Executor Responsibilities: A Brief Overview

A loved one’s passing can be a difficult and emotional time. That’s why handling the process of estate transfer can be a sensitive topic during this period. 

One of the best ways to navigate the complex steps of this process is to have a designated individual to handle this task, also known as an “executor”.

An executor has a wide range of important responsibilities, and understanding them is essential for proper performance and preserving the interests of every party involved.

Keep on reading to find everything you need to know about executors, including their responsibilities towards the estate and beneficiaries as well as other essential considerations to keep in mind.

What is an Executor?

Understanding the role of the executor of the will is essential to carry out the responsibilities of this task, so let’s start by defining it.

An executor is the individual designated in a will to handle the administration of a deceased person's estate. 

The role of an executor is held by a professional, such as an accountant, trust company, or family lawyer. However, it can also be handled by a family member in various situations.

This trusted individual plays a critical role in ensuring the deceased's final wishes are carried out exactly as they point out in their will. The executor also handles various other responsibilities, including paying off any debts that the deceased had when they passed.

One thing to note here is that an executor can also go by other names in some provinces in Canada. For instance, besides “testamentary executor”, some provinces, especially Québec, also call these individuals the “liquidators” or “personal representatives of the estate”.

While it’s common to have a single individual as an executor of the will, there can also be multiple executors to handle the task.

In that case, they carry out the same responsibilities as regular executors but need to agree on everything together. This is because they’re considered  “co-executors” and are regarded at the same level legally unless a person is named the lead executor.

The Process of Appointing an Executor

The most common way to appoint executor(s) is by naming them in the testator’s will. However, since the executors must locate the will themselves, executing the will can take a lot of time when executors don't know about their appointment.

For that reason, if you’re planning to appoint certain individuals as executors in your will, it’s usually best to discuss the matter with them beforehand to make sure they’re comfortable with the role, as it also bears a lot of time-consuming responsibilities.

What Happens When You Don’t Appoint an Executor in Canada?

According to Canadian laws, it’s not obligatory to write a will or appoint an executor while writing one. However, leaving a will without appointing an executor will make the process of settling your estate a lot more complex and time-consuming.

In that case, the court will step in and appoint someone to handle your estate. While this person will have similar duties to an appointed executor, the probate process might take longer since they weren't your designated choice.

The court usually follows a specific order when choosing an executor in case of non-appointing. This typically includes the deceased’s spouse or common-law partner, adult children, parents, and other relatives.

Is Being an Executor Obligatory?

If you’re appointed an executor but you don’t wish to fulfill these roles, you have the right to refuse it. 

However, this is usually best communicated before proceeding with probate, as the process becomes significantly more complex after initially receiving the role.

After refusing the role, the responsibilities will transfer to any backup executors identified in the will. If you were the only person identified as an executor, the court would treat it as a will without an executor and appoint one on the testator’s behalf.

What Responsibilities Does an Executor Have?

Following the passing of a loved one, the executor appointed in the will becomes responsible for carrying out a wide range of tasks. These include administering the estate and ensuring its proper distribution according to the will.

The executor will also have to deal with various aspects of the will while performing their responsibilities. 

Most of these roles are related to the estate, starting from locating the will and finalizing funeral arrangements to managing assets and paying the estate’s taxes/debts.

Besides the roles associated with the estate, executors also have to deal with the beneficiaries, which includes distributing the assets of the deceased to them according to the will. 

Dealing with the Estate

As previously established, the executors have to deal with the estate before addressing the beneficiaries. 

In this section, we’ll break down the different aspects of these roles and what executors do with them. 

This should also double as a step-by-step guide on what executors need to do following the death of the testator (the person who made the will).

Wills

The first step an executor must do when they’re appointed to their role (following the testator’s death) is locating the will.

This should be the first priority because this document serves as the roadmap for an executor since it outlines exactly how the deceased wishes to proceed with their estate. 

The will should also include any special considerations or instructions regarding the funeral arrangements and the testator’s final affairs.

The executor must obtain a copy of the deceased’s most recent will. After finding and accessing the will, the executor will need to carefully read the will to understand their duties as per the document.

Executors need to take note of all the beneficiaries in the will and notify them to communicate the will. This may also include retrieving any information from the beneficiaries that would be essential to fulfill the executor’s role.

The executor also ensures there are enough resources to cover any immediate financial needs that the deceased’s family might have, particularly if there are young dependents who rely on the deceased for financial support.

Probate

After collecting and reading the will of the testator, the executor will need to carry out various tasks that include other institutions and entities.

Depending on where you live, carrying out these tasks as an executor may require obtaining a probate. This is the legal process of confirming the will, its contents, and the individuals acting as executors as per the local laws.

While probate isn’t always mandatory, many entities will only offer their services to executors with probated wills. Since this process might take some time, it’s usually best to start with its proceedings right away.

Probate is also essential in situations where the deceased didn’t leave a particular will. In that case, the court will appoint an executor, so a probate here would officially recognize that individual’s authority to administer the estate.

Funeral Arrangements and Final Affairs

In some cases, the will would also specify the deceased’s funeral wishes. The executor must make all the necessary arrangements to meet the will’s instructions and pay for the funeral expenses out of the testator’s estate.

If the deceased doesn’t provide any special instructions regarding their funeral, the executor becomes responsible for making these arrangements.

This may involve decisions regarding the type of service, location, obituaries, and any specific requests that might be deemed necessary or outlined by the family.

Lawyers

As previously stated, being an executor isn’t exclusive to qualified professionals. Given the complexities involved in estate administration, especially those with significant assets or tax implications, seeking legal counsel from a lawyer specializing in estate law can be invaluable.

An experienced estate lawyer can guide the executor and the deceased’s immediate family through the legal process of executing the will while ensuring they comply with local and federal regulations.

Keep in mind that even after seeking the help of a lawyer, the executors still maintain the final say in how the estate of the deceased is managed.

Assets

Another step that the executor must begin immediately after the testator’s death is determining the overall value of the deceased’s assets and safeguarding them.

This task should be executed quickly because it impacts other aspects. For instance, the probate fees are calculated based on the fair market value of the testator’s estate when they died.

The process usually begins by reviewing recent bank and investment statements, considering both assets and debts.

Executors must also communicate and inquire about any personal assets that the deceased might have, including non-monetary possessions like company shares, personal belongings, or even intellectual property.

To prevent fraud, executors should also notify banks to close the deceased’s bank accounts and cancel their credit cards.

Executors are also responsible for protecting the deceased’s financial interests until the assets are distributed to beneficiaries. This prevents assets’ value from depreciating and is another instance where an executor might seek the help of a qualified professional for recordkeeping and/or financial advice.

Taxes

Executors are also not only responsible for handling the investments of an estate but also for their legal and tax obligations toward the Canada Revenue Agency (or the Revenu Québec, depending on the estate’s location).

This includes filing final tax returns for the deceased for the year of death (T1) and potentially previous years if not already filed prior to the testator’s death. 

In other words, executors are also responsible for locating/obtaining older tax documents and completing any outstanding tax returns.

Insurance Debts

Besides taxes, the duties of an executor of a will also include settling any kind of financial liabilities on the testator. This includes outstanding debts and financial responsibilities that the deceased must meet.

For instance, if the deceased had a specific insurance policy with outstanding premiums, executors must fulfill it by contacting the insurance company and repaying them. 

Additionally, executors should also ensure that any remaining benefits of an insurance policy are distributed adequately among the beneficiaries, especially if there are policy changes after the testator’s death.

Pensions and Benefits

Besides paying off all outstanding debts, the executor should also address the benefits that the deceased had before their death.

For instance, one of the estate executor’s duties is to cancel the deceased’s pension plans and non-transferable government plans, including the Canada Pension Plan or the Québec Pension Plan.

If there are transferable benefits, the executor must handle the process of transmitting them to the beneficiaries smoothly. 

In these cases, this also may require the help of a qualified professional, as it may involve complex steps and detailed paperwork filing.

Dealing with Beneficiaries

Once the executor creates a full inventory of the deceased’s assets and fulfills any financial obligations the deceased had, they should be ready to distribute the estate among the beneficiaries.

As previously stated, the first step here would be locating and identifying those beneficiaries. Unfortunately, this process can get complicated when it involves extended family members, especially when parts of the estate or family members are located in various provinces.

Executors must ensure absolute fairness and transparency while distributing assets, according to the instructions of the will. 

This includes safeguarding their assets prior to distribution and providing them with a detailed breakdown of the deceased’s entire estate, what they had to pay out of the estate’s funds to fulfill any arrangements and liabilities, and what every beneficiary gets in the end.

TL;DR

Being an executor is a significant responsibility that requires careful consideration and execution to protect the deceased’s estate.

While it can be a complex and time-consuming process, understanding the core duties and seeking professional help when necessary can ensure a smooth and efficient administration of the assets.

Parr Business Law can offer all the guidance you need to streamline the process and protect the interests of all parties involved, so don’t hesitate to contact us for further help.