Posted by heritagelawoffices on Jul 23, 2024 in Blog, Wills & Estate

What Does an Executor Do?

When preparing your will, choosing the right executor is a significant decision. Your executor should be someone you trust will carry out your wishes after passing.

In Edmonton and throughout Alberta, executors play an important role in managing the affairs of the deceased. Understanding Edmonton wills and estates assures your estate is handled according to both law and expectations.

Let’s take a look at the responsibilities of an executor, how to choose one, and some common questions about their role:

What Does an Executor in Alberta Do?

An executor manages the deceased’s estate from death until all affairs are resolved and settled. This involves several key responsibilities:

Administers the Estate

The executor takes charge of collecting and managing the deceased’s assets, making sure everything is accounted for and protected.

Examples of assets include:

Real estate properties
Bank accounts
Stocks
Personal belongings (jewelry, vehicles, etc.)

They also have the authority to open an estate bank account to manage funds during the administration process.

Pays Debts and Taxes

One of the executor’s first duties is to settle any outstanding debts and taxes owned by the estate. They must make sure that all financial obligations are met before distributing the rest of the assets to the beneficiaries.

Distributes Assets

After all debts and taxes are paid, the executor can then distribute the remaining assets according to the will’s instructions.

This requires careful attention to detail to meet the legal standards and wishes of the deceased.

Handles Legal Matters

Executors often deal with various legal issues, including validating the will in court, resolving disputes, and managing ongoing legal actions involving the estate.

Examples of legal actions include negotiating with creditors, contesting lawsuits filed against the estate, and fulfilling court requirements for estate administration.

Communicates With Beneficiaries

The executor is also responsible for keeping all beneficiaries informed about the estate’s status and any decisions that affect their inheritance.

These decisions can include selling estate properties, adjusting the timeline for asset distribution, and resolving disputes among beneficiaries.

Common Misconceptions About Executors

When dealing with the role of an executor, there are some myths and misunderstandings. When it comes to appointing an executor for your will, it’s important to understand the realities of the position.

Here are some common myths:

Executors have unlimited power over the estate. Executors are actually bound by the terms of the will and the law. They have to follow both and act in the best interests of the beneficiaries.
Executors can distribute assets immediately. Executors cannot begin distributing assets right after the death. They have to make sure all debts and taxes are paid and that the will is validated legally through the probate process, which can take time.
Executors are paid. While executors may be compensated for their time and expenses related to managing the estate, this is not always the case. Compensation can be specified in the will or agreed upon by the beneficiaries, but it is not automatic.
Executors can resolve the estate alone. Managing an estate often requires help and support from different professionals, such as lawyers, especially when there are complications or legal considerations.
Executors can make major decisions about the estate. Although executors are responsible for administrative decisions, they must keep beneficiaries informed and involved regarding major decisions, especially those affecting the value or distribution of assets.

Can the Executor Be the Beneficiary?

Yes, it is common for executors to also be beneficiaries of the will.

There is no legal restriction against this in Alberta, and it often makes practical sense as the executor is likely to be someone close to the deceased.

This person is usually deeply interested in the efficient and fair distribution of the estate.

How Do I Choose an Executor?

Choosing an executor is a decision that should be made with care and consideration. It’s about deciding who is the best person for the job, not making a choice to spare someone’s feelings. When choosing an executor, here are some things to keep in mind:

Potential Candidates

Think about who in your life is both capable and willing to take on the responsibility. This could be a family member, a close friend, or a professional such as a lawyer or accountant.

A lawyer can include their expertise in legal and financial matters and provide professional objectivity to avoid disputes. They can also use their experience to navigate complex probate processes.

Suitability and Trustworthiness

The role of an executor is demanding and requires a high level of trustworthiness and organizational skills.

Consider their ability to handle financial matters and the complexities of estate administration.

These complexities can include managing overseas properties, investments, and business interests, as well as family dynamics and legal and ethical standards.

Have a Conversation

Before making a final decision, have a conversation with your chosen executor. Discuss the responsibilities involved to make sure they are willing and able to commit to the role.

If this person declines, it’s a good idea to have an alternative candidate in mind. If someone agrees and then changes their mind later, be sure that you update your will.

Formalize the Appointment in Your Will

Once you have made your choice and discussed it with your executor, it’s time to formally appoint them in your will.

This includes providing clear instructions and any necessary powers they might need to manage your estate effectively.

What Percentage of a Will Goes to the Executor?

In Alberta, executors are not automatically entitled to a percentage of the estate’s assets.

Instead, they may receive a fee, which can be a fixed amount or a percentage, as specified in the will or as agreed upon by the beneficiaries.

For example, the will itself can outline how the executor is to be compensated, such as a fixed fee, a percentage of the estate value, or another specific instruction.

If the will doesn’t specify this, the beneficiaries can agree on a reasonable fee. If they can’t agree, the executor can apply to the court to determine a fair compensation.

Along with compensation for executing the will, executors are entitled to reimbursement when it comes to out-of-pocket expenses related to the administration of the estate. This can include court fees, valuation fees, travel expenses, etc.

How Long Does an Executor Have to Settle an Estate in Alberta?

The time it takes to settle an estate can vary significantly. Generally, an executor has one year from the date of death – known as the “executor’s year” – to settle most estates.

However, larger or more complex estates may take longer to fully resolve.

If settling the estate takes longer without justifiable reasons, the executor may face legal pressure from beneficiaries to finish the process. While penalties are not common, prolonged delays can lead to disputes or legal action from beneficiaries.