FEAR In my experience, there is common misconception that the fear faced by the living in drafting their Will is confronting their death. The fundamental fear as I have observed it is not the fear of the unknown but fear of the known. Who do I trust after my death to administer all of my assets with the same care and attention that I administered them? Who do I trust in death to deal with my bank, my broker, my life insurance company, CRA, lawyers, real estate agents and family members? Who could possibly fill my shoes? With all these questions swirling about, the client may experience paralysis and the years go by without the Will being prepared. I present in this blog some obvious, but I think under-considered, alternate executors to assist the client to clear the mental hurdle. ANXIETY We live in an increasingly individualistic world where the middle class are hired and fired at will, divorce rates are at 50% and citizens are increasingly self-reliant. In this environment, the reaction of some individuals has been to become more and more protective of in their private financial affairs.
The client may experience reluctance in arranging a Will as he fears organizing his information and laying out his financial picture to his lawyer, even though he knows of the legal protections afforded by privilege. Most lawyers quite rightly insist on full financial disclosure.CAREIt is common practice that, at the time the Will is prepared, the client will also execute a Power of Attorney for Personal Care. The POAPC heightens the client’s anxiety when faced with a further decision on the appropriate person to be his attorney for personal care. What person could possibly be entrusted with a client’s life and death? Should it be the same person as the executor? Should that person also have a Power of Attorney for Property and how will that document be triggered?As the questions pile up, so do the excuses for inaction.TIMINGAs a final consideration, there is never a right time to sign a Will. The client is too young and has no assets. The client is in mid-life and has no time. The client is too old and capacity now becomes an issue.The time to get on with the Will and the related documents is now because no time will be better and future times can only be worse.As first step up and over this wall of worry, more attention should be spent weighing the alternatives for executor. If that first and most difficult decision can be made, the other decisions may fall into place.FAMILYThe vast majority of clients automatically choose a spouse or another family member as their executor(s) for the administration of their Estate. With all due respect to family, most members will be moonlighters in their role as executor performing a one-time job in after-hours.There is a significant portion of the population that cannot be and will not be well served by the appointment of a spouse or family members. Beyond the obvious members of this group (those without trusted family), more clients should spend time asking themselves the simple question “Am I appointing a family member simply because I have not considered the alternatives or is my choice perhaps motivated by a desire to bring harmony to a disparate family?” If the answer is even a partial “Yes”, please read on.In circumstances where a spouse or family member is not appropriate, which I believe is increasingly the case, serious consideration must be given to alternatives such as trusted friends with business experience, trust companies and trusted lawyers.ACCOUNTINGSo if we go outside the family circle and there is no appropriate trusted friend, what does one look for in an executor?Executors face a myriad of legal, accounting and human issues. Simple missteps can turn the administration of an Estate into a nightmare. Any executor can be Court-ordered at any time to undergo scrutiny by way of a passing of formal accounts. On a formal passing, the executor will be called upon to explain to the beneficiaries and the Court what he did and why he did it. If the executor demonstrates an aptitude for attention to detail and skill in administering the Estate in compliance with the Will and the applicable laws, he will survive the formal passing. The ability to pass accounts is the essential characteristic of an executor. Does this sound like your spouse, family member or friend?The perfect executor is nowhere to be found but for many people the preferred choice should be a full-time professional.COMPENSATIONThe average Will is silent on compensation. The rule of thumb in Ontario is that the executor, whether layman or professional, is entitled to receive 5% of the value of the average-size, average-complexity Estate. This Estate is presently understood to consist of a house, investments and personal effects valued at $1Million.Given compensation at this level available to all comers, shouldn’t the client more often opt to receive a professional level of administration?TRUST COMPANIESAs a starting point, one must be aware that day trust companies are generally disinterested in Estates under $750,000. The standard fee letter for an Ontario trust company starts at 5% of the first $500,000 of the Estate and continues with a sliding scale for larger Estates. Beyond the 5% fee, there are minimum fees, professional fees and investment fees, which can all add up. The trust companies bring the advantages of perpetuity, experience in day-to-day management, independence and sophistication.As an alternative to the trust company, serious consideration should also be given to a trusted solicitor.On an Estate of $500,000 or more, solicitors in Ontario will often agree to fees at less than or equal to those charged by a trust company inclusive of legal work. The disadvantage of a solicitor executor is that, as the client ages, the choice must be revisited unless there are adequate alternates provided for in the Will. Surprisingly, there does not appear to be an abundance of solicitors actively seeking to act as executors in Ontario independent of preparing the Will, perhaps because they fear the unknown family dynamic. If a lawyer is the right choice, clients should take solace that the solicitor’s errors and omissions insurer in Ontario, LawPro, presently provides coverage for solicitors acting as executors.Once the client has determined to put his affairs in order, he should not let the choice of an executor stand in the way of preparation of his Will. There are a number of affordable alternatives available in Ontario but, as far as I can see, not enough discussion about them.
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