The problem with being an executor

Posted by on November 10, 2010 in estate planning

An executor of a will is not an easy job. As someone who has to carry out the wishes of the deceased, the executor has a duty to distribute the most possible to the beneficiaries. Sometimes, the beneficiaries are not so grateful to the executor, perhaps angry they weren’t chosen or perhaps believing the executor is taking too much compensation or favoring one beneficiary over another.

Even if the beneficiaries are not troublesome, every executor faces several practical issues- how to pay for the funeral costs and the costs of applying for probate (probate is the process of authenticating a will and required to deal with most financial institutions; the probate fee can be tens of thousands in a large estate)? After all, without a grant of probate, the executor cannot access the deceased’s funds unless it was held in a joint account or the executor already had signing authority over a bank account.

Since this process can sometimes take weeks and months (assuming the beneficiaries have not challenged the will or appointment of an executor), there is a cash flow gap between the expenses of administrating an estate and when the grant of probate can be presented to the bank to free up the estate’s funds. For executor’s with modest means, footing these costs or sharing it among the beneficiaries can bust a household budget.

The solution is to locate and find: (i) the will; (ii) the certificate of death;  and (iii) calculate assets and expenses to determine probate (ideally with the help of a wills and estates lawyer. With these in hand, attend to the bank and explain the situation and request that an advance of funds be made specifically to pay for the funeral expense and the probate fees. Most banks will make cheques directly to the appropriate persons (but not to the executor personally). The key is to find someone at the bank who has familiarity with dealing with these types of situations (which is yet another reason why the bank continue to need branches and we cannot work on a totally virtual world).

Good luck.

8 Comments on The problem with being an executor

By Jim Yih on November 10, 2010 at 11:37 am

Thanks for bringing awareness to a very important issue in estate planning.

The hardest part about being and executor is that there are a lot of questions that need answers but the only person with all the answers is no longer here. The executor must search and find information beyond just the will. They must find all life insurance policies, bank accounts, investment statements, RRSPs accounts, share plans, pension information, safety deposit boxes, etc. That’s why the role of an executor can be time consuming and very frustrating on top of all the emotional issues of greiving for a loved one.

Here’s the key . . . take the time to organize your financial affairs and communicate with your executor. not to be too self serving but my software program MY ESTATE ORGANIZER does exactly this. It asks a bunch of questions and your job is to provide the answers so when you do pass away, your executor has the answers to the questions. You can do this without the software but do you know all the questions?

Jim

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By larry macdonald on November 12, 2010 at 9:54 pm

I agree with Jim Yih. Communication between the executor and the estate owner is important. And with good estate planning, one can further streamline the settling of an estate, not to mention minimize probate fees and avoid delays in getting at least a portion of the funds out to beneficaries.

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By marie on November 26, 2010 at 6:01 pm

The title of this article cant be said enough. Having been there for both my parents and a big house full of stuff, plus, plus ( I think spent one whole day just cancelling cards), I always advise others to realllllllly think before accepting the role and before assigning it. That is one pair of shoes you have to walk in before you truly understand the enormity of it. Not to mention the time, energy and emotional (in most cases) management required to do it effectively. The more we or someone we love can have thier papers in order including POAs and clear directive of who gets what, the easier for all involved. Yes, in some cases a SPOON or sweater can and will cause an uproar. Trust.

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