Many individuals don’t like to think about the end of their lives, so they put off conversations about creating or updating a legal Will, setting up Power of Attorney (POA) documents or managing other elements of an estate plan. We understand that these topics are sometimes difficult—perhaps even more so if they’re about a loved one rather than yourself—but they’re incredibly important. Your legal will outlines everything from the distribution of your assets to your final charitable donations—carefully laid out plans that contribute to your legacy while offering a parting gift to the most important people in your life.
Choosing an executor is a big decision—and, whether you’re making this choice for yourself or you’ve been named as executor in a loved one’s will, it’s critical that you understand the role and all that it entails. Here’s a brief overview to help you initiate these conversations and make these important decisions.
The role of an executor
Having a legal will is important no matter what stage of life you’re in. It’s never too late or too soon—essentially, if you have assets or dependents, you need one. In addition to making your wishes known and naming beneficiaries, a critical element of your will is naming the executor. This is the person who will oversee the distribution of your estate as outlined in your will while handling additional tasks such as filing your final income tax return.
According to Willful: An executor helps carry out the wishes outlined in a will. They are responsible for communicating with your beneficiaries (or heirs) to manage the settlement of your estate, following the direction laid out in your will. This can include anything from distributing assets, collecting debt, paying bills, and handling your funeral or burial wishes.
And: The name of this role may change depending on the province. For example, in Ontario this role is an ‘Estate Trustee’ and in Quebec, it’s called a ‘Liquidator’.
The responsibilities of an executor are often substantial and this can be a thankless job, so be sure to discuss the appointment with your executor before putting it in a legal document. If you don’t have a family member available and willing to handle this task, a lawyer or other professional can handle the responsibility for a fee.
Who do you choose?
First and foremost, your executor should be someone you trust implicitly: for example, a close sibling, an adult child or your lawyer of many years. Typically, it will be someone your age or younger (more plainly: someone who is expected to outlive you). It may be a family member, your spouse or even a friend. It’s best if they have strong organizational skills, great communication and interpersonal skills and ideally, a reasonable level of financial literacy. Your executor will have to manage both people and your money, so in a perfect world, they’ll be adept at both.
Once you’ve chosen an executor and they’ve agreed to take on this important task, it’s wise to sit down together and review your legal will. Ensure that your wishes are clear, all language is understood and they’re up for taking on this responsibility. If your executor doesn’t know one or more of your beneficiaries personally, ensure that they have the appropriate contact information. Keep all relevant paperwork in one central location (for example, a file or folder that’s been clearly labeled and refers to any additional materials in your computer). Show your executor exactly where this file is so there is no need to search for it later on. The goal should be to minimize paperwork, delays and confusion.
Talk to your lawyer about specific or complex end of life requests, and ask your financial advisor for ways to minimize taxation on your estate. This may involve setting up beneficiaries a certain way, utilizing insurance policies or making charitable donations to reduce your final income tax bill. Ask about donor advised funds, planned giving, leaving part of your estate to charity and other options. A financial expert can offer personalized advice and ensure that you will is organized to minimize the burden on your executor.
A legal will should be reviewed every 3-5 years and updated as needed. Reach out to your lawyer upon any major life changes such as a marriage, divorce, dramatic change in assets or the birth/death of a dependent. Ask about setting up POA documentation that can take effect as needed later in life, and ask questions if you’re unclear about anything in your estate plan. And remember, if you change your mind about something, you can change your will—just don’t put it off.
Finally, consider this. An executor should be someone you trust on multiple levels: personally, financially and in terms of responsibility and reliability. In short: choose an executor you believe will do a good job. While these decisions and conversations can be uncomfortable for some families, they’re necessary and will ultimately bring peace of mind.