Can You Tell the Crucial Difference Between an Executor an Estate Trustee and a Trustee in Your Last Will?
You need to understand these common terms. You will find them used in most lawyer-prepared Ontario wills. I’ll explain the difference so that you can understand why they are crucial to protecting your loved ones.
Let me assure you with this tip when you make your will:
What’s the Difference – Estate Trustee or Executor?
Ontario uses the gender-neutral term “estate trustee”. Formerly, the terms used in Ontario were executor/executrix. There were singular and plural spelling variations that are no longer used. These terms may still appear in documents from other provinces or states.
If you need to sell property, courts may need to certify the last will. You apply to court for a Certificate of Appointment of Estate Trustee With A Will. Your estate lawyer submits documents to court to prove or probate the will. This is a paper process. Usually, executors do not appear in court before judges.
What If There Is No Will?
Only Ontario residents can apply to be your estate trustee without a will.
Who Is Appointed Estate Trustee Without A Will?
Do you have three brothers and a spouse? All of these persons have rights to be appointed as your estate trustee without a will. Can they work together? You cannot assume everyone will agree to hire one lawyer.
Judges have discretion to decide who to appoint as estate trustee without a will. Your spouse does not rank higher than anyone else if there is no will.
Until a court decides, this uncertainty can lead to tremendous costs and delay in settling your estate. Months, sometimes years, can go by before judges decide who can sell your home.
Here’s a Wrinkle
Your will may state:
The capital T on the word Trustee does not carry any special significance. However, executors are fiduciaries and trustees with legal duties.
Trustees of Trusts in your Will
You may include a trust in your will. You would name a trustee to handle trust property for the beneficiaries of a trust.
Example: You want to set aside money (a trust fund) to support your children until they graduate from university. This trust fund could be limited to a particular asset or dollar amount. You will say that your trustee of the trust fund can invest all rental income or investment income for the university trust fund.
You can name your brother, Bryan, to be your trustee of this trust. He does not need to be your executor. Bryan may need to handle the trust fund until all your children graduate. This can be years after your executor, Joanne, has closed the estate.
You could name Joanne as your executor and Bryan as the trustee of the university trust fund.
Whoever manages the trust funds is your trustee of the trust in the will. They must follow the special terms of the trust. This is for the benefit of your children, whom you named as beneficiaries of the trust included in your will.
Here’s another example to clarify: Your executor, Michael, sells your home and pays your bills within the executor’s year.
Your will tells Bryan to hold the proceeds from your home in trust for the university trust fund. These trust funds are managed by Bryan for the benefit of your children for 10 years when the children graduate.