Choosing an Executor: When a Corporate Executor Is A Good Choice
By Marla Shragge, LLB, CFP, TEP, Wealth Planning Group
Jim and Jane were pleased with themselves. They were finally meeting with their lawyer, Simone, to have new wills prepared to replace their outdated wills. After providing details of their assets, explaining their family circumstances and outlining their estate distribution plans, Jim and Jane hesitated when Simone asked: Who is to be your executor when each of you dies? And who is to look after your estate once both of you have died? This was something they hadn’t considered, so they asked her for guidance.
Simone explained that the choice of executors, including alternate executors, must be carefully considered, since the executors are responsible for distributing assets according to the will and for ensuring that the estate is properly administered in the best interests of the beneficiaries. Depending on factors such as the nature, complexity and size of the estate assets, the dynamics of the beneficiaries, and the specific distribution intentions in the will, an executor will often need to spend time, and possibly a great deal of time, dealing with paperwork and details, financial institutions, and legal and accounting professionals. It is therefore important to choose an execurot who would have the necessary time, skills and ability to handle the duties expected. Similar considerations also apply to the choice of trustees if one or more trusts are being established in the will, which Simone noted is an important part of Jim and Jane’s estate plan.
Simone also pointed out that for some, the choice of executors and trustees can be challenging, for any number of reasons:
- Family members or friends would not have the time, knowledge or experience to act
- The estate is large of complex, or both
- There are complex family dynamics, such as blended families or possible concerns that family members may not get along
- There will be one or more long-term trusts, such as a spousal trust, a trust for a special needs person, or multi-generation trusts for children and grandchildren
- There is a desire not to burden family members or friends
In these situations, appointing a corporate executor or trustee could be an ideal solution. As the name implies, a corporate executor is a trust company appointed in the will to administer the estate, while a corporate trustee is a trust company appointed as trustee to administer a trust for the benefit of its beneficiaries. Fees are generally charged based on a fee schedule.
A corporate executor or trustee can offer many important benefits:
- Dedicated staff specializing in estate and trust administration, including related tax matters, no matter how complex.
- Objective and impartial dealings with beneficiaries
- Continuous administration of long-term trusts
- Timely, orderly and tax-efficient administration
Jim and Jane immediately recognized that a corporate executor and trustee was the right choice for them.
When you are making your will, which can be one of the most important documents you will ever make, it is important to ensure you choose appropriate executors and trustees.