Selecting your Personal Representative (Executor)
In Alberta, the term "Personal Representative" is now used to describe the individual responsible for carrying out the wishes outlined in a Will. This term replaced "Executor" and "Executrix" in 2012, when Alberta introduced the Wills and Succession Act and the Estate Administration Act, which modernized estate legislation. A Personal Representative has the same duties and responsibilities as the former roles of Executor or Executrix, ensuring the Will is properly executed and the estate is administered according to the deceased’s wishes.
Choosing the Right Person: Key Considerations for a Critical Role
Selecting a Personal Representative is one of the most important decisions when drafting a Will. Many individuals underestimate the complexity of the role, which can lead to costly mistakes, unfulfilled wishes, or even legal liabilities. It’s highly recommended to consult a lawyer for personalized guidance.
Responsibilities of a Personal Representative
A Personal Representative’s duties can be extensive and include:
Risks and Common Errors
Personal Representatives can be held personally liable for errors. Common mistakes include:
Selecting the Right Candidate
When choosing a Personal Representative, consider the following questions:
Professional Personal Representatives
Professional Personal Representatives, such as trust companies, accountants, or lawyers, can be invaluable for complex estates. They bring expertise and continuity, ensuring the estate is managed efficiently and according to legal standards. If you prefer to name a family member or friend as your Personal Representative, they can still enlist a professional for support.
Compensation and ExpensesPersonal Representatives are entitled to reimbursement for reasonable out-of-pocket expenses incurred during estate administration, such as travel costs. Receipts are not always required but are recommended in case of disputes. They may also charge a fee for their time, which must be reasonable and is taxable as income. These fees should be discussed with the Personal Representative when drafting your Will and clearly outlined in the document to avoid misunderstandings.
Final Thoughts
Choosing a Personal Representative is a critical decision. Ensure your chosen representative has the skills, knowledge, and willingness to take on this significant responsibility. Alternatively, consider professional services to ease the burden and ensure your estate is handled with care and expertise.
Checklist for Personal Representatives in Alberta
Choosing the Right Person: Key Considerations for a Critical Role
Selecting a Personal Representative is one of the most important decisions when drafting a Will. Many individuals underestimate the complexity of the role, which can lead to costly mistakes, unfulfilled wishes, or even legal liabilities. It’s highly recommended to consult a lawyer for personalized guidance.
Responsibilities of a Personal Representative
A Personal Representative’s duties can be extensive and include:
- Arranging the funeral: Ensuring final arrangements align with the deceased's wishes.
- Obtaining necessary documentation: This includes death certificates, court approval, and, if required, probating the Will.
- Managing assets: Handling all assets, including real estate, financial accounts, and digital property.
- Settling liabilities: Paying debts, bills, and other obligations.
- Handling estate finances: Covering taxes, legal fees, and other expenses related to administering the estate.
- Maintaining records: Keeping detailed financial records of transactions and distributions.
- Engaging professionals: Hiring experts such as lawyers, accountants, or appraisers as needed.
- Fulfilling tax and legal requirements: Filing taxes and adhering to legal obligations for the deceased and the estate.
- Communicating with beneficiaries: Informing beneficiaries, addressing concerns, and distributing assets as outlined in the Will.
Risks and Common Errors
Personal Representatives can be held personally liable for errors. Common mistakes include:
- Failing to keep accurate records.
- Acting without proper authority (e.g., before obtaining probate).
- Mismanaging assets or distributing them incorrectly.
- Overlooking creditor claims or failing to inform beneficiaries.
- Co-mingling estate assets with personal assets.
- Missing deadlines for tax filings or other regulatory requirements.
- Failing to properly account to beneficiaries or obtain legal releases.
Selecting the Right Candidate
When choosing a Personal Representative, consider the following questions:
- Are they in the same jurisdiction as the estate? An out-of-province representative can add complexity.
- Are they likely to outlive you? Age and health are important considerations.
- Do they have the financial and legal knowledge needed to administer the estate?
- Can they dedicate the time required to fulfill their duties?
- Are they organized and good at record-keeping?
- Are they effective communicators who can manage relationships with multiple beneficiaries?
- Have you discussed the role and expectations, including compensation, with them?
- Are they prepared to accept the personal liability that comes with the role?
Professional Personal Representatives
Professional Personal Representatives, such as trust companies, accountants, or lawyers, can be invaluable for complex estates. They bring expertise and continuity, ensuring the estate is managed efficiently and according to legal standards. If you prefer to name a family member or friend as your Personal Representative, they can still enlist a professional for support.
Compensation and ExpensesPersonal Representatives are entitled to reimbursement for reasonable out-of-pocket expenses incurred during estate administration, such as travel costs. Receipts are not always required but are recommended in case of disputes. They may also charge a fee for their time, which must be reasonable and is taxable as income. These fees should be discussed with the Personal Representative when drafting your Will and clearly outlined in the document to avoid misunderstandings.
Final Thoughts
Choosing a Personal Representative is a critical decision. Ensure your chosen representative has the skills, knowledge, and willingness to take on this significant responsibility. Alternatively, consider professional services to ease the burden and ensure your estate is handled with care and expertise.
Checklist for Personal Representatives in Alberta
Resources from the 2022 Servus Credit Union Wealth Management Series:
| selecting_the_right_executor_and_trustee.pdf |
| corporate_executors.pdf |
