The executor/liquidator of a will has to handle many important tasks. It’s best to think carefully before appointing one or accepting this responsibility. Learn more about this key role in the estate settlement process.
The executor (or the liquidator, which is the term used in Quebec) is responsible for administering the estate of a deceased person. The executor/liquidator will ensure that the wishes expressed in the will are respected, including the sharing of the legacy. If there is no will, the executor/liquidator will distribute the estate’s assets according to the laws in effect.
The executor/liquidator may make many decisions, among them the amount of money allotted to funeral expenses. However, the executor/liquidator does not own the assets of the deceased, but merely administers them while settling the estate.
You can name the person of your choice, as long as he or she is of legal age. Ideally, you should make sure this person wants to take on the role.
Some estates can be very complicated to settle. This is often the case when the deceased owned a company or held significant financial assets. The situation can also be more complex with, for example, blended families.
In this case, you could name a professional, such as a notary, a lawyer or an accountant, as executor/liquidator. Most financial institutions and investment firms can also play this role.
If you do not have a will, then your legal heirs will be your executors/liquidators. They can fill this role together, or designate just one executor/liquidator by vote.
A friend or family member living abroad can also be named as executor/liquidator. This, however, could be very disadvantageous. In terms of taxation, it will be as though funds are being transferred to a foreign country. And that could trigger a much heavier tax bill.
The person who takes on this role must be named in your will. You can choose more than one person, but it’s unadvisable. Because two or more parties will have to make decisions unanimously, they may hit a roadblock in cases where they disagree. It’s also possible to designate a substitute executor/liquidator, who will take over if the person chosen is unable to fill the role or refuses to do so.
Be sure to choose an honest person, and someone of sound judgement. You should also take into account that person’s relationship to the heirs. If you name your children from a first marriage, is there a possibility they will be prejudiced against your new spouse? There are many situations that could lead to conflict. Try to keep these in mind when you choose an executor/liquidator.
The law imposes various obligations, such as acting in the interests of the heirs and growing the estate’s assets. Obviously, the executor/liquidator must also respect the wishes expressed in the deceased’s will. If any conflict of interest arises, the executor/liquidator must put the interests of the beneficiaries above his or her own.
Settling an estate is frequently not as simple as it seems. There are many steps to be followed, and the person in charge must be able to carry them out within the prescribed deadlines.
The executor/liquidator must:
Don’t hesitate to ask for help. The executor/liquidator can request the services of various professionals (accountants, tax specialists, lawyers, notaries, etc.) to provide assistance along the way. Their fees will then be paid by the estate.
Not necessarily. But given the complexity and magnitude of the task, you could provide for remuneration in your will. You could also specify that reasonable expenses incurred while settling the estate will be paid by the estate.
Obviously, the situation is different if the executor/liquidator is a hired professional rather than a friend or family member. In such cases, the professional will charge his or her usual fees to perform the task.
Whether you were or were not consulted by the deceased, you can refuse to be the executor/liquidator. And you don’t need to justify your decision. You do, however, need to notify your co-executors or co-liquidators, as the case may be. If no one else has been named, the heirs may assume this role. They can also appoint someone else to do so. If there’s disagreement, they can refer to the courts.
There is one exception: If you are the sole heir, you cannot refuse. However, you can authorize a professional to handle the various tasks required to settle the estate.
If you have agreed to be the executor/liquidator, you also have the option to resign along the way. The procedure is the same as for refusing.
The executor/liquidator can be sued if they have been negligent or dishonest. Even if a mistake has been made in good faith, the heirs will have recourse against the executor/liquidator. For instance, he or should could be sued if a more recent will is discovered. Moreover, if the process is needlessly drawn out, the heirs and creditors may ask the that executor/liquidator be replaced. In cases of fraud, a complaint could be lodged with the police.
As for the tax authorities, they may send a bill or issue a penalty if the executor/liquidator has distributed assets without first having obtained the necessary papers. At that point, he or she becomes personally responsible for any taxes the deceased may owe. And that could get very expensive.
The role of the executor/liquidator and the intricacies of estate planning should not be taken lightly. It’s best to think carefully about the choice of an executor/liquidator or about agreeing to take on the job. Don’t hesitate to talk to a professional to guide you through the process.
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