At my law office in the Kanata-Stittsville area of Ottawa, we focus on the areas of wills, estates and trusts. Because of this, I have the opportunity to meet with a lot of executors. Here are a few of the questions I often get asked by
executors:
I’ve been appointed as executor of my father’s estate. Should I see a lawyer or can I do it on my own?
Acting as an executor (also called an ‘estate trustee’) is a demanding job that comes with considerable responsibility and time demands. There are many tasks to be done from seeing to the deceased’s funeral to securing their assets to filing tax returns. As most people have little or no experience acting as an executor, they lack the knowledge or experience to carry out all of the various tasks without professional help. Some tasks, such as the court application to be appointed as the executor or to apply to the court for a passing of accounts, is generally done by a lawyer who is familiar with preparing court documents and managing the court process.
I know I am entitled to take compensation for acting as an executor but I think the ‘right thing to do’ is to not take any.
In our experience, executors who initially waive compensation often change their minds. They quickly realize the significant time and effort involved. Acting as an executor is a job that comes with a lot of responsibility and it is not a job that is taken care of in a couple of weeks. Even a simple estate can take a year to a year and a half to finalize.
Is executor compensation taxed in any way?
Yes, executor compensation is taxable income. An estate trustee should apply for a Business Number whenever executor compensation is being paid from an estate. The estate must withhold and then remit the appropriate tax and other source deductions and issue a t-slip to the executor for personal tax reporting purposes. Most executors are not familiar with all the requirements related to taxation and estates and should seek professional assistance to get it done right and on time. In the event of an audit by Canada Revenue Agency, prudent executors will want to have ‘all their ducks lined up’ and be ready to provide whatever is requested.
If you are acting as an executor and have these or other questions, call 613.836.9915 or email [email protected] to make an appointment to meet with me. We will review the role of executor and the responsibilities that come with it to make sure the job goes as smoothly as possible for you.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
