What You Need to Know About Choosing an Estate Trustee
In our last post, we discussed the many benefits of having a Will, and the drawbacks of dying without a Will. In today’s article, we will discuss how to choose an Estate Trustee.
PLEASE NOTE: This article is for general information only and is not to be construed as legal advice. Please contact the author / Boardwalk LLP for a consultation if you would like to get legal advice on your personal circumstances.
Our firm is happy to help you create a Will or make changes to your existing Will.
The Most Important Part of Your Will: Choosing the Right Estate Trustee
When you make your Will, one of the most important decisions is choosing the right Estate Trustee.
The Estate Trustee is the person that has the authority to manage your entire estate. Your “estate” is everything you own at the time of your death, and includes (this list is only to provide examples, it is not exhaustive):
• Real Property: Houses, land, or any other real estate.
• Money: Bank accounts, cash, investments.
• Debts: Money you owe creditors, for example loans, mortgages, credit card balances.
• Physical Possessions: Cars, jewelry, furniture, contents of safety deposit boxes, and personal items.
• Business Assets: Shares in non-publicly traded corporation, intellectual property such as patents, trademarks, and copyrights.
Estate Trustee’s Responsibilities
Here are some common things that your Trustee must take care of after you die (this list is only to provide examples; it is by no means exhaustive):
• Notify necessary people and institutions of your death
• Find your Will and locate beneficiaries
• Make sure it is your last Will
• Make an inventory of your assets, then take control of, and protect those assets
• Determine the value of your assets at your date of death
• Apply for pensions, insurance proceeds, and government benefits payable to your estate
• Prepare probate application and file application with court
• Establish estate bank account
• Sell your assets as required
• Advertise for creditors, pay your debts
• File any necessary tax returns, pay taxes, and obtain a tax clearance certificate from Canada Revenue Agency
• Distribute assets to your beneficiaries
• Set up and fund any trusts that were set out in your Will
• Prepare estate accounts and distribute accounts as required
• Prepare and send release agreements to be signed by beneficiaries
• Distribute assets after receiving signed releases
• Pass accounts with the Probate Court, if required
As you can probably tell, the list of responsibilities is quite long!
A trusted legal professional can give advice and assist your Estate Trustee with many of the above tasks. However, the Estate Trustee still needs to make final decisions and give legal instructions. Therefore, choosing the right person to be your Estate Trustee is extremely important when making your Will.
Here are some factors to help you in this decision.
6 Factors to Consider When choosing an Estate Trustee
Their Age
Is this person much older than you? Chances are that this person will pass away before you or have later life health issues that prevent them from effectively managing your estate. It is generally not recommended that you choose someone a generation older than you. For example, a person in their 40s might not want to choose their 80-year-old grandfather to be their Estate Trustee.
Does this person know your family and your life circumstances well?
Make sure this person knows you well and understands the needs of your family. If they do not understand those needs, they can make financial decisions that negatively impact your family.
For example: does your child have a disability that requires special needs? Will the Estate Trustee be able to deal fairly with that child?
Are they reliable, trustworthy and financially responsible?
Do not choose someone as your Estate Trustee just to “honor them”. This is a huge responsibility and requires a lot of time and effort to successfully do the job. You may love your son/daughter/spouse, etc., but if you already know they are irresponsible, unorganized, and bad with money, you may want to choose someone else. Choose someone who has the necessary skills to do the job.
Have you asked this person if they even want this responsibility?
You should not appoint an Estate Trustee without first asking them if they are willing to take on this role! The job can be overwhelming and stressful, on top of their grief of mourning your death. The person should understand the what the full scope of commitment is, BEFORE they accept this role.
The Timing
Being an Estate Trustee is a big job that takes substantial time. In fact, the law typically gives the Estate Trustee one year from the date of death to complete the administration of the average estate. If someone lives far away (different province or country), or has other time commitments, you might not want to choose them as Estate Trustee. Time commitments could be ongoing health issues, work demands, or other family issues. The other time commitments or travel time might prevent them from finishing their duties before the one-year time limit.
A Substitute Estate Trustee
You should also consider naming a substitute Estate Trustee if the first Estate Trustee dies, becomes incapacitated, or is unable to act.
What if I can’t find someone person to act as Estate Trustee?
- You can appoint more than person to take on this role together. For example: I appoint my son and daughter, jointly as my Estate Trustees.
- You can appoint a company that specializes in Wills and Estates ato act as the Estate Trustee. They will typically charge a fee for this service, which you can discuss with the company upfront. Examples: Appointing a bank, trust company, or law firm to be the Estate Trustee.
What’s Should I Do Next?
If you are ready to get your Will prepared, please contact Gordon Duy The Vuong, Associate Lawyer at Boardwalk Law to learn more: [email protected] / 905.798.6731.
Gordon’s 5-Part Wills + Estates Series
Thank you for taking the time to read this post.
If you enjoyed this article, please stay tuned to Boardwalk Law’s blog and updates. In the coming weeks, Gordon will address the following related topics:
- Do I need a Will?
- How to Choose a Power of Attorney?
- What should I include in my Will?
- When should I change my Will?
