Executor Insurance from ERAssure.com – Marketing Mavens or What

Question: As executor of a parent’s estate, do you need insurance to protect you?

James Daw’s Toronto Star article at moneyville.ca suggests one answer is ERAssure.com. I’ll give you more info to consider. But you must check out this company’s site. It’s a marketer’s dream. Study it and learn how to redesign your own website.

ERAssure’s Homepage

Are you an executor or a lawyer? If so, you’ll be engaged by the website right away. These are the target audiences for the company’s product – errors and omissions insurance policies for an estate’s legal representative.

Who Needs ERAssure Coverage?

Estate legal representatives protected by the insurance policies include:

a)    Executors and Estate Trustees (those named in the will)

b)    Estate administrators (those appointed by the court where there is neither a will nor named executor)

For estate advisors, this site offers lawyers and legal teams accredited webinars for continuing education. The site includes blogs and articles from respected estate lawyers.

If You Are an Estate Advisor…

You need to know about the ERAssure product.

Like title insurance, your clients will ask and want to know:

•    Can I afford it?

•    Do I really need it?

•    What happens if I don’t have it?

•    What happens if I must make a claim?

•    What’s covered and what is not covered by the policy?

•    Is it really worthwhile?

Like so many other estate planning questions, you’ll get different answers depending on who you ask.

Luckily, the site has a list of FAQs. These help with your broad understanding.

Are You a Lawyer?

Then you are in luck. Advisors or executors cannot purchase a policy without legal advice.

Again, this goes back to my initial question. The answer depends on who is giving you advice to key estate questions.

Who Pays for the Insurance Premium?

For estates of less than $1 million, the premium, the website states, may be $1,700 for 3 years of coverage.

Normally, one would expect that this would be a personal expense. That means it is paid for by executors out of their own pocket, or later out of their compensation.

It is not an estate expense. That means that the beneficiaries must not pay for it.

But, it seems, everyone is entitled to have an opinion.

Short of the passing of accounts where the executor’s financial records are audited, who will know who actually paid for the premium?

I am sure some executors will cross that bridge when they come to it. But that is another problem. Can an executor take estate money to pay a premium without approval of the beneficiaries? That is a possible no-no.

Do I hear dissent?

Is this part of your executor compensation that you are not allowed to pre-take?

Should the premium not be paid for out your own pocket, and later possibly reimbursed?

Executors are Fi-du-ci-ar-ies

Being a fiduciary means executors are in a position of trust. They are held to the highest standards of conduct the law has.

They cannot profit or benefit themselves from their roles. They must serve the estate beneficiaries even above their own interests.

Executors’ Personal Liability

The website states executors have inherent risks they don’t know about.

Estate executors may also suffer from:

•    overconfidence – they won’t listen or may feel legal advice is not needed,

•    being bullied by siblings – who terrify family members, and

•    disgruntled beneficiaries – who stalk executors looking for their mistakes

These situations, as estate lawyers know, are part of every estate. As well, they know that:

•    There is no such thing as a normal family.

•    There are no perfect relationships.

•    There is no will that cannot be challenged.

(Perhaps a single parent with a single child has better odds.)

How Executors Deal with Probate Problems

•    Some take charge

•    Some barely survive

•    Some never learn to swim fast enough

Executors can feel like they were dropped into a shark tank.

I describe the world of executors’ personal liability as Executors Disease™. You can get insight into this by downloading my free e-book here.

Will Executors’ Insurance Work?

Any insurance product will meet resistance. You must get buyers emotionally involved. The ERAssure website does that and demonstrates trustworthiness. The company also shows it sponsors many events including those for the Ontario Bar.

Your executor compensation in a million-dollar estate can be $50,000. You may think, why not buy insurance?

It will be up to your lawyer to advise you.

However, you have other options.

1. You can hire a trust company as an executor agent. Pay them a percentage of your compensation to handle the estate; or
2. Hire an estate lawyer to help administer the estate with you. Again, some of your compensation would pay the lawyer’s fees acting as your agent; or
3. Do everything yourself without insurance. Learn about the job of being an executor and get experienced advice.

Executors Need More Than a Checklist

Executor Kung Fu is what I created to help executors master any estate. It is a roadmap. It teaches you the skills nobody else does. You won’t hear anyone else talking about these topics.

I cover them in a new paperback, to show how to make probate painless.

You can download a copy here or read a sample chapter and table of contents here.

Back to the question I posed at the outset about your parent’s estate and if you need executor insurance, the answer will depend on who your lawyer is.

Regardless, the ERAssure website is a winner.