Everywhere I go I talk about the importance of making a will. Yet, even among the financially savvy, a will is one of the last things people seem to get around to making. It may be a general unwillingness to face life’s darker side. Or it may be that there are things people just can’t seem to decide on so they procrastinate.
One of the first things you must do when you make a will is choose your executor. If that’s been your stumbling block, ignoring the problem isn’t going to stop you from dying. Time to figure out exactly what an executor does, and who’ll be the best person to help your family settle up after you’ve shuffled off this mortal coil.
You can name someone to act alone (a sole executor), with others (a co-executor), or as a backup if the first appointed executor is unable to act (a contingent or alternate appointment). Whomever you name, make sure you get their agreement since that person has the right to turn down the job. While it’s often positioned as an honour, it’s more like a pain in the butt and only someone who is truly fond of you, or someone being well paid, will take the job.
So whom should you consider? Here are some of the most obvious choices:
Your life partner: This can be a good choice if your assets are relatively uncomplicated. An estate made up of bank accounts, term deposits, a house, an RRSP and pension benefits wouldn’t be difficult to administer if it was going outright to a surviving spouse. If the assets are complex, or if there are testamentary trusts involved, then a co-executor with knowledge and expertise in the areas of investments, income tax, trust matters and accounting would be a good idea.
One or more of your children: Mature adult children may be familiar with your assets and the ways in which those assets have been managed and can keep costs down. Minors can’t act as executors, so make sure you name a contingent executor if your kids aren’t of age just yet.
Friends/business associates: Same-age peers may find themselves acting as executor at a time when they themselves need help in managing their affairs. Choose an older executor and she may die before you. Or he may die during the administration period at which point his executor—someone you may not even know—will have to take on the administration of your estate. Yuck.
Family lawyer/accountant: This could be a great choice if they’re set up to do estate administration. But asking your divorce lawyer to act as executor is a little like going to a podiatrist to have your baby delivered.
Corporate executors: Trust companies are experienced, neutral and available 52 weeks of the year so your estate administration won’t be delayed because of illness, vacation, or business commitments. Every executor has the right to collect a fee from your estate, and corporate executors most definitely do. But if you’re leaving a young family, people who aren’t equipped to handling the ins and outs or a complex estate, a corporate executor will be worth every penny.