Opting out – Considerations for Executors prior to accepting the role
When clients come in to discuss Estate Planning, one of the first, and most important, considerations is whom you want to appoint as Executor to oversee your affairs upon your passing.
In broad strokes, the role, duties and responsibilities of an Executor include: arranging for the funeral, securing and appraising the assets of the deceased, applying for Probate (if necessary), paying any debts and taxes owed by the deceased, accounting to beneficiaries, and distributing the estate’s assets.
Most individuals name a family member or close friend to act as Executor in their Will. While not a requirement, it is also advisable to name one or more alternates in the event that your first choice is unable or unwilling to act.
At the time of planning your affairs, it is prudent to discuss the nomination with the prospective Executor, to ensure they are comfortable with taking on such a responsibility. Depending on the complexity and size of the Estate, significant time and resources may be required to fully administer and wind up an Estate.
One of the most common questions we are asked is whether the person named in a Will has to act if nominated by someone in a Will.
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The short answer is no.
If named in a Will to act as an Executor, the named party can renounce their appointment thus leaving the duties to the next named party (i.e.: the alternate). Should no alternate be named, the Court will appoint someone to act in the role in your stead. Note that someone renouncing their appointment should take caution to ensure they are documenting the renunciation properly. Notice must also be provided to each of the beneficiaries for the renunciation to be effective.
It is vital that Executors understand that once they agree to act (especially where probate has already been granted), an Executor cannot simply abandon his or her duties to an Estate- regardless of the reason. Many people erroneously believe that they can simply renounce their appointment if the administration of the estate becomes too time consuming or if there is a conflict or difference of opinion with a beneficiary over the affairs of the estate. At this point renunciation is no longer an option.
The only way an Executor can be released from his or her duties after agreeing to take on the role is to apply for a court order that removes him or her from their responsibilities- officially called a “Renunciation of Right to a Certificate of Appointment of Estate Trustee (or Succeeding Estate Trustee) With a Will”). This process can be long and complex and often requires the Executor who is seeking removal to provide the Court with a passing of accounts. It is also highly advisable that an Executor seeking to be removed also obtain from each beneficiary a release- as the removal order (if granted) does not serve as a waiver for the Executor’s liability to the Estate for actions he or she took while serving in the role.
The bottom line is that one needs to be comfortable with the duties and obligations of being an Executor before agreeing to act. If you are planning your affairs, or if you have been named as an Executor and would like to discuss your duties and responsibilities, give us a call to discuss. Time spent in the planning stages can save your Estate and prospective Executor(s) a great deal of time and stress down the road.