Tag: trust company

CANADA TRUSTEE: A COMPREHENSIVE GUIDE TO THE VARIOUS TYPES AND ROLES

Post author By Brandon Smith
Post date August 12, 2024

Canada trustee

Canada Trustee Introduction

As a Licensed Insolvency Trustee and Estate Trustee in Greater Toronto Ontario, Canada area, I have the honour of assisting individuals and families during some of the most challenging periods of their lives. Whether addressing personal bankruptcy, facilitating corporate restructuring, or managing the administration of a loved one’s estate, my role as a Canada Trustee is to offer services to individuals and businesses with debt problems through professional guidance, support, and expertise. My objective is to help clients navigate these complexities, achieve their goals, and confidently move forward.

But despite the importance of professional trustees in these situations, many people are unclear about what a licensed trustee does, trustee duties or the different types of trustees in Canada. Many Canadians are unaware of the role of a Licensed Insolvency Trustee, or that they may need one in the event of financial difficulties.

In this comprehensive guide, we’ll explore the various types of Canada trustees, including Licensed Insolvency Trustees (formerly called bankruptcy trustees), Estate Trustees, and others. We’ll delve into the roles and responsibilities of each, and provide examples of the types of cases they handle. Whether you’re an individual seeking guidance on personal bankruptcy, a business owner facing financial difficulties, or a grieving family trying to navigate the complexities of estate administration, this guide is designed to provide you with a clear understanding of the different types of trustees and their roles in the Canadian legal system.

A Brief Overview of the Role of a Canada Trustee

A Canada trustee is a qualified professional tasked with the management and administration of assets on behalf of individuals or entities that are unable to oversee their financial affairs. This role encompasses a variety of situations, including assisting individuals facing financial difficulties who seek to eliminate and restructure their debts through one of the available debt relief options such as a consumer proposal or bankruptcy. Additionally, Canada trustees may manage the estates of deceased persons or oversee the winding up of companies.

The role of a Canada trustee is to serve as an impartial third party responsible for the following duties:

Managing the assets of the individual or entity.
Distributing assets following the terms outlined in a court order from a legal process or agreement.
Ensuring that all debts and obligations are settled in compliance with applicable laws.
Offering guidance and support to the individual or entity to assist them in achieving their objectives.
Canada trustee

Importance of Understanding The Different Types and Responsibilities of Canada Trustees

There are different types of Canada trustees, the main ones being:

Licensed Insolvency Trustee (LIT): A LIT is a professional specializing in bankruptcy and insolvency matters. A LIT is licensed by the Canadian government and is the only professional authorized to administer bankruptcies, proposals, and receiverships in Canada.
Estate Trustee: An Estate Trustee, sometimes referred to as an Executor or Executrix, is an individual, firm, or trust company designated to oversee the estate of someone who has passed away. This role can be assigned through a will or for a complicated estate where there is no will or the named estate trustee does not wish to act, they can be appointed by a court. The Estate Trustee’s main responsibility is to manage the estate’s assets and ensure they are distributed according to the deceased person’s wishes outlined in the will or, if there is no will, according to the laws governing inheritance.
Trustee for Children: A Trustee for Children is a professional who manages the assets of a minor child, usually in the context of trust funds or an estate.
Office of the Public Guardian and Trustee (PGT): A Trustee for the PGT is responsible for managing the assets and affairs of individuals who cannot manage their affairs, such as those with mental or physical disabilities.
Corporate trustees: A corporate trustee in Canada plays a crucial role in managing and administering trusts, ensuring that the trust’s objectives are met, and the beneficiaries’ interests are protected. The role and responsibilities of a corporate trustee in Canada typically include trust administration, investment management, tax compliance and beneficiary relations and management.

Qualifications for Canada Trustees

Licensed Insolvency Trustee

The Office of the Superintendent of Bankruptcy Canada (OSB) possesses the sole authority to issue licenses to Licensed Insolvency Trustees under the Bankruptcy and Insolvency Act (Canada) (BIA). Before granting a license, the Superintendent must ensure that candidates fulfill specific qualifications as outlined in the OSB’s Directive No. 13R8, Trustee Licensing.

Candidates must, for instance:

Demonstrate good character and reputation.
Maintain solvency.
Complete the Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP), as well as the CIRP National Insolvency Exam and either the Insolvency Counsellor’s Qualification Course or the Practical Course on Insolvency Counselling.
Pass an Oral Board Examination.

The OSB is a federal government agency so the licensing is therefore a federal matter.

Estate Trustee

In Canada, Estate Trustees who are appointed to manage the estates of deceased persons fall under the jurisdiction of the provinces and territories. The qualifications for an Estate Trustee in Canada vary depending on the province or territory, but generally, an individual should have the following qualifications:

- Be at least 18 years old, as per the laws of the province or territory.
- Have the mental capacity to manage the estate, as determined by a court or a medical professional.
- Be a resident of the province or territory where the estate is located, or have a connection to the estate or the deceased.
- Be a person of good character, integrity, and reputation.
- Have some knowledge of estate administration, inheritance, and probate law.
- Have experience in managing finances, accounting, or business, which can be beneficial in managing the estate.
- Be able to manage the estate’s assets, debts, and liabilities.
- Be able to prepare and file tax returns, as required.
- Be able to resolve disputes and conflicts that may arise during the estate administration process.
- Be able to maintain confidentiality and professional discretion when dealing with sensitive information.

When we act as Estate Trustees, we seek court approval for our appointment.

Note that some provinces or territories may have additional or different requirements for Estate Trustees. It is essential to check the specific laws and regulations in the province or territory where the estate is located.

Trustee for Children

If someone is going to be a Trustee for Children, there are certain qualifications and requirements they must meet. In Canada, a Trustee for Children is typically a person appointed to manage a trust that benefits children, such as a testamentary trust or a living trust. As a Trustee for Children operates under provincial law, like an Estate Trustee, the qualifications may vary depending on the province or territory.

Generally, the qualifications to act as a Trustee for Children are just like that of an Estate Trustee.

Office of the Public Guardian and Trustee (PGT)

The PGT is licensed and registered with their respective provincial government, and its staff are authorized to act as Public Guardians and Trustees. The PGT is a provincial government agency that provides protection and support to vulnerable individuals, including those with cognitive impairments, mental health issues, or other disabilities.

Staff members have experience working in the fields of law, finance, social work, or healthcare. Some staff members have experience working with vulnerable populations, such as seniors, individuals with disabilities, or those with mental health issues. The PGT staff also have university and other professional designations as well as experience to allow them to oversee their work.

If there is insufficient staff to handle a certain aspect of PGT work, they can outsource it to a law firm or accounting firm.

Corporate trustees

A corporate trustee in Canada is subject to provincial laws and supervision. Corporate trustees are a company or organization that is licensed to act as a trustee for trusts, estates, and other financial arrangements. The necessary qualifications for a corporate trustee in Canada vary depending on the province or territory, but generally, a corporate trustee should meet the provincial licensing requirements and obtain its license, in Ontario, from the relevant regulatory body, such as the Office of the Superintendent of Financial Institutions (OSFI) or the Financial Services Commission of Ontario (FSCO).

The staff at the corporate trustee administering the funds will generally have professional designations such as CPA or LLB/J.D. and have relevant experience.

Canada Trustee Obligations

In Canada, Trustees have several obligations to fulfill in their role as fiduciaries. These obligations are outlined in relevant provincial and federal legislation. Examples for Ontario are the Trustee Act, R.S.O. 1990, c. T.23, the Succession Law Reform Act, R.S.O. 1990, c. S.26, the Estates Act, R.S.O. 1990, c. E.21 and the Estates Administration Act, R.S.O. 1990, c. E.22 .

Some of the key obligations of Canada Trustees that are common to all include:

Duty of Loyalty: Trustees must act in the best interests of the beneficiaries and not in their interests.
Duty of Care: Trustees must follow accepted standards of practice and exercise the care, diligence, and skill that a prudent person would exercise in similar circumstances.
Duty of Confidentiality: Trustees must maintain the confidentiality of the trust and its affairs.
Duty to Act in Good Faith: A Canada trustee must act in good faith and with honesty in all their dealings with the trust and its beneficiaries.
Duty to Keep Accurate Records: Trustees must keep accurate and up-to-date records of the trust’s assets, liabilities, income, and expenses.
Duty to File Tax Returns: Trustees must file tax returns on behalf of the trust and pay any taxes owed.
Duty to Manage Trust Assets: Trustees must manage the trust’s assets prudently and follow the terms of the trust.
Duty to Make Decisions: Trustees must make decisions in the best interests of the beneficiaries and under the terms of the trust.
Duty to Report: Trustees must report to the beneficiaries and other interested parties on the status of the trust and its affairs.
Duty to Comply with Laws and Regulations: Trustees must comply with all relevant laws and regulations, including tax laws, securities laws, and other regulatory requirements.
Duty to Act Independently: Trustees must act independently and impartially in their decision-making and not be influenced by personal interests or biases.
Duty to Keep Beneficiaries Informed: Canada trustees must keep beneficiaries informed of the trust’s activities and any changes to the trust’s terms or administration.
Duty to Protect Trust Assets: Trustees must take reasonable steps to protect the trust’s assets from loss, damage, or theft.
Duty to Ensure Compliance with Trust Terms: Trustees must ensure that the trust is administered under the terms of the trust and any applicable laws and regulations.
Duty to Account for Trust Assets: Trustees must account for the trust’s assets and provide an accurate and detailed accounting of the trust’s activities and financial transactions.

Selecting and Working with a Canada Trustee

Factors to Consider

Selecting the right trustee can be a complicated task. Here are some important factors to think about:

Canada Trustee Qualifications: What qualifications and experience does the trustee have? Are they licensed and certified?
Trustee Reputation: What is the trustee’s reputation in the industry? Do they have a good track record of managing trusts and estates?
Trustee Fees: What are the trustee’s fees and costs? Are they reasonable and transparent?
Trustee Independence: Is the trustee independent and impartial, or do they have a conflict of interest?
Trustee Communication: How will the trustee communicate with you and other stakeholders? Are they responsive and transparent?
Trustee Expertise: Does the trustee have the necessary wide range of expertise and knowledge to manage your specific trust or estate?
Canada Trustee Capacity: Does the trustee have the capacity to manage your trust or estate? Are they able to handle the complexity and scope of the trust or estate?
Trustee Conflict of Interest: Does the trustee have a conflict of interest that could impact their ability to act in your best interests?
Trustee Liability: Is the trustee liable for any mistakes or errors they make while managing your trust or estate?
Trustee Succession: What happens if the trustee is unable to continue serving as the trustee? Is there a plan in place for succession?
Trustee Reporting: How will the trustee report to you and other stakeholders? Are they transparent and accountable?
Trustee Compliance: Does the trustee comply with all relevant laws and regulations? Are they up-to-date on changes to the law and regulations?
Trustee Dispute Resolution: How will disputes be resolved between the trustee and other stakeholders? Are there procedures in place for resolving disputes?
Trustee Termination: How can you terminate the trustee’s services if you are not satisfied with their performance?
Canada Trustee Replacement: How can you replace the trustee if they are unable to continue serving or if you are not satisfied with their performance?

By considering these issues, you can make an informed decision about choosing the right trustee for your needs. It’s essential to carefully evaluate the trustee’s qualifications, reputation, fees, and expertise to ensure that they are the right fit for your trust or estate.

Questions to Ask a Potential Canada Trustee

When selecting a potential Canada Trustee, it’s essential to ask the right questions to ensure that you’re making an informed decision. Here are some questions you should consider asking:

What is your experience in trust administration?
What is your expertise in the specific area of trust administration that I need (e.g. estate administration, tax planning, etc.)?
What is your approach to trust administration?
Do you have a specific philosophy or methodology that you follow?
How will you communicate with me and other stakeholders throughout the trust administration process?
What is your fee structure?
Are there any additional costs or expenses that I should be aware of?
What is your policy on conflicts of interest?
How do you handle situations where you may have a conflict of interest?
How do you ensure that you are acting in the best interests of the beneficiaries?
What is your process for managing and investing trust assets?
How do you handle disputes or disagreements between beneficiaries?
What is your policy on confidentiality and privacy?
How do you ensure that you are complying with all relevant laws and regulations?
What is your process for reporting to beneficiaries and other stakeholders?
What steps do you take if you’re no longer able to fulfill your role as trustee?
How do you address any errors or mistakes that might arise during the administration of the trust?
What is your approach to indemnification?
If any losses or damages occur during the trust administration, who is held accountable?
How do you ensure that you consistently provide excellent service to your clients?
What is your stance on receiving client feedback and handling complaints?
How do you keep yourself informed about changes in laws and regulations that impact
trust administration?
What is your commitment to ongoing education and professional development?

By asking these questions, you can get a clearer picture of a potential trustee’s qualifications, experience, and how they handle trust administration. This will help you decide if they’re a good match for your needs.

Canada Trustee FAQ

FAQs about LITs in Canada

1. What is a bankruptcy trustee?

A bankruptcy trustee, also known as a LIT, is a professional licensed by the Government of Canada to administer bankruptcies and consumer proposals. They help individuals navigate the bankruptcy process, ensuring compliance with the Bankruptcy and Insolvency Act and managing assets held in trust.

2. What are the main duties of a LIT?

The main duties of a LIT include:

Assessing an individual’s financial situation and providing advice on debt relief options, including bankruptcy and consumer proposals.
Administering the bankruptcy or consumer proposal process and ensuring compliance with legal requirements.
Distributing any assets to creditors as per the regulations.
Representing the interests of creditors and ensuring fairness in the process.

3. How do I find a LIT in Canada?

You can find a LIT by searching the Government of Canada’s searchable database of LITs. Additionally, local non-profit credit counselling organizations can provide referrals to reputable trustees. Please stay away from debt consultants.

4. What should I expect during a consultation with a LIT?

During a consultation, a LIT will review your financial situation, explain your debt relief options, and guide you through the bankruptcy or consumer proposal process. They will provide information about the implications of filing for bankruptcy and help you understand your rights and responsibilities.

5. Do I need a lawyer to file for bankruptcy in Canada?

No, in Canada, you do not need a lawyer to file for bankruptcy. You can file directly with a licensed trustee, who will guide you through the process. However, in certain complex cases, it may be beneficial to seek legal advice.

6. What are the costs associated with hiring a LIT?

The costs of hiring a LIT can vary depending on the complexity of your case. Generally, the fees are regulated and typically deducted from the funds collected from your assets during the bankruptcy process. Initial consultations are often free.

7. Can a LIT help with debt consolidation?

Yes, a bankruptcy trustee can provide advice on debt consolidation options and assist you in determining whether it is a viable solution for your financial situation. They consider all available debt relief options, not just bankruptcy.

8. What happens if a trustee does not perform their duties properly?

If a trustee fails to perform their duties as required by law, they may face disciplinary action from the OSB. This can include fines, suspension, or revocation of their license. If you have concerns about a trustee’s performance, you should report it to the appropriate regulatory body.

9. Can I file for bankruptcy more than once?

Yes, you can file for bankruptcy more than once in Canada. However, the implications and the length of time you must wait between filings depend on the circumstances of your financial situation and the previous bankruptcy discharge.

10. How long does the bankruptcy process take?

The bankruptcy process can vary in duration depending on individual circumstances, such as the complexity of the case and the debtor’s compliance with requirements. Typically, a straightforward first-time bankruptcy with no surplus income obligations can take about 9 months for the bankrupt person to receive their discharge.

FAQs about *Estate Trustee**s in Canada*

In acting as an Estate Trustee in the Province of Ontario, I encounter various questions from clients, family members, or beneficiaries. Here are some frequently asked questions about an Estate Trustee in the Province of Ontario, along with their answers:

1. What is the role of an Estate Trustee?

The Estate Trustee, commonly referred to as the executor, holds the responsibility of administering and distributing the estate of the deceased following the provisions outlined in the will. Their responsibilities encompass organizing the funeral, identifying and appraising assets, applying for probate, settling outstanding debts and tax obligations, and distributing the estate to the designated beneficiaries.

2. Who can be an Estate Trustee?

An Estate Trustee must be an adult who possesses the capacity to manage the associated responsibilities effectively. Suitable candidates may include a trusted family member, a close friend, or a qualified professional, such as an attorney or accountant. It is recommended to select an individual who demonstrates strong organizational skills, financial acumen, and a likelihood of longevity.

3. Do Estate Trustees get paid for their work?

Yes, Estate Trustees are entitled to reasonable compensation for their services, which can be specified in the will or determined by the trust law. The compensation may be a percentage of the estate’s value or based on the time and effort expended.

4. What happens if the Estate Trustee fails to perform their duties?

If an estate trustee doesn’t meet their obligations, the beneficiaries have the option to ask the court to remove the trustee and appoint someone else. Additionally, the original trustee could be held financially accountable for any losses that result from their negligence.

5. How do I choose an Estate Trustee?

When choosing an Estate Trustee, consider a trustworthy adult who will likely live longer than you, someone organized and knowledgeable about finances, and preferably someone who resides in Ontario. It’s also wise to discuss the role with them before naming them in your will.

6. Can I appoint more than one Estate Trustee?

Yes, you can appoint co-executors or multiple Estate Trustees to share the responsibilities. However, keep in mind that this may complicate the process since they will need to work together and make decisions collectively.

7. What qualifications should an Estate Trustee have?

While there are no formal qualifications required, an Estate Trustee should possess strong organizational skills, financial knowledge, and the ability to communicate effectively with beneficiaries and other involved parties.

8. What is probate, and does every estate need to go through it?

Probate is the legal procedure that involves confirming a will and giving the Estate Trustee the power to manage and distribute the estate. However, not all estates need to go through probate. Smaller or simpler estates might be exempt based on specific criteria.

9. What if there is no will?

If an individual passes away without a will, known as dying intestate, the distribution of their estate will follow the intestacy laws of Ontario. Under these laws, the court may appoint an Estate Trustee to oversee the management of the estate. When our firm assumes the role of Estate Trustee, this appointment is formalized through a court order.

10. How long does the role of Estate Trustee last?

The tenure of an Estate Trustee can vary considerably based on the complexity of the estate, typically ranging from several months to several years. This role entails numerous responsibilities, including the distribution of assets, which can be a time-intensive process.

The appointment of an Estate Trustee is a significant decision that necessitates careful consideration. A thorough understanding of the duties, rights, and obligations associated with this role can enhance the efficiency of the estate administration process.

Canada Trustee Conclusion

In conclusion, understanding the various types of Canada trustees is essential for anyone navigating the complexities of personal bankruptcy, estate administration, or corporate financial challenges. From Licensed Insolvency Trustees to Estate Trustees, each plays a critical role in providing support and guidance through difficult times. By familiarizing yourself with their responsibilities and the specific cases they handle, you can make informed decisions that align with your circumstances.

Whether you are dealing with financial distress or managing a loved one’s estate, this comprehensive guide aims to equip you with the knowledge needed to approach these situations with confidence and clarity. As you move forward, remember that seeking professional advice is a key step toward achieving the best possible outcomes in your financial and legal matters.

I hope you enjoyed this Canada Trustee Brandon’s Blog. Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or someone with too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation. We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

The information provided in this Brandon’s Blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content of this Brandon’s Blog should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc. as well as any contributors to this Brandon’s Blog, do not assume any liability for any loss or damage resulting from reliance on the information provided herein.

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Brandon Blog Post

WHY CHOOSING THE EXECUTOR OF THE WILL CAN BE SO INTENSE: NECESSARY INGREDIENTS FOR CHOOSING THE RIGHT EXECUTOR

Post author By Brandon Smith
Post date March 31, 2021

We hope that you and your family are safe, healthy and secure during this coronavirus pandemic.

Smith Estate Trustee Ontario and Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Choice of an executor of the Will: Choosing the right executor for your estate

When a person dies, that is not the time to begin preparing for who will carry out the wishes of the dead person in connection with their assets. Without a properly drafted Will, your family could be in for a long and uncomfortable legal battle. This is why it is so essential to obtain the right advice early on and naming the appropriate person or persons as the executor of the Will.

Whether you’re single, married, or have a blended family, there’s a good chance that you will certainly need to select an executor of the Will of your estate. This is the person who will supervise accomplishing your desires after you die. The executor will make certain your wishes are accomplished in such a way that is fair to your heirs under Ontario laws. However, without proper paperwork, this may not go as efficiently as you may really hope. To avoid this, you need to carefully think about and then pick who or whom should be your executor(s).

Who can be an executor of the Will in Ontario?

Have you ever heard of the term “executor”? You will come across it when you or a loved one create a Will. In Ontario, the executor is now called an Estate Trustee. However, in this Brandon Blog, I will continue to use the old name. It is normal that one of your closest friends or family members will be named in your Will as an executor, meaning they’re responsible for carrying out the instructions in your Will.

There are really no requirements in Ontario for someone to be an executor of the Will. To be an executor of someone’s Will, you must be at least 18 years old and have the ability to comprehend what is expected of you in that role. Hopefully, the person or people selected also have no record of fraud!

The executor is essentially the person holding the purse strings when it comes to your estate. They’re to see the will through from beginning to end: paying off bills, selling off any excess belongings, and distributing the rest to your beneficiaries.

The role of executor is an extremely important fiduciary role. Performing the duties of an executor of the Will incorrectly can have a profoundly serious effect on the beneficiaries and families involved for generations to come. So by now, it should be obvious to you that not everyone who can be an executor should be chosen to be THE executor. Having the right executor best suited for your estate should be the cornerstone of estate planning.

Choosing the ideal executor of the Will for your estate

The best estate trustee for your estate will depend upon the complexity of your estate, your specific wishes and needs. You and your lawyer ought to think about several elements when choosing an executor, consisting of:

Given your assets and beneficiaries, what skills should the executor possess and how active will their involvement be in the estate?
Whether they will need to make financial decisions.
Do they have the necessary skill set and financial acumen to properly administer your estate?
Whether they have a good and trusted relationship with your heir and with various other relatives.
Do they have good conflict-resolution skills?

You also must be mindful as to how normal life events may have changed your needs when considering an executor of the Will. The person or people you chose under your first Will when your family was young and your biggest asset might have been the proceeds under your life insurance policy may no longer be the right choice years later when your children have their own families and your estate assets look much different. Complex estates also require executors to have different skill sets than what is needed to administer simpler estates.

The executor of the Will: Consider people in good financial standing

Becoming a good executor of the will requires time and effort. To act as executor means you will have legal responsibilities and you’ll be making crucial choices regarding the deceased’s properties, including:

Paying off debts.
Taking the estate through probate and calculating and paying the Ontario probate fees called the Estate Administration Tax.
Completing one or more income tax returns that the deceased may have not filed and paying the taxes.
Managing and perhaps selling assets such as real estate.
Distributing assets to beneficiaries.
Filing the estate tax returns and paying the necessary tax.

You will want to make sure that whoever you pick as executor under the Will, will be able to properly administer your estate through the entire estate administration process.

So as a starting point, you will want to make sure that the estate trustee that you pick as your personal representative who will be dealing with your personal finances, should be someone trustworthy who has both the necessary skills to handle the financial matters and has a good financial standing. In Ontario, an undischarged bankrupt cannot be an estate trustee.

How much power does an executor of the Will have over the estate?

An executor of the Will is a person who has been named to administer an estate when someone dies, but what does that involve? The executor’s responsibilities include:

making sure that funeral arrangements have been properly made and funeral costs are paid;
gathering up important documents;
getting official copies of the death certificate;
paying off any debts;
wrapping up any loose ends like liaising with government agencies;
gathering up the funds and then closing out the deceased’s bank accounts; and
figuring out how to handle any property.

In other words, an executor has a lot of responsibility and a lot of power. So much power that an executor may be required to post a bond with the province of Ontario to cover any potential losses.

It’s a common misconception that the executor of an estate has complete control over the assets and can freely distribute them to whomever they choose. In reality, that’s not the case. When someone passes away, their estate becomes a separate legal entity, and once the executor has finished settling the estate’s affairs, the estate’s assets must pass to the designated beneficiaries. However, the executor has many powers that can help them better manage the estate.

The powers of an executor of the Will, come from the wording of the Will. If the executor finds that they do not have sufficient powers to properly carry out their duties, then the executor would have to retain a lawyer, get legal advice and then make an application to the court to get those additional powers. Since an executor has personal liability, they should not overstep their authority by taking actions they do not have the power to under the Will.

How do I make sure an executor of the Will is honest?

Succession preparation includes the estate planning documents. As part of that process, there needs to be a properly thought out procedure of picking a proficient, responsible, and trustworthy individual to handle an estate, trust, or business, upon the death of the creator of that wealth.

It is extremely essential to have a detailed succession plan in your estate and to make certain that your executor recognizes his/her duty, has the necessary skills and is willing to carry out what they will be called upon to do.

A well-known saying is “you get what you pay for” which is more often true when it involves choosing your executor. The executor is the person responsible to execute the terms of a Will or Trust. If they are not up to the task, your estate can get involved in a great deal of trouble.

At the end of the day, you have hopefully chosen someone to be the executor of the Will that not only has the ability to perform all necessary tasks but also someone who out of respect for their relationship with you and your wishes will carry them out honestly and efficiently.

Can there be 2 executors of a Will?

There are numerous concerns that emerge when a loved one passes away. One that is usually asked is can there can be more than one executor of the Will? In short, yes, there can be more than one executor, but there are some instances when that may not be the very best course of action.

So what are the realistic options? There can be a sole executor, an alternate executor or co-executors. Each one has its pluses and minuses. As the name suggests, a sole executor is 1 person only who has full responsibility to take all the necessary actions involved in settling the estate and then turn the money or specifically designated property over to the beneficiaries.

What is and why have an alternate executor? Just because someone is named as an executor of the Will, it may be the case that when the time comes, the person named is either unwilling or unable to act. Perhaps the Will was drawn up one or two decades ago and now the circumstances of the named executor have changed. So just in case, an alternate executor can be named in case the primary executor cannot act.

The Ontario Trustee Act contemplated such a situation. Examples of reasons why the primary executor may be unwilling or unable to act are because they are now:

Having a change of heart and is now unwilling to act. An executor can recuse themselves before they start to take any action as executor. Once they start acting though, the only way they can be removed is through a court order.
Is now is unfit to act.
Predeceased the one who just died.
Have been convicted of an indictable offence.
An undischarged bankrupt or insolvent and trying to settle their debts under the Proposal provisions of the Bankruptcy and Insolvency Act (Canada).

Our sister business, Smith Estate Trustee Ontario, acts as a substitute executor when an executor of the Will needs to be replaced by the court.

In any of these situations, the alternate executor hopefully can and is still willing to act. The alternate executor would have the estate’s lawyer make an application to the court, provide proof for the reason why the named executor cannot act and the court can appoint the alternate executor (or any other party the beneficiaries may wish to nominate if proven that the alternate is unfit to act).

As the name implies, co-executors means that two or more people have been appointed to act together as an executor of the Will. This can help ensure that your estate is divided up as you intended and the co-executors can both split the work between them and also be a check on each other’s work.

They have someone they can confer with when unsure about something, rather than putting the estate to expense by consulting first with one of the professional advisors. The main disadvantage of having co-executors is that if you have an even number of executors and there is a major disagreement right down the middle, it will probably take the intervention of the court to have the decision made. This creates otherwise unnecessary cost and delay.

It is probably one of the most serious decisions in estate planning. Yu do not want to pick the wrong executor.

Choice of the executor of the Will: Using a trust company

Should you consider naming an estates professional as your executor? A trust company is such a professional executor. If you named an estate professional to oversee the distribution of your estate as executor, this approach typically results in less conflict and fewer disagreements between family members than naming a family member to be executor.

However, you should know that in naming an estate professional trust company, you are naming a corporate executor with well-established and unwavering policies and procedures to handle the estate administration process. The person at the trust company handling your relative’s estate is not going to care about the relationship issues between the beneficiaries and other family members.

They also are not going to worry about hurting someone’s feelings. The cost of using a trust company is cut and dry where a close friend or family member may waive any fee they may be entitled to as executor.

In some situations choosing a trust company as your corporate executor of the Will can be a smart option. A trust company is a company authorized to act as a trustee for a trust. The trust company is not the creator of the trust, nor is it the owner of the trust property.

The trust company is an independent third party, which is chosen by the now-deceased person to act as the executor of the Will. A trust company is an excellent choice as executor when the estate is very large and complex.

Whether one or more people or a trust company is a better choice to be the executor really depends on the size and complexity of the estate and the relationships of all the family members involved.

The executor of the Will summary

I hope you enjoyed the executor of the Will Brandon Blog post. If you are concerned because it is now time to act under the Will, but the named executor is unwilling or incapable of acting, that is where Smith Estate Trustee Ontario can be of assistance. We act as substitute trustees appointed by the court in such situations.

Have you been administering an estate and now you have determined that it is an insolvent estate? Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.