well,” said Arnold.

While the end can seem like a long way off, an individual should consider  whether to put together a will/estate plan past the age of 18, especially if they have dependents.

“If you have really any assets or if there is people relying on you, say you have kids for example or a spouse then it would make a lot of sense that you have a will as soon as possible,” Arnold said.

If you don’t have a will and an executor named in your will the distribution of your assets and appointment of who the executor or appointed trustee would be, makes the process time consuming, expensive and can lead to conflict.

“It is really best to write it out in a will and then you are leaving those who are behind with a plan.”

Before you sit down with a lawyer or estate planner to write out your will it is helpful to have an idea in mind of what you want to include in your list of assets.  

“I would say the most important thing would be to know two things, what you have and what you would like to accomplish with those things, so who you would like to receive the benefits of your assets when you pass,” Arnold explained.

“So when you come in to talk with somebody like myself about the tax issues with that estate plan or going in to your lawyer about writing up that will, you will be  able to address all of the issues about all of the components of your estate in one package all together,” he added.

 

April 12, 2019

 
 

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