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Financial Fitness: Estate executor plays difficult and crucial role

Someday your mother, other family member or friend may ask you to be the executor of their estate, or you may ask someone to be one for you. Before you take on the role, or assign it, be sure you know what it will entail.

An executor is a legal representative named in a will to handle an estate. Depending on the size and complexity of the estate and the deceased person’s finances affairs, acting as executor can be difficult and time-consuming.

Duties of an executor

• Find, read and interpret the will
• Consult with a notary regarding the will
• Help with funeral arrangements
• Locate and deal with beneficiaries named in the will
• Prepare an inventory of the deceased’s assets and liabilities, which can include loans, jewelry, and real estate. Often the executor must locate the items.
• Deal with financial institutions: banks, insurance and pension plan companies
• Distribute assets, as specified in the will, which may involve selling real estate, if cash bequests are specified
• Pay debts and estate expenses
• File the deceased’s final income tax return

Some of these tasks require financial and communication skills to interact with bereaved relatives.

The good news is that an executor might not have to do all of this alone. Most provinces allow the executor to hire a professional without the permission of the family or beneficiaries. Notaries, accountants, and trust companies act as estate agents and are paid out of the compensation the executor receives.

Individuals often perform executor duties without compensation. However, provincial laws generally allow people or trust companies to charge for executor services. Minimum specified compensation is based on the value of the estate.

A trusted family member or friend is often a good choice as executor. But if you’re being asked, consider whether you have the skills and a good relationship with the family.

If you’re appointing an executor, consider the same qualifications. If family conflicts are possible, a non-family member may be the best choice for executor. It’s also best that an executor not live out of town to avoid travel expenses.

Before anyone agrees to be an executor, it’s essential that the person drafting the will and the potential representative meet to discuss what’s involved.

A financial advisor can help clarify issues at this stage as to what the duties will entail.

Once an executor is appointed, that person should not only be familiar with the person’s financial affairs, but also know where financial records and other important documents are kept, including insurance policies. This will make the job easier and ensure beneficiaries receive bequests as soon as possible.

Your notary or financial advisor can answer any questions you might have about acting as an executor.

Deborah Leahy is an Investment Advisor with Edward Jones
deborah.leahy@edwardjones.com
Member of Canadian Investor Protection Fund

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