The Finance Blogger

The role of an executor can be very simple and straight forward for most people, however the more assets there are and different types of assets the more complex it can be. Disposing of homes, rental properties, investments and heirlooms all take different and special skills. In most cases, the executor is a family member. They will work with the family lawyer and the rest of the family to carry out the instructions listed in the will.

Initial considerations for the Role of an Executor

Along with other family members, advise all relatives and then locate and examine the last will. Time may be of the essence, if there is an intention to donate human tissues. Also the executor should begin making decisions regarding the funeral arrangements as required by the instructions in the will and the needs of the family. Arrange a family meeting with the lawyer. Read the will. Follow the instructions given to the executor (s).

There are a number of things such as dealing with the post office to re-direct mail. Advising all family members and people mentioned in the will. Also taking steps as required to protect any assets that now belong to the estate. These can include cash, securities, jewelry, deeds and insurance policies.

Executors should also confirm that there is adequate insurance on homes and cars. If there is a business involved, the executor should oversee the continuation of the business. They need to determine what is required to continue the business on good footing.

The next step is really to prepare for distribution of the assets. But first you must determine what the assets are.

Determination of Estate Assets

The role of an executor includes meeting with the banks and other financial institutions were assets are located. You may need a copy of the will naming you as the executor of the will before they will allow you access to any accounts or safety deposit boxes. Most organizations will make this request and they may also request a copy of the death certificate.

Keep notes on everything and  a diary is probably a good idea to keep everything organized. Date all entries in your diary. Document all decisions. Note who was involved and any concerns or dissensions from the decision.

Make a list of all assets: bank accounts , insurance policies, household contents, personal effects, etc. The executor will also need to list employee benefits, outstanding salary, death benefits, group insurance, pension entitlement, medial and other health insurance benefits. Filings for the CPP benefit if you are in Canada.

The executor must also inspect and obtain professional valuations of any real estate, leases, mortgages, taxes, and businesses owned by the deceased. In some cases you may need three assessments and then average them to obtain the final price.

Dealing with the Court

The lawyer retained by the deceased will assist in this area, however the executor is responsible for overseeing this activity. Depending on the country of residence, you may need to provide the lawyer with copies of the inventory and the value of the inventory. Calculate estate taxes and other fee’s. The legal fee’s may be a fixed amount or it may be a percentage of the assets, It is important to establish this up front with the lawyer to understand what your obligation is in this area from an estate perspective.

Realization of Assets

Deposit all cash to an estate account. Assemble bonds, stocks and similar investments and arrange for sale to convert them into cash. Turn over real estate should to family members as instructed by the will. Also make arrangements for real estate to be sold. Collect rents  as well and deposit in the estate accounts.  Make all Insurance claims. Provide all necessary documentation.

Tax Filing and Executors Role

First,  tax filing should be filed for the last year prior to death up to the date of death. Secondly once the estate is wrapped up an estate tax filing is also required. If it takes several years before all assets are distributed. Multi year estate tax filings may be required.

Request a tax clearance certificate from the CRA or IRS.  The executor is free to distribute the remaining assets to the beneficiaries of the will.

Role of an Executor and a Caution

If the assets are large, sometimes family members are in a hurry to receive their portion of the assets. There are lots of reasons for this, so we will just mention that this occurs. The Executor is responsible for ensuring that the assets distributed according to the will. Pay all income and property taxes.

Sometimes an executor will pay out all of the funds, only to have to request some of the funds to be returned to pay final bills and taxes owed by the deceased. Far better to hold money back, pay the bills and then pay out all final assets to the beneficiaries. The beneficiaries may have spent the money. They may have used the funds to pay off their own debts. Or they may have made investments that make it difficult for them to pay their fair share of the remaining bills. This situation can create a lot of tension and discourse.  Better to deal with it by avoiding the situation in the first place.

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