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Choosing a Personal Representative - Executor
Who is the best choice to act as the Personal Representative or Executor of my estate? By the way, Personal Representative or PR is the new single designation we use in Alberta to replace the traditional designations of Executor, Executrix, Administrator, and Administratrix.
As in so many legal matters, the answer to this question is: It depends. Primarily, the answer depends on:
How complex are the assets in your estate and where are they located?
How sophisticated are the people you have in mind?
Will they accept the appointment?
How long will it take to administer the estate?
How well do your family members get along and will they continue to get along after you die?
Are there any special considerations regarding the beneficiaries of your estate?
For the average estate that consists of a home and some money in the bank and perhaps an RRSP, most people will appoint their spouse as the first choice. When both the spouses die, so long as the children get along with each other, then they will appoint one or more of the children to act as PR.
If money will be held in trust for one child (perhaps a handicapped child), then appointing a brother or sister as trustee of this money can be problematic. In many cases it is the ideal choice and in other cases it can be the worst choice. Just remember this: whoever you appoint will be left with the responsibility and power to look after that share of your estate for many years.
When appointing a child or children, look at the mix of assets. If there are many discretionary decisions such as whether to sell certain assets and how to distribute them, then the choice of which child can be a delicate and important matter.
It is not necessary to obtain the approval and consent of your chosen PR before you name them in the will. Nor is it necessary to share the contents of the will with your PR. However, a PR can decline their appointment when the time comes to act. Based on our experience, the best practice is to ask your proposed PR before they are appointed.
Geography is an important consideration. When the PR resides outside of Alberta, they can be compelled to post a bond in order to take on the appointment of PR. When choosing between two equally qualified candidates, the one living in Alberta is the better choice. Be extra careful if you are appointing a PR who lives outside Canada. This may result in the estate or trust being a non-resident trust and subject to an entirely different tax treatment.
If the estate will be held in trust for any length of time, then make sure you choose a PR who will be reliable in managing the assets, filing the tax returns, reporting to the beneficiaries, and generally acting in a fair and impartial manner. This is where a corporate trustee can serve a valuable role. While some people balk at the expense involved, my experience is that their effective management of the estate often means they generate more returns than the fee they charge.
Generally speaking, your accountant or lawyer will not want to take on the role of PR. The PR must take on many personal tasks such as sorting through your personal belongings and this is not the role of your lawyer or accountant. You can stipulate in a letter of instructions next to your Will that your PR consult with professionals and you can authorize this in your Will as well.
In fact, when you review your estate plan with your family members, encourage them to take advantage of the many services professionals can offer. For example, over the years we have worked with accountants, investment advisors, both real estate and personal property managers, insurance brokers and registry agents.
Here at Galbraith Law, we have over twenty five years of experience in dealing with estates. We can provide advice on many issues in the ongoing administration. In the past, we have acted as a mediator to resolve contentious estate matters and avoid further escalation. We also have considerable experience in preparing the accounting required by the Courts. Our templates for estate accounting have been approved by the Courts and make it easy for beneficiaries to follow what has happened.
Please contact us if you have any further questions. Also, please visit the Wills & Estates section of our website for answers to many other questions.