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Wills and Estates
I understand that, in my Will, I can name the person whom I want to carry out my wishes. How do I choose that person? What is his/her job?
The person you refer to is called an "Executor"(or "Executrix"), and is also known as a "Personal Representative". Choosing your Executor is a very important decision, because that person will have the responsibility of gathering together all of your assets and liabilities, paying your debts and disposing of your assets in the way that you instruct in your Will. One might say that your Executor has to be part lawyer, part accountant, part investment adviser and, heaven forbid, mediator-peacemaker among your heirs. In the end, it must be a person who you can trust and in whom resides the unique talent of "common-sense". Just because you name a person as an Executor in your Will does not mean that person is obliged to act in that capacity. Therefore, speak to him/her in advance to make sure he or she is willing to act.
Choose someone who knows what it means to be an Executor. The mere fact that someone is a professional (lawyer/accountant/investment counselor) does not mean they have dealt with Estates.
Consider the age of the person you choose and be prepared to make a change in your Will to change the Executor in the event that you both grow "long in the tooth" together.
If you choose to appoint children as Executors, and you have more than two children, I recommend that you limit the number to two. If you appoint just one, the others may be constantly "nipping" at his/her heels. Appointing two always appears (and in practice is) more settling for everyone concerned. In some cases, however, you will not be doing your children a favor by placing them in this unenviable position of authority. Use good judgement.
The identity of your Executor(s) should not come as a surprise to your family at the time of your death. Tell them who you have appointed as Executor so that they will know in advance the type of person that they will be dealing with and who to contact in the event of death.
Provide your Executor with a copy of your Will. Many lawyers will see that you are given a form to complete and pass on to your Executor with the copy of your Will. This form includes such information as your social insurance number, the location of your safe deposit box (and key), your life insurance policy numbers (and location), your deeds, your mortgages, your list of investments, your computer passwords (or at least where to find them), etc. This will substantially reduce the time taken by your Executor in chasing this information down.
Speak to your Executor about what he/she will charge as a fee to perform this service. The fee is almost always expressed in terms of a "commission" or percentage of the value of the Estate. Generally speaking, the greater the value of the Estate, the lower the commission. You almost never see a commission exceeding 5% and, if your Estate is large, you often see commissions in the 2% to 3% range. As well, an experienced lawyer will ensure that assets that do not require the active participation of the Executor are left in such a manner that the chargeable commission is not applicable - or at least will advise you on that matter so that you can make an intelligent decision. This is applicable to real estate specifically.
Lastly, in this RRSP season, be aware that you can designate the beneficiary of your RRSP in your Will, if you have not done so in a specific declaration filed with your RRSP provider. Generally speaking, it is advisable to designate your spouse because your spouse will have certain elections available to him/her under the Income Tax Act (Canada) which will allow for the deferral of tax in certain circumstances, depending upon which elections are exercised.
Making a Will and appointing your Executor is a serious matter. Get advice from a lawyer who is active in estate planning and practice.