Hiring an executor to administer your estate is not cheap

The cost of an executor

Question: I don’t want to burden my family with being my executor. Can I hire someone?

Answer: It’s a bit of work being an executor. This is an incomplete list:

1. Arranging for the disposal of remains and funeral services

2. Identifying and securing cash, jewellery, artwork and other valuable

3. Ensuring pets are looked after and re-homed

4. Clearing out fridges and freezers and securing the residence and ensuring insurance is in place

5. Securing computer, e-mail, social media and other online accounts

6. Ensuring property taxes and other home-related bills are paid

7. Ensuring vehicles are properly insured

8. Identifying mortgage, credit card and other creditors and ensuring accounts are kept in good standing and interest expense is minimized

9. Redirecting mail and dealing with the incoming mail

10. Preparing complete inventory of assets and their values and arranging appraisals where appropriate

11. Working with financial institutions to obtain account particulars and amounts

12. If applicable, arranging for interim management of a business

13. Ensuring investments are managed

14. Keeping and maintaining records and an accounting of all these steps

15. Searching the deceased’s home, safe deposit box, computer and anywhere else to identify any written (digital included) indication of their testamentary intentions, whether that be a formal will or informal document

16. Engageing and/or instructing a lawyer for applying for probate and provide information/documentation

17. Tracking down beneficiaries, as well as others, who need to be notified about probate

18. Engaging and/or instructing a real estate agent for the sale of property and a lawyer for the real estate transaction

19. Keeping beneficiaries informed and dealing with allocation and division of the estate along with conflicts that can arise between beneficiaries

Some people are really organized, ensuring that their affairs are in order. Others, not so much.

Some estates are very simple, consisting only of minimal value household furnishings and investment accounts. Others are very complex. The work of executor can be relatively minimal, but can also be a part-time job.

If you have children, it’s common to name one of them as your executor. How many of your children could reasonably add a part-time job to their lives? Keep in mind that it’s a job they are unlikely to have any experience taking on.

They might have trouble managing their own lives and finances, let alone being suddenly saddled with a whole host of administrative functions they have no familiarity with on top of managing yours.

If you don’t have children to name as your executor, there’s an added level of complexity. Children are likely to be at least somewhat familiar with your affairs, not so much if it’s a sibling or friend.

Finally, answering the question posed at the beginning of this column, yes you can hire someone to be your executor but it will cost you handsomely.

Correction. It won’t cost you a dime. You’ll be dead. The cost of a professional executor will come out of your estate, reducing the amounts received by your beneficiaries.

I’ve spoken with representatives of two major banks. I’m going to share with you my understanding of the cost of their executor services without naming the banks. Please note the fee structures get complex, so if you have any interest in a corporate executor you should talk directly to a bank representative.

There are minimum executor fees. For one bank it’s $25,000. The other it is $20,000.

But when looking at the numbers, those minimums are unlikely to apply.

Let’s take a $2 million estate, 50% of which is an average home in Kelowna, the balance being investments.

One bank would charge 4.25% on the first $1 million and 3.25% on the second million dollars, for a total of $75,000. The other bank would charge 4.5% on the first $1 million and 3.5% on the second, for a total of $80,000.

Each of them offer executor fee discounts on investment assets that were held in their accounts, providing strong encouragement to the testator to invest with them. The discounts are 15% and 20% respectively for investments under $2 million. The discounts do not apply to the total executor fee, but to the fee attributed to those investments.

On top of those executor fees, there are fees for actually administering the assets, which for each of the two banks would amount to at least another $15,000 given our scenario.

That’s exquisitely high pay for a part-time, largely administrative job—even at the more complex end of the scale.

Does professional executor work come any cheaper? You can enter whatever deal that you and your chosen executor agree on. One of the banks specifically invited a discussion with a potential client for the purpose of negotiating fees.

I know many lawyers will agree to act as executor and I suspect there is a wide range of fee arrangements available. I would think that accountants, bookkeepers, financial planners and many others would make suitable executors and might agree to enter into a reasonable compensation agreement with you to act as your executor.

But whoever you enter into a deal with is going to want to make money – money that one of your beneficiaries might well prefer to avoid paying out of your estate so more proceeds go to the beneficiaries.

In a future column, I’ll write about fees executors can claim, even if there isn’t a specific fee agreement made in advance.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.


Do you have to rewrite your will if you move to B.C.?

When to rewrite a will

A former Albertan, who I’ll refer to as Beth, was recently advised by a Kelowna law firm that (quoting from the law firm’s e-mail that she forwarded to me): “a will prepared in Alberta is not valid in B.C.”

I reassured her that a will validly made in Alberta is perfectly valid in B.C. But I’m a sole practitioner in a small firm. A much larger firm had advised her, in writing, it wasn’t. So, Beth was anxious. One law firm said one thing and I said the exact opposite.

I reached out to a partner at the firm asking that they please send Beth an e-mail retracting their incorrect advice. The reply I got was interesting.

“I confirm that a will made in Alberta is not invalid in B.C. merely because it was made in Alberta, and if it is valid and properly executed in Alberta, with two witnesses, then it would be valid in B.C”.

I responded noting that it wasn’t me who needed convincing. I repeated my request that their retraction go directly to Beth. I also noted in my response that Alberta law allows for holographic wills. A holograph will is one where the will-maker writes out their will by hand and then signs it. No witnesses are required.

The partner replied with the incorrect legal statement that a holograph will would be valid after a court application to cure it. Not so.

Section 80(a) of British Columbia’s Wills, Estates and Succession Act very clearly states: “A will is valid as to the formal requirements for making the will and is admissible to probate if it is made in accordance with the law of the place where the will is made.”

There are provisions that allow for a court application to “cure” an invalid will. But there’s no need to do that in the case of a valid will. A holographic validly made in Alberta is a valid will in British Columbia.

A “cure” would be required for a holographic will made in British Columbia. The court will “cure” or validate such a will if it is satisfied the document represents the fixed and final intentions of the will-maker, as to the disposal of their property on death.

I became very familiar with that aspect of the law because I’ve had to make such an application to “cure” a handwritten will made by a British Columbian who had only one witness.

My request was followed, a retraction e-mail was indeed sent directly to Beth and she avoided the expensive exercise of unnecessarily redoing her perfectly valid will.

I believe in the “tip of the iceberg” theory.

Any former employee of Hergott Law knows what I’m talking about. If I stumbled on an error, I knew it was more likely the “tip of an iceberg” than a one-off. I always dug in to identify how it occurred so that systems could be implemented to avoid it happening again.

The advice given by the legal assistant of that firm was an error. And then there was the partner’s misunderstanding of the validity of a holographic will made in Alberta.

I wonder how big the iceberg is. How many former Albertans have been advised their Alberta wills are not valid in B.C.? How many dollars have been spent unnecessarily making new wills?

I recommend an immigrant to British Columbia consult with a lawyer about their estate planning documents, including their will. Different provinces and countries can have significantly different legal systems and laws. While the will itself may be valid, it could be important to make a new will or take other estate planning steps to ensure your wishes will be best followed under British Columbia law.

An example is B.C. law that gives a spouse or child the right to challenge a will on the basis it doesn’t adequately provide for them. If you move here from another jurisdiction that doesn’t have those rights and think you can disinherit your children with impunity, you will want to be advised about how best to avoid such a challenge.

An Alberta-made Power of Attorney is not automatically valid in B.C. It must be accompanied by a certificate provided by an Alberta-qualified lawyer certifying it was validly made in Alberta.

Then there’s what seems to be the rather unique British Columbian Representation Agreement , something I wrote about in a previous column.

So yes, please consult with a B.C. lawyer about your estate planning documents if you have moved here from another jurisdiction. But if you’re told your existing will is automatically invalidated by your move, find another lawyer.

To help me determine the “size of the iceberg,” reach out to me if you were advised that your Alberta is invalid in B.C.?

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Why mutual wills may not be the answer for some couples

Passing on your estate

What tools, besides mutual wills, can ensure my hard-earned assets go to my kids?

That question was a sequel to an earlier column but the last few weeks I was distracted having been involved in a senseless vehicle crash and I wrote two road safety columns.

So, I’ll start by restating the problem and then reminding you how mutual wills are an imperfect fix.

Gail is a 40-year-old divorced mother of a 20-year-old daughter. She finds love with Ron, age 35, who has no children. Gail goes into the relationship with significantly more assets than Ron.

Ron moves into Gail’s house and their assets are combined.

Ten years into the relationship, at ages 50 and 45 respectively, Gail and Ron have wills written. They go with the classic will approach of leaving everything to each other, with the estate going to Gail’s daughter when the last of them dies.

Gail sadly dies of cancer at age 55. Ron, now 50, quickly finds love with a younger partner Patricia, aged 35, who brings three children into their new relationship. Gail’s daughter becomes estranged from Ron, upset at how quickly he shacked up with a new partner who’s the same age as she is.

Ron changes his will to leave everything to his new partner. Gail’s daughter ends up with nothing of an inheritance.

A “mutual will” is an imperfect fix. A mutual will is when the will-makers have an agreement (contract) that neither of them will ever revoke their wills. If they had done that, Ron changing his will would have breached that contract and Gail’s daughter would have legal recourse to right that wrong. But mutual wills do nothing to stop Ron from frittering away the assets to nothing.

And what if Ron has a child or two with his new, younger partner and/or adopts her children? Those children will have a legal claim they can pursue against Ron if he doesn’t leave them anything in his will.

The only protection mutual wills give is handcuffing each other from ever revoking their will. The assets themselves are not protected. An alternative would have been simply for Gail to transfer her assets to her daughter instead of combining them with Ron’s assets. That’s a bed alternative, though, because Gail wants to enjoy her wealth herself. She would also like to ensure Ron is looked after if she dies before he does. She just wants whatever’s left over after she and Ron die to go to her daughter.

There are other fixes, but they are also imperfect. One is to use a legal beast called a “trust.” A trust is not a separate legal entity, but it behaves sort of like it is.

Gail, the “settlor” could have transferred her assets out of her name and into the name of a trust. When doing so, she would have named herself as the “trustee”—the person with control over the trust assets. That would have allowed her to use whatever she wanted of trust assets while she was alive. And she would have named someone she could rely on to take over as trustee after she died.

That new trustee would have been required to follow the rules Gail set up for the trust, which would have included providing Ron with some level of financial support from the trust while he was alive.

The trust rules would also have provided that whatever’s left of trust assets would go to Gail’s daughter on Ron’s death. Regardless of the new relationship or new children Ron has after Gail’s death, the assets within the trust would have been protected.

Because assets are in the name of the trust, and not in Gail’s name, there’s no probate process, expenses and fees on Gail or Ron’s death.

Sound ideal? Unfortunately, there are many downsides.

Trusts are expensive to set up, with lawyers charging in the range of $5,000 to $10,000 and up. And there are significant tax implications. Except for special kinds of trusts that can be set up only after you’re 65, transferring assets into a trust is treated similarly to transferring assets to another person for tax purposes, triggering capital gains.

And trusts are required to file tax returns. The income tax payable on annual income earned on trust assets that’s not paid out to beneficiaries is at the highest personal marginal rate.

The most challenging limitation of trusts is the one that makes all estate planning difficult. It’s impossible to foresee and plan perfectly for the future. What if Ron never finds love again and suffers an injury that prevents him from working? Or he becomes ill with a disease requiring expensive care that exceeds the amount of trust income that has been allotted.

In those circumstances, Gail would have wanted her life partner to have full access to her assets, not limited to an annual level of support that preserves a bunch of money to eventually go to her daughter who won’t need it anyway.

Clever drafting of trust terms can anticipate and plan for many future possibilities. But the possibilities are endless, and no set of terms can perfectly plan for them.

Blended families have become the norm. The classic will that leaves everything to the other spouse and then to the children becomes inadequate when stepchildren are involved.

There’s no perfect fix, but there are some tools that can provide imperfect solutions.

My columns are intended to provide general information and cannot be relied on to make estate planning decisions. Please consult with a lawyer and estate tax accountant to explore all options as they might apply to your specific situation.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

Inattention and bad driving habits lead to crashes on the road

Road safety reinforcement

Was my outrage warranted? Was it fair for a reader to call her a twit?

She did fail what was plainly there to be seen ahead of her—a red light with fully stopped traffic. Her victim, in the last vehicle in the row of stopped traffic, might never fully recover. But does the offender deserve ridicule?

With a senseless rear-ender crash every six minutes in British Columbia, that are many “twits.” And they’re the tip of a much, much larger iceberg because there is a multitude of inattentive drivers for every one whose inattention causes a crash. But it’s unfair and unhelpful to ridicule only those whose inattention cause crashes as that ignores the bigger problem.

The driver didn’t choose to be dangerously inattentive. Nobody does. She came by it honestly. When we learn to drive, we are taught all sorts of safe driving behaviours, such as:

1. Walk-around of your vehicle and look up and down the street before getting in to back out of your driveway.

2. Look under vehicles parked at the sides of the street to watch for the legs of little folks who might dart out.

3. Keep your hands at the 10 and 2 positions on the steering wheel.

4. Shoulder-check every time you pull out, pass or turn right.

5. Wait until oncoming traffic is clearly stopped before completing a left turn.

6. Stay off your phone.

7. Etc., etc., etc.

But the importance of those safe-driving behaviours is not enforced. In fact, just the opposite occurs. You’re may in a hurry so you only check only your mirrors before backing out of your driveway. The odds were in your favour and a stroller wasn’t being pushed along the sidewalk. You experienced positive reinforcement for your road safety failure.

Your mind is on other things, and you don’t scan under parked vehicles for the legs of little folks. Again, the odds are in your favour. Nothing bad happens—positive reinforcement for distracted driving. You shoulder-check most of the time, but sometimes you miss doing it. Nothing bad happens and you miss doing it more and more. You gradually start reaching for your phone, first when waiting at stop lights but then here and there during light traffic. No crash. You are led to believe you can drive safely while engaging in telephone conversations and texting.

Our roadways and vehicles have become so easy to navigate and drive, it takes precious little attention to get from point A to point B 99% of the time. There are clearly marked lanes, easy to follow traffic lights and signs, and large bright yellow warning signs. Forget about texting, you could probably read a physical newspaper during your commute—99% of the time. The problem is, inattention leads to crashes.

We don’t make a choice to become an inattentive driver. It’s a gradual, step by step process. And it’s reinforced. Our increasing levels of inattentiveness are rewarded again and again because we make it safely to our destination. Road safety laws don’t help. They actually compound the problem.

Everyone (I hope) knows it’s distracting to engage in a cell phone conversation while you drive. It certainly was common knowledge before our provincial government passed cell phone driving laws in 2010. But our political leaders, contrary to a provincial government report that said there is no difference in the level of distraction between handheld and hands-free cell phone use, chose to ban only handheld cell phone use. That report is no longer available online. I’d be happy to e-mail it to you.

So, what loud and clear message did they give drivers? It’s perfectly safe to engage in cell phone discussions while driving as long as you spend the extra money for hands-free technology. That messaging leads to the logical conclusion it must also be safe to engage your brain in other distracting ways as well.

Our police forces conduct distracted driving “blitzes,” targeting hand-held phone use, further reinforcing the message that engaging in a telephone conversation while driving is not “distracting” as long as it’s hands-free. It drives me bonkers.

But back to my point. I’ve been an inattentive driver. I’ve been the “twit”.

I remember close calls. A column I wrote way back in 2012, told the story of a horrible crash in Kelowna on March 20, 2012, when a motorcyclist, with his wife on the back, was sitting at a complete stop in traffic at a red light on Highway 97 in Kelowna. The driver of an SUV was the “twit” in that crash.

The motorcyclist was killed and his widow suffered serious injuries. It was just another one of those senseless rear-end crashes that occur every six minutes in British Columbia.

I shared a technique a friend used to maintain attentiveness behind the wheel. Jess drives with her hands at the 10 and 2 positions 100% of the time. I said I was going to give that a try. I shared its success in a follow-up column a year later.

“I found it takes effort to keep my hands at a particular location on the steering wheel,” I wrote. “Any time my mind wanders, whether it be thinking about the office, my kids, or whatever the distraction, my hands naturally move to one of those more comfortable positions that most of us end up using after years and years of driving.”

It’s not about an optimal hand position. I had readers e-mail me to complain I had it wrong, that 9 and 3 is safer, or 8 and 4. The particular positioning isn’t the point. The point is to maintained a hand position. If your hands stray, that’s the wake-up call your mind has wandered. Try it.

Thank you for being patient with this road safety “distraction”. Next week I’ll get back to ways to protect against your estate going to someone else’s kids.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Lawyer Paul Hergott began writing as a columnist in January 2007. 

Achieving Justice, based on Paul’s personal injury practice at the time, focused on injury claims and road safety.  It was published weekly for 13½ years until July 2020, when his busy legal practice no longer left time for writing.

Paul was able to pick up writing again in January 2024. After transitioning his practice to estate administration and management.

Paul’s intention is to write primarily about end of life and estate related matters, but he is very easily distracted by other topics.

You are encouraged to contact Paul directly at [email protected] with legal questions and issues you would like him to write about.

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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