Tuesday, July 30, 2013
If you’re considering making a will soon, you must face the tough question of who should be your executor. This decision is important as your executor can affect how much tax your estate will pay on death and how efficiently your estate will be distributed. You should wait to name an executor until after you’ve decided who will receive distributions and when and how they will receive them.
Your spouse may make sense as your executor because he/she will understand family dynamics and be sensitive to other beneficiary’s needs. However, consider naming a co-executor if he/she lacks financial understanding.
Naming a child may make sense if the child has financial or business experience, but be wary of hard feelings from other children.
Business associates will know about business assets that form a portion of the estate, but be careful of any foreseeable conflicts of interest.
You could hire an accountant or lawyer to bring business acumen to the table, or you can add a provision in your will requiring the executor to seek the advice of a professional.
Corporate trustees are expensive but may be worth the cost for the trustee’s expertise.
Other factors that may be important when choosing an executor include the duration of trusts, whether you have children from multiple marriages, and your network of friends and advisers.
Finally, it’s probably a good idea to choose an executor who lives in the state in which you live and where your assets are located.
See Tim Cestnick, Taxes: Pick the Right Person to Handle Your Legacy, The Globe and Mail, July 17, 2013.