When a loved one or a trusted friend in British Columbia asks you to be the executor of his or her estate, it is a great honour. It shows that he or she regards you as a trustworthy person who will be able to handle the necessary tasks to close the estate. These include the collection of assets, settlement of debts, filing of the necessary tax returns and the distribution to the beneficiaries.
However, be aware that you have a choice if you are asked to be an executor, and the acceptance of the appointment is up to you. It is important to understand the challenges you will have to face before you give your approval to take on the responsibility.
Challenges an executor can anticipate
Although the task of an executor is challenging, it is necessary — and if you are the right person for this role, here are some responsibilities of an executor, along with some suggestions for how to address them:
- You can decline — You may find the circumstances unworkable for various reasons, thus you may waive the appointment. The court will likely then appoint an estate administrator to take over the duties. Another option is for another person to file an application to be the estate administrator with the court.
- Disputes with heirs — As the executor, you will stand between the beneficiaries and the deceased person, and you may have to exercise control over heirs who try to help themselves to heirlooms at will. Distribution is the task of the executor, and you may have to deal with family disputes — especially involving the sale of goods and distribution of proceeds. It may help to explain the wishes of the deceased to all heirs as soon as possible after the death, and to secure the assets and the home immediately.
- Time drain — The time-consuming tasks will include dealing with the liabilities and debts of the deceased person. This includes paying any owed taxes and filing the final Tax Return in the Year of Death. This will require reporting any income — including the disposal of goods in the estate — in the period from Jan. 1 of that year until the date of death. You do have the option of asking the estate lawyer or other professionals to handle these tasks if needed.
- Personal liability — If you fail to pay all the owed taxes before you pay the heirs and the remaining funds are insufficient to cover tax obligations, you could be personally liable. Make sure the beneficiaries understand that you must settle all the amounts owed to those who have legitimate claims against the estate before they can receive inheritances.
- Accounting – You will be responsible for keeping track of all expenses related to the administration of the estate while following provincial laws and the wishes of the deceased according to the will.
There is always a quick succession of events immediately after a loved one’s passing, and while some tasks, such as the arrangements for a funeral will need immediate attention, other duties — such as estate administration — can wait until you have had time to deal with the loss. If you want to have questions answered before accepting an appointment as executor, or if you need guidance and advice in carrying out the tasks in your role as executor, you are free to secure legal counsel.