Executors Who Are Professionals Need This Checklist

You are a professional and your client asks you to be their executor. What do you need to know before you say ‘yes’?

I identified the top 10 questions you should ask to protect yourself.

1. Are you ready to transfer your professional, impersonal relationship into a more personal one?

Your client’s relatives and beneficiaries may become your responsibility. Some families are not reasonable. Rational arguments may not persuade people who make irrational decisions.

In one case, six siblings needed five lawyers and two years to agree on how to list a family home for sale. Some people think to compromise means to surrender.

2. Will there be co-executors?

Will you need unanimous consent of all executors for decisions? If so, how will you share fees, workloads and deadline responsibilities? Can you work with co-executors who live out of the jurisdiction?

3. What are the estate investments and assets?

Will there be:
•    private company shares
•    a proper buy-sell agreement
•    substantial art collections
•    real estate and mortgages
•    risky stock options

These assets require specialized skills that you may not have. You will need to hire experts to advise you. You will need to develop a prudent investment plan.

4.  Can you devote the necessary time to attend the estate?

If you cannot make the time, expect trouble. Even if a beneficiary’s complaints are unjustified, they will affect your reputation and you personally.

Your executor compensation will not be as generous as your professional hourly rates.

Estate work can take several years. You may need to wait years for your compensation. Usually payment is made when the estate is ready to be closed.

5. Is the will prepared by a lawyer?

You need not review the will but you should know where the original will is stored. When the time comes only the original will is valid. You should ask if there is a backup executor in case you are unavailable to act.

6. Can you find an estate lawyer you can work with?

You are not under any obligation, regardless of what the will says, to hire the same lawyer who drafted the will. The will lawyer may handle wills but not estate administration.

You may not be called to act as executor for several years. Estate laws and procedures constantly change.

Having a relationship with an estate lawyer now means you can ask questions. Keep yourself informed and current. This will lower your learning curve and stress when it’s time to act.

7. Can you keep accurate estate records?

Record-keeping is essential. You must be accurate. Be prepared to account for every penny.

You must keep all records and assets safe. This includes digital assets and passwords.

8. Can you avoid conflicts of interest as executor?

That means you cannot have an interest in the estate that conflicts with your duties.

You can act as an executor and be a beneficiary. This is not automatically a conflict. Often parents choose children as executors and also make them beneficiaries.

However, you cannot let your rights as beneficiary take priority over your impartial executor duties.

What if you are a corporation’s advisor and corporate shares are part of the estate? Do you, as advisor, also become the estate executor?

Say you are required, as advisor, to set the sale price for corporate shares under a shareholders agreement. Do you have a conflict here?

You should recognize this as such. Step aside. Allow co-executors or alternate executors to handle these services.

You also cannot delegate your responsibility to set the sale price to an appraiser.

9. Will you need to hire people to help you?

Such agent fees may be deducted from your compensation. The issue is if the services are within the ordinary skills required of you as executor.

This rule does not apply to professional or expert services. These are essential in most estates.

10. Will your professional insurance liability policy cover you for services performed as executor?

What if you’re not comfortable and have little estate experience? You are better off asking a trust company to act as your agent. Their fees will usually take most of the compensation you contemplated receiving.

You may be no further ahead by consenting to be a client’s executor. Consider what’s involved before you say ‘yes’.

About Edward Olkovich

I am a Toronto estate lawyer and Certified Specialist in Estates and Trusts Law. I edit Carswell’s legal guide Compensation and Duties of Estate Trustees, Guardians and Attorneys. I have handled estate disputes and probate problems since 1978. © 2015