Photo illustration by The Globe and Mail/Sources: Getty Images
The beneficiary: “Paul” is an 85-year-old remarried widower in Northern Ontario with kids and grandkids. Honest, trustworthy and financially-savvy, the long-retired accountant has had the unique pleasure (uh, most of the time) of being an executor not once, not twice, but seven times. Naturally, he has some wisdom to share.
The inheritance: Though Paul indeed received his half of his parents’ estate (two of his executor adventures), this “inheritance” is the grand total of cumulative executive fees. In Ontario, typically between 3 and 5 per cent of the estate value is considered “fair and reasonable compensation.” From this unique side-gig, Paul has earned about $150,000 altogether.
“I kept time records just for my own edification,” says Paul, who put in about 200 hours into each estate, as smaller ones take just as much time as the larger ones do. He’s never actually crunched the numbers, but it works out to be a bit more than $100 an hour (or about a third of an average accountant’s hourly rate). “You don’t take on being an executor for the money,” says Paul. “There shouldn’t be any great financial incentive to be an executor, as that would create all new problems.”
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What he did: So why did Paul take on executorship? “The first one was an old friend and long-time client of mine who asked me to take it on because neither of his children wanted to and I knew all his financial information,” says Paul. “I considered it an honour and the will was pretty straightforward – all his money went to his spouse.” Because the process was relatively easy, Paul became her executor next.
The surviving spouse lived for more than a decade, during which time their children passed away, leaving fewer people to help and a lot more on Paul’s plate than he imagined. “If there are no living relatives willing to do it, the funeral arrangements fall to the executor,” he says. Ideally, as it was in this case, specifics about the funeral and reception will be in the will.
But wills are often outdated, vague or incomplete. Theoretically, all the assets of the deceased should be listed; practically, executors have to be “a bit of a detective to find all the assets,” he says. During another executorship, this time of a more substantial estate (with a business involved), Paul tracked down various pension plans, registered retirement income funds and registered retirement savings plans at different banks, and even gold coins locked in a safety deposit box.
Notifying family and friends involves more admin work than detective work. Paul has to notify family and friends first, but also doctors, employers, lawyers, landlords, bankers, accountants and service providers. Government agencies must also be informed, such as Service Canada, the Canada Revenue Agency, Canada Pension Plan and Canada Post. Valid health cards and passports should be returned and driver’s licences need to be cancelled. A final tax return also needs to be filed. “All of this takes time,” says Paul, “and some estates take far longer than others. Most people are shocked at how long the process takes.”
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What he learned: While Paul made his way through the executor to-do list, beneficiaries were inevitably circling round. “As soon as someone dies, people can see money out there and they’re ready. Well, they might be ready, but nobody gets paid until the executor is ready,” says Paul. His most straightforward executorship took a year-and-a half, while his longest one has been three years and counting.
Impatient inheritors sometimes blame or bully the executor, admits Paul, but he doesn’t let it bother him. “I’m prepared to stand up to them to do the right thing, even when there’s pushback, because that’s the job,” he says. If he foresees a sticky situation, Paul won’t take it on to begin with or he will turn it down when the time comes. An executor is a volunteer who isn’t legally obligated and has the right to refuse. “You need to ask yourself if you want to do it and if you’re capable of doing it,” cautions Paul. Some factors to consider are time, geography, health issues, family conflict and grief – but just not wanting to is sufficient. You don’t need to provide a reason or explanation.
For better or worse, says Paul, “you always have to go by the provisions of the will.” That might seem obvious, but it’s not an easy task when a will clearly favours some people over others. “I’ve seen situations where one of the children benefited far more than another one, but it’s not for me to decide. As an executor, I don’t get to make value judgments.” Similarly, beneficiaries can’t shoot the messenger.
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