With no will, there is no way. With no executor there is no will. Neither is good. But, what is worst of all, is a will that has incompetent executors. Doing a will that will work includes the choice of executor and that choice is often made on factors that are likely to fail.
An executor must be able to carry out your wishes even ones that are ambiguous. They have a considerable duty of care. This blog article from Penny Schneider will help you understand the duty of care. Others articles she has done can help you understand the process.
An executorship is not to be taken lightly. Chose carefully.
Common mistakes are:
- Incompetence. Neither knows what to do, nor does the necessities. Incomplete estate inventory can lead to understated probate costs and resulting penalties.
- Maliciousness. Cannot get along with heirs or other executors. Acts in self interest first.
- Unavailable. Lives far away or is very busy with other things.
- Does not listen to counsel. Estate law is not intuitive for most people.
- Fails to act in a timely fashion. Some things must be done within time limits. In tax law, failure to notice the “Executor Year” can be costly.
- Inability to be even-handed. Favours some heirs over others. In estates with cash deficiencies, paying a charitable bequest before a tax obligation is problematic.
Making someone your executor may seem like a compliment to their ability, but it is seldom a good thing for them. Suppose you make one of three children the executor. Should they receive a fee? If they do it is taxable income. If they do not are the other children gaining advantage?
A way to deal with the whole thing is to appoint a corporate trustee. They are efficient and objective, but not inexpensive. They work best with a person who can help them with the human aspects of the inconsistencies and conflicts found in many wills. Someone who knows you and your way of thinking is always useful and coupled with the corporate trustee’s efficiency there can be a good resolution.
Being an executor is likely not a job anyone should accept unless the estate is extremely simple and the instructions are clear. Complex estates will take time to resolve and many compromises will become necessary. It is very difficult for an individual to remain objective and effective throughout that process.
Choose wisely either picking an executor or deciding to act if you become one.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772