Sarah Widmeyer and Brett Burke discuss why you should carefully consider the role of executor if you’re asked, emphasizing the time, energy and skills required.
Brett shares the duties of an executor, including legal obligations, the importance of legal and tax advice, recording all transactions, digital asset management and obtaining executor liability insurance.
Sarah Widmeyer 00:16
Welcome to Conversations on Wealth, a podcast dedicated to helping Canadians navigate the complexities of wealth with a multi-dimensional approach to planning and wealth management. I’m Sarah Widmeyer, SVP and Head of Wealth Strategies at Richardson Wealth. So today we’re talking about being an executor, what it involves, and why you should consider it carefully if you’re asked to take on the role. While it may feel like an honour, and it most certainly is, you also need to understand the commitment involved. It takes time and energy, and you’ll need to be willing to navigate emotional and challenging circumstances as you manage the responsibilities of settling someone’s estate. Here to walk us through it all is my guest, Brett Burke, and Brett is a Senior Financial Planner at Richardson Wealth and works with investment advisors to counsel their high net worth families, executives and entrepreneurs on wealth planning solutions. Brett, it’s so great to have you here with me today.
Brett Burke 01:25
Yeah, thanks for inviting me.
Sarah Widmeyer 01:26
My, my pleasure. This is, something that is near and dear to my own heart, and something that frankly, I’m going through right now. My mom passed a little over a year ago, and my brother and I are the executors on the estate. And it’s a pretty simple estate, and of course, we’re the executors on the estate. But I have been shocked at the amount of time and complexities and forms and things that we have to do to settle this estate. And it’s over a year now, it’s a year and a half later, and we’re still not settled, we’re still not done, we’re still in the middle of some of these things. So this is ugh, for me a timely conversation, but also very meaningful conversation that I’m so glad we’re about to tackle. So let’s start by approaching it from both sides. Why is choosing the right executor so important. And if someone asks you to be their executor, why you should consider it carefully before you say yes?
Brett Burke 02:36
Yeah, that’s great questions. I’ll take that first one, about choosing the right executor. So you know, just given the scale of the responsibilities and the trust that you have to ask somebody to take on when they’re doing this role, you know, you want somebody who can fully understand your wishes, and respect what you want to achieve, and they have to be able to communicate well with their beneficiaries.
Sarah Widmeyer 02:36
Yeah.
Brett Burke 02:36
So some of the traits you’d want in somebody is trustworthiness, you know, you’re gonna give them access to your private belongings, your assets, you want to make sure that they’re going to reflect your wishes as you put them in your will, and that they’re going to not try to improve their own position from doing that.
Sarah Widmeyer 03:17
Yeah
Brett Burke 03:17
You know, competency, you know, someone who’s organized, if they’ve, dealt with an estate before, that’s a plus, you want somebody who can make decisions. You don’t want somebody who’s unable to handle all that pressure. And then somebody who can, you know, who’s comfortable with financial people, or legal people, you know, if they’ve never dealt with accounts and lawyers, they may not be ideal.
Sarah Widmeyer 03:38
Yeah.
Brett Burke 03:38
Personality, you want somebody who can maintain harmony within the family,
Sarah Widmeyer 03:42
Yeah
Brett Burke 03:42
Someone who’s going to, you know, be neutral about everything and build relationships.
Sarah Widmeyer 03:47
Yeah.
Brett Burke 03:48
But one of the ones we find that we’re always surprised by is we’ve talked to clients about their wills. And they haven’t told the executor that they put them down…
Sarah Widmeyer 03:57
Oh
Brett Burke 03:57
in their will
Sarah Widmeyer 03:58
you’re kidding.
Brett Burke 03:58
No, so
Sarah Widmeyer 03:59
It’s a surprise?
Brett Burke 04:00
Yeah…!
Sarah Widmeyer 04:00
Oh my gosh
Brett Burke 04:01
And I’m like, that could be one of the worst things, you know, because people are dealing both with the grief, and then all that pressure of having to do something like that
Sarah Widmeyer 04:08
And then by the way.
Brett Burke 04:09
Yeah, so we always try and tell them, you know, you should speak to them and make sure they’re able, and they’re willing to do it. So, you know, the other thing we find is, you know, people have their parents who are elderly as their executor.
Sarah Widmeyer 04:19
Yeah
Brett Burke 04:19
And you know, they may not be in good health or able to carry that kind of stuff on
Sarah Widmeyer 04:24
Yeah. Which reminds me of a–another conversation that we had with a colleague of yours, Sean Hsu, where were we were talking about the importance of reviewing your will and reviewing the beneficiaries and your, your executor on a somewhat regular basis because of such a situation I guess, if you’ve named your parents and your parents are now elderly, and would just wouldn’t have the capacity
Brett Burke 04:48
Yeah, that makes sense.
Sarah Widmeyer 04:49
to take this sort of thing on.
Brett Burke 04:51
Yeah, a couple of other things we always ask ’em about is proximity,
Sarah Widmeyer 04:55
Yeah
Brett Burke 04:55
tax residency, you know,
Sarah Widmeyer 04:57
Yeah
Brett Burke 04:57
so we want to make sure that hopefully they live in the same geographic area as you because the first, you know, six weeks of dealing with an estate can be very time consuming.
Sarah Widmeyer 05:06
Yeah.
Brett Burke 05:07
So if somebody has to travel and live there, they’ll have to make those arrangements. You can’t do it all by phone or internet anymore.
Sarah Widmeyer 05:12
Yeah.
Brett Burke 05:13
And also, you don’t want to choose a US resident, because that can really complicate your estate matters.
Sarah Widmeyer 05:18
Oh wow. Okay, I didn’t know that. And then, if you are asked to be an executor, why should you consider it very carefully before saying yes?
Brett Burke 05:28
Well, I mean, one of the things that you want to consider, do you have the time and skills required? You know, are you dealing with assets that you’ve never really dealt with before? Is the person whose estate you’re dealing with? Is it got corporations in it? Has it got a business, you know, that’s… needs to be run? Is there rental properties? Is there possibly pets that need to be managed until other arrangements can be made? So you want to, you want to know the–how much time that you’re going to need to commit to it. And again, do you have the skills to deal with a complex estate?
Sarah Widmeyer 05:58
Yeah.
Brett Burke 05:58
Some of the things you’ll also want to know is, “what do they expect of you?” You know, and, th–there’s some things that are, uh, normal duties for an executor to go through, filing taxes and gathering info. But sometimes people want their ashes taken to another country, or they want a really large funeral, or, again, maybe you have to take care of some of the parts of their business, so what are your responsibilities
Sarah Widmeyer 06:19
Oh
Brett Burke 06:19
before you–you accept that role?
Sarah Widmeyer 06:21
So I didn’t even think about that. So if someone had put in their will that they wanted their ashes to be taken–to the ocean, that’s–that’s the job of the executor to do?
Brett Burke 06:31
Well, it could be the job of the executor, or they may have to just help organize it around the family and make sure there’s money available for it, but it really
Brett Burke 06:38
depends on who, you know, sometimes there isn’t anybody left but the executor.
Sarah Widmeyer 06:38
Yeah
Sarah Widmeyer 06:42
Huh
Brett Burke 06:43
So it may just be something that you have to consider when you’re whatever jobs they’re asking you to do.
Brett Burke 06:48
You know, the other thing you’re gonna want to do is, as you mentioned, isn’t an honor. And on a lot of times, it starts as an honor to do it, but it can become a burden. As you’ve pointed out, you’re doing this for your, your mother with your brother helping you, and so you have a connection to that, but that’s not always the way it is for people, and
Sarah Widmeyer 06:48
Hmm
Sarah Widmeyer 07:06
Yeah
Brett Burke 07:06
a year and a half is a long time to be dealing with a simple estate
Sarah Widmeyer 07:10
w–with a simple estate
Brett Burke 07:11
It’s not unusual anymore.
Sarah Widmeyer 07:11
Yeah. Well, and I think it’s partly also because it you know, you talked about the time that it takes. My brother is um, you know, a young father, he’s got two young children are really involved in sports, and he’s got an active busy career as do I, and so finding time to do this is been really challenging for both of us, and then you know, you have to do it at the same time, so something as easy as, or as simple as uh, mom has a safety deposit box… So we’re pretty sure we know what’s in that safety deposit box, because we were there while she was still with us and we we looked at it and it was just some papers and–but the bank requires both Joel and I to be at the bank at the same time to open up the safety deposit. So that safety deposit box is in Waterloo. I’m not in Waterloo that often anymore, so it, you know, it is (gasps) yeah, it’s these little niggly things that we have to finish off in order to finish off the estate is, something definitely to be considered.
Brett Burke 07:12
Yeah, no, anytime you’re having to work joint with a sibling or somebody else. Again, it’s coordinating schedules with busy lives, and then it’s also personality sometimes, I’m not saying that in your case, but
Sarah Widmeyer 08:26
Yeah
Brett Burke 08:26
It can be if you have, you know, children that don’t really
Sarah Widmeyer 08:29
Yeah
Brett Burke 08:29
have great conversations.
Sarah Widmeyer 08:30
Yeah
Brett Burke 08:31
It can be very difficult.
Sarah Widmeyer 08:32
Yeah, thankfully, if in case my brother’s listening, thank you. Thankfully, we don’t have that problem (laughs). We get along great (laughs more). So being named an executor involves, you know, we’re just talking about a great deal of time, work and legal paperwork, what are some of the tasks and associated timelines for administering an estate?
Brett Burke 08:52
Yeah, within the first few days are usually the busiest, you know, you have to safeguard the property, you know, make sure you go in and change the locks. I–I’ve talked to trustees before, and they’ve gotten to the house 12 hours, 24 hours after they’ve been notified about the death, and relatives are already removing some of the property
Sarah Widmeyer 09:11
Oh Jesus…
Brett Burke 09:11
or giving it away to neighbours or things
Sarah Widmeyer 09:13
Oh jeez.
Brett Burke 09:13
like that. So you know, you need to go in and you want to look at the insurance on the property and update it.
Sarah Widmeyer 09:18
Yeah
Brett Burke 09:18
Make sure it’s enforced in case there’s anything (that) happened
Sarah Widmeyer 09:21
Yeah
Brett Burke 09:21
because you’re responsible now,
Sarah Widmeyer 09:23
Yeah
Brett Burke 09:23
discard perishables, so you want to go through the fridge if there’s any plants inside the house, you know, you want to make sure all those are gone. And again, if there’s pets and sometimes even dependents that you have to make arrangements for. So in the first few days, it’s really busy. After that, within a month, you know, we talked about notifying people in agency, so whether they were employed, you’d have to talk to their employer or possibly their pension administrator. You’d want to talk to the people at CPP and Old Age Security, social insurance number, their passport, so all those have to be contacted. Looking at–after safety deposit boxes, and even nowadays, storage sheds,
Sarah Widmeyer 09:59
their passport! I didn’t even think of that one.
Brett Burke 10:01
Yeah
Sarah Widmeyer 10:01
I gotta add that one to the list.
Brett Burke 10:03
Yeah
Sarah Widmeyer 10:03
So, so passport, why?
Brett Burke 10:05
Um, so it’s canceled, so nobody can try
Sarah Widmeyer 10:08
So no one can try
Brett Burke 10:08
and, set up set up a new passport
Sarah Widmeyer 10:10
Oh
Brett Burke 10:10
under that with. There’s so much.
Sarah Widmeyer 10:12
Ah, there’s another one (laughs nervously)
Brett Burke 10:13
fraud going on nowadays that it’s easy to steal identity.
Sarah Widmeyer 10:16
Yeah,
Brett Burke 10:16
Or easier.
Sarah Widmeyer 10:17
Wow. Wow
Brett Burke 10:19
Yeah, we talked about canceling the credit cards but you know, before you cancel it, you also want to make sure… was there any balance insurance that might be able to apply to it? So, and then one of the biggest things we tell people is talk to their lawyer, talk to their accountant, you know, speak to whoever’s close to them. And then you should be verifying and recording everything you’re doing as the executor to protect yourself.
Sarah Widmeyer 10:39
So you’ve mentioned this a couple times, is there a legal liability that the executor has that should be considered before saying “Yes, I’ll do it”?
Brett Burke 10:47
Yeah, I mean, there’s a number of areas where you can fall into trouble. If you give away the assets before you check to see if there’s any creditors or if the CRA owe–is owed any money, or if there’s a dependent’s claim, and you’ve given away assets before that, and now you can’t satisfy it, so you can be in trouble for that. If you were to not file taxes on time, or you don’t use all the different areas of the tax. If you incur penalties or interest on it, then you can be held personally liable for that.
Sarah Widmeyer 10:47
Really…?
Brett Burke 10:49
And–and if you assign a duty to somebody else, and then you don’t follow up on it, it’s not their fault, you, they don’t have a fiduciary duty, you do as the executor.
Sarah Widmeyer 11:26
Okay
Brett Burke 11:26
So there’s a number of areas, you, you have to be careful and you want to make sure.
Sarah Widmeyer 11:30
And for all this work, do executors get paid for doing this work? Is there a–something that’s allowed to be paid to executors?
Brett Burke 11:39
Yeah absolutely. So in most of the Commonwealth provinces in Canada, you’re allowed to be compensated for your time and effort up to about 5% of the assets that are received. So that means when you’re the executor, you’re receiving this property into your care. So if there was a house worth $900,000, and income of $100,000, that’s a million dollars. So potentially, as an executor, you could be paid $50,000 on that up to 5%. But there’s a lot of things that go into making that decision on how much you’ll get paid.
Sarah Widmeyer 12:12
Yeah, I would think about, you know, the complexity.
Brett Burke 12:15
Exactly.
Sarah Widmeyer 12:16
And, and
Brett Burke 12:16
time, complexity,
Sarah Widmeyer 12:18
time
Brett Burke 12:18
skill needed.
Sarah Widmeyer 12:18
Yeah
Brett Burke 12:19
It’s also if you have a lot of complaints while you’re administering/distributing estates–if there’s a lot of complaints from the beneficiaries, or CRA or things like that, that can work against you as far as how much you’re gonna get paid, and the executor of money is also taxable, which is something a lot of people don’t recognize,
Sarah Widmeyer 12:35
Oh, so if they were paid $50,000, that $50,000 is of income.
Brett Burke 12:40
Exactly.
Sarah Widmeyer 12:41
Oh, interesting. Okay. It’s um, probably a topic, because it’s a big one for another podcast is um estate litigation is one of the fastest, sadly, fastest rising areas of litigation, primarily with beneficiaries.
Brett Burke 12:59
Yeah
Sarah Widmeyer 13:00
So yeah, it is a very serious honour that is being asked of you. And in definitely things that need to be thought about very carefully. Anything else you can do to protect yourself?
Sarah Widmeyer 13:13
Oh
Brett Burke 13:13
So
Sarah Widmeyer 13:13
Didn’t know there was such a thing.
Brett Burke 13:14
Yeah, if you’re ever getting a will done most, ugh, estate planning lawyers or family lawyers will have contact information for that. And even if you’re doing a will, if you’re a–starting to do an estate now, you can actually buy executor insurance, and you can charge it to the estate,
Sarah Widmeyer 13:53
Almost like an errors and omissions
Brett Burke 13:55
Yeah
Sarah Widmeyer 13:55
insurance.
Brett Burke 13:56
Yep, absolutely. And then one of the biggest ones we always talked about is communicate clearly and frequently with the beneficiaries to avoid concerns and conflict.
Sarah Widmeyer 14:04
Yeah
Brett Burke 14:04
And you got to speak to all the beneficiaries, not just the ones you like.
Sarah Widmeyer 14:07
(Laughs) Yes, that’s an important consideration as well. Yeah. Yeah, that’s a lot. So switching gears a little bit thinking about extensive digital online presence, um, most of us have it. We live our lives out loud, we live it out there in the universe. Some of these digital assets could have potential financial value. And if they’re not dealt with properly, they could be susceptible to fraud or hacking. So, you know, again, thinking about your role as an executor, how should an executor approach managing an estate’s digital property?
Brett Burke 14:09
Yeah, great question. And it’s more topical now than it was 10 years ago then.
Sarah Widmeyer 14:17
Yeah I bet. Yeah.
Brett Burke 14:17
People just didn’t think about this and digital covers a lot of areas covers even bank accounts that you deal with online and
Brett Burke 14:59
Not just Facebook and things like that, you have to consider what the person who’s died, what they want to happen to their digital assets, so do they want it to be all closed down as soon as they die, or do they want some of it to carry on as kind of a memory for friends and family? But also the websites have rules around what happens to that. And a lot of times, that is the final say on whether they can keep them active or they would be closed down on the death. The-the good thing is, you know, a lot of the websites don’t allow you to share passwords, but the good thing is you don’t need the password more often than not. If you are the executor of the estate or close family member, you can contact a web administrator and have them either, uh, disperse the assets.
Sarah Widmeyer 14:59
Okay
Sarah Widmeyer 15:44
Yeah.
Brett Burke 15:44
Or you can have uh, the–the system close it down or you can become an administrator of it. But you can’t really log on as if you’re that person anymore.
Sarah Widmeyer 15:53
Okay.
Brett Burke 15:54
Yeah, so like Air Miles, for instance, you know
Sarah Widmeyer 15:56
Gosh, Air Miles, yeah of course
Brett Burke 15:58
if somebody who passes away was a collector of air miles
Sarah Widmeyer 16:00
Yeah
Brett Burke 16:00
and a lot of Canadians are…
Sarah Widmeyer 16:01
There’s a financial value to that
Brett Burke 16:03
There is and that’s what you–you brought up that there could be a monetary value, and if you’re looking to move those miles to a single or other beneficiary, or multiple beneficiaries, they actually have a form called the air miles estate matters form.
Sarah Widmeyer 16:17
Hmm
Brett Burke 16:17
And you would go in there and put in their information and put in the collector numbers that you want to transfer the points to. But then you have to send in documents like the death certificate from the provincial government or statement of death from the funeral home. If there’s more than 20,000 Air Miles, then you actually have to provide them with uh–letters of probate.
Sarah Widmeyer 16:35
Ohhh my god…
Brett Burke 16:35
Yeah, so,
Sarah Widmeyer 16:37
wow.
Brett Burke 16:38
And–and same as if you go to the bank, if it’s a small amount, you can probably get it if you have a large amount you need to probate.
Sarah Widmeyer 16:43
Yeah,
Sarah Widmeyer 16:43
These are things we didn’t have to consider, you know, with my mum, she, she passed when she was 83, and she had been failing, so not a lot of travel and not uh, not a big online social media presence.
Brett Burke 16:44
Yeah
Brett Burke 16:44
Yeah
Sarah Widmeyer 16:58
But certainly, you know, you think about younger adults who pass away maybe tragically early for one reason or another, and they would have all of that.
Brett Burke 17:06
Yeah, and Google has different ways to go in. Because there are,
Sarah Widmeyer 17:10
yeah,
Brett Burke 17:10
surprise to myself. There are monetary values in some Google products, or Google Sites.
Sarah Widmeyer 17:16
Wow
Brett Burke 17:16
So you can go in and ask for that. Or you can just go in and close it down. Or you can ask for data from there. But they won’t let you take over the account.
Sarah Widmeyer 17:23
Yeah. Interesting, interesting.
Sarah Widmeyer 17:38
Thank you so much for sharing your thoughts with us today. This is really important information and important nuggets of consideration that people should really think about before they do take on the role of an executor, and not to say that people shouldn’t because it’s such an important role that people can take on and it can mean so much to a family’s loved ones or–or that person that you’re taking that responsibility on for. So is there anything else you’d like to share with us before we wrap up?
Brett Burke 18:07
One point is, I think if you’re looking at an estate, where it’s going to be fairly complex, or that you expect there could be some disputes between the beneficiaries is consider a corporate executor, you know, a Trust Company or something like that. The advantage of them is they have experience, they’re neutral to the distribution of the estate, and they’re unbiased towards the beneficiary. So hopefully, that would allow some harmony to keep going and there wouldn’t be anything being contested for too long.
Sarah Widmeyer 18:35
That’s a great recommendation. So that would be a trust company, either a national or a local trust could do this for you.
Brett Burke 18:42
Yeah, and sometimes, you know, accounting firms help themselves out that way or estate lawyers, but yeah, trust companies are the ones that I would look at first for that service.
Sarah Widmeyer 18:51
Okay. Wonderful. Thank you so much Brett for joining us today, and sharing your experience on the significant role that an executor plays in settling an estate. Being the executor of an estate can be a deeply rewarding experience. After all, you’re making such an impact on that person’s life and you’re making sure that your loved ones wishes are carried out exactly as they intended. But as we’ve learned today, it’s also important to understand the responsibilities involved and consider it very carefully before agreeing to take on this role. We can help guide you through the process with support and resources like checklists to make sure you’ve crossed everything off. You’re not alone. Conversations on Wealth is available wherever you get your podcasts. Remember to follow us on LinkedIn or Facebook for the latest on Wealth Strategies. Thank you all for listening. And join me again next time.
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