Acting as an executor can be difficult when the estate plan is straightforward, but it becomes even more so when the plan is complicated — as is often the case with a blended family’s estate plan — or when there are competing interests and tense family relationships.
“If you’re facing a situation that already has some friction, it would be a very thankless job,” says Tom Junkin, a Calgary-based senior vice president, personal trust services and operations, Fiduciary Trust Co. of Canada, a division of Franklin Templeton Investments Corp.
To make the process easier on family and friends, many experts advise hiring a third party — a corporate executor. “They don’t get tired, they don’t get sick and they don’t die,” says Ian Lebane, will and estate planner, wealth advisory services, TD Wealth in Toronto. “They’re neutral and they don’t have an agenda.”
For clients who want to keep family involved in the distribution of their estate, Sébastian Desmarais, an associate with Tierney Stauffer LLP in Ottawa, recommends an odd number of executors — either one or three — so that the plans are not held up by disagreements. If choosing three executors, clients can select one from each side of the family and then have a third non-family member such as a close friend or corporate executor.
“The advantage here is you can put a majority clause [in the will] so two out of three prevails,” says Desmarais.
Another option is for the client to appoint two executors — a corporate executor and a family member or friend who can act as an advocate. Sometimes clients are worried that their children might be bullied by their spouse or vice versa, says Junkin. Appointing a family member as executor in addition to a corporate executor is one way to make sure every voice is heard.
“The corporate [executor] can take the heat and bring the neutrality,” he says, “but your friend or family member who may be a good friend with your spouse can represent his or her interest to the corporate [executor].”
If a client does intend to choose a family member or close friend as an executor, there are some specific characteristics and qualities he or she should look for in a candidate. For example, an executor should be younger than the client and in good health so that he or she will be around when the client dies. The individual should also be a resident of Canada and, preferably, of the same province as the client; he or she should be trustworthy; possess good communication skills; be organized; have an open mind; and have the ability to deal with conflicting interests.
The client should also make sure that his or her choice of executor would be willing to take on the job. “This isn’t something you can just take care of on a Saturday afternoon,” says Lebane. “It can be burdensome.”
Even if a client’s son or daughter is capable of taking care of the estate, it doesn’t mean that he or she would have the time or interest to do so.
Once an estate plan is finalized it’s a good idea to suggest that clients talk to their families about their plan, to avoid surprises after a parent’s death, and the possibility of the estate getting held up in litigation.
Unfortunately, there is no guarantee that clients will follow through even when they are advised to speak with their families. In reality, few people actually hold a family meeting to explain their estate plans, says Junkin. Instead, most people prefer to keep the information confidential and simply assure their beneficiaries that they will be treated fairly.
Some advisors may choose to help by arranging and hosting family meetings, although that may prove difficult for most due to time restraints. “I think most professional advisors are pretty busy to be doing that intensive … psychological counseling kind of work,” says Junkin.
This is the third article in a three-part series on estate planning.