Taking on the role of executor might sound respectable, but do you know what the role actually entails? The role is far more intricate and challenging when you look into what it actually entails. If you have recently been named as an executor of an estate, it’s important to carefully evaluate the the legal, financial, and emotional difficulties that can make being an executor more complex than you initially anticipated.

1. Legal and Financial Responsibilities of an executor:

An executor is legally responsible for maintaining and distributing the estate of the deceased (obviously in accordance with his or her Will). Because the executor has to be in compliant with government laws, it’s important to know what he/she is doing. The role involves filing out court documents, notifying beneficiaries, and managing the debts and taxes for the estate of the deceased. Executors can run into complex legal requirements, and those complexities can lead to potential mistakes. This can delay dispersing assets to the right heirs.

In short, you REALLY need to know what you’re doing in your official capacity as executor.

2. Time and Resources:

Executorship is a time-consuming process: coordination with accountants, attorneys and beneficiaries is all a necessary part of being an executor. Depending upon the complexity of the estate, completing all of your duties can take several months (or even years) to close the estate. Executors have to deal with their own personal responsibilities, fill out the proper estate documents, attend meetings, etc. The duties of an executor are akin to a full-time job: a “job” that can take up about 100 hours (or more) and 12-18 months, to finally complete.

You may want to start with a team of individuals behind you: if you’re not a lawyer, and you need help in to manage your duties, you may wish to start with getting an estate planning lawyer to help you out. An estate planning lawyer can assist in dealing with unreasonable beneficiaries – beneficiaries who may dispute the prescribed amount of money they were designated by the deceased. An accountant can help you manage the ins-and-outs of filing estate administration taxes, correctly and on time, while simultaneously assist with paying off any outstanding loans (or debts) on the estate. A financial advisor can help manage asset distribution. A real estate agent can assist with selling any property the deceased may have wanted sold.

You can see the importance of having a whole team of people behind you.

You may have to take time off work to become an executor.

3. Family Dynamics and Emotional Strain:

In addition to all of the legal and financial duties of an executor, the role is definitely going to be emotionally draining, because the executor is usually a family member of the deceased. Combined with the added element of grief, this can lead to disagreements between beneficiaries (who may or may not be siblings of the executor in question). A lawyer may be able to assist with unruly beneficiaries who want to battle it out in court over the deceased’s estate and assets.

When it comes to money or sentimental items, tempers and emotions may flare.

4. Potential Financial Risks:

Executors could face the possibility of being held personally liable if financial assets are mismanaged; there are financial risks to consider: mismanagement of estate funds, filing taxes on time, and paying off debts.

One benefit of being an executor is that you can be compensated for your time as an executor: the Trustee Acts in Canada outlines instructions for executors to be compensated for their work. The provinces do have their own rules as to how executors should be compensated. The CRA upholds that any compensation received by an executor is to be taxed as income.

Even that comes with risks: some family members may have difficulty with giving one sibling compensation, running the risk of favoritism.

Nonetheless, everyone should be paid for their work.

This isn’t even going into the headache that Probate could bring.

Whether or not you decide to take on the role, take into account everything that the responsibility holds. That includes both the benefits and the potential pitfalls.

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