Issue link: https://digital.canadianlawyermag.com/i/98104
wills and estates Beware the estate executor role when you don���t know what you don���t know sCoT DalTon, Ceo ERAssure s o, you���re preparing your will and you want to name your executors to manage the administration of your estate after you die. You decide upon relatives or trusted family friends, because they are dependable, trustworthy, and understand your family dynamics ��� a tremendous compliment to your executor���s character. You probably understand that executors are responsible for many tasks, including: notifying bene���ciaries; advertising for creditors; locating, valuing, and protecting the assets; identifying and paying the legitimate debts of the estate including estate and income taxes; keeping detailed records of the activities including accounting records. Finally, they distribute the available proceeds to the bene���ciaries in accordance with the terms of the will. what you didn���t consider is that your executors put their personal assets on the line to help manage your last wishes ��� and most are totally unaware of the risk until they are challenged legally ��� inevitably an unwelcome and potentially expensive surprise. executors and trustees are subject to the performance requirements of various provincial estate and trust legislation; they are required to perform to high standards of care. these laws are enforced to protect the bene���ciaries 8 and creditors of trusts and estates from being disadvantaged by negligent and dishonest conduct of the people entrusted with administration of the assets. executors are personally liable to third parties through contracts they execute on behalf of the estate, like do-it-yourself real estate sales. Breaches what you didn���t consider is that your executors put their personal assets on the line to help manage your last wishes- and most are unaware of the risk until they are challenged legally. of duties in law are another area of risk. obvious concerns include preferential treatment of bene���ciaries, real or perceived mismanagement of ���nancial investments, or timing errors that impair real estate values. early warning signs pointing to executor challenges include: testators with second marriages and extended families; when people are excluded by the will; special treatment of any individual; loans or ���nancial guarantees given by the testator to adult children; or simply the provisions of the will being a surprise can result in a surprise action against the executor. good planning and legal advice is always prudent but can���t prevent a legal action from a determined litigant. even when executors have done everything right, they may be called upon to defend or settle claims even if they have acted for free, waiving compensation. But if you think that distributing the assets gets the executor off the hook, think again; the liabilities can survive with the executors ��� personally. most estates have risk that can be dif���cult to predict. our advice: don���t try. Prominent estate litigator ian hull says, ���i believe executor insurance should be considered for all estates; it���s smart security for the executor and the estate.��� erassure�� executor and estate liability insurance is canada���s leading provider of inexpensive protection for the non-professional executor. it is purchased when the estate is opened and is typically paid as an estate expense. detailed information and planning tools for testators and executors is available at www.erassure.com or through your local insurance broker.