Have you reviewed who you want to have as the executor of your estate on your death–in other words, who makes sure that your wishes in your will are fully met? This choice could be one of the most important decisions you make.
Many people prefer to name a trust company as the executor of their will, for a variety of reasons and benefits. You need to compare these benefits to the capabilities of a personal friend, relative or family member acting as an executor in your given situation. You may choose to select an individual executor as a co-executor with the trust company, or have an alternative plan in which a designated trust company acts for you if the named executor is unwilling or unable to act. There are various options, implications and pros and cons you can discuss with your lawyer and/or trust company. Here is an overview of the key benefits of using a trust company.
Experience and expertise in will and estate planning
A large portion of any trust company’s operation involves acting as an executor. A trust company’s staff can advise you on a regular basis in terms of coordinating the contents of your will with the other financial affairs, needs and personal changes in your life, as they are closely interrelated. In addition, planning involves determining what taxes would be payable by the estate or beneficiaries and considering procedures for minimizing or providing for these taxes.
Accessibility
A trust officer is assigned a specific estate and is personally responsible for providing customized and responsive service.
Full attention to the needs of your estate
Given the established infrastructure and continuity offered by a trust company, the operation of your estate administration is smooth. If a layperson is an executor, their attention to the executor duties could be influenced by other personal interests, age, ill health, procrastination or excessive stress due to the demands of fulfilling expectations in an area where they have no experience or expertise.
Financial responsibility and security
Most trust companies in Canada are well-established and are backed by substantial capital and reserve accounts. Trust companies strictly segregate estate assets from the general funds. They are also covered by insurance in case there is a mistake or oversight due to negligence or inadvertence.
Funding capacity
A trust company can work with the members of your family to provide for their immediate financial requirements and needs immediately after your death.
Specialized knowledge
Due to the increasingly complex nature of tax and other legislation issues relating to an estate, as well as to the wide variety of options available, a trust company employs a staff of experts to review and advise on related issues. Specialists include expertise in tax, legal, insurance, investment and other areas.
Acting as a trustee
This means that the trust company protects your ongoing interests after you die. One example would be managing your investments or capital, and making payments to designated beneficiaries as required over time. If there are minor children, children from a previous marriage, or situations where the estate assets have to be controlled for an extended period of time, a trustee is required. A trustee could be giving out necessary funds from your estate over a period of 20 years or more.
Avoiding the possibility of family conflict
In any family situation there could be personality or ego conflicts, friction due to issues dealing with control, power, money, and distribution of family possessions or assets, resentment due to past financial favors to certain children or forgiveness of loans to others, unequal distribution of the estate to family members, or a multitude of other potential conflict areas. A trust company acts as a neutral, objective and professional entity in pre-empting or resolving potential disagreements affecting the administration or distribution of the estate.
Peace of mind
There is great relief in knowing that your estate will be administered competently, professionally, promptly and in accordance with your stated wishes. An experienced trust company can provide this peace of mind and feeling of security.
Finally, remember to interview a minimum of three trust companies before you decide which one is right for you.
