Most executors that I talk to are a bit daunted when they first undertake their tasks. What they want to know is what they have to do and how to go about doing it. While the law and legal advice are very valuable, the most important guide and assistance for an executor is in a document that many overlook or give only cursory attention: the will!
A well-drafted will not only tells the executor what to do, and the order in which to do it, but also gives a kit full of tools for the tasks ahead. Think of a plumber called out on a job. Before heading out, the plumber may have a rough idea of what the job requires, but will not know exactly what tools are needed. That plumber will pick up what should be a well-stocked tool-kit, containing everything he or she needs to deal with the job ahead. Sure, not every tool will be used on the job, but heading into an uncertain situation, the plumber wants all the most helpful tools.
So too with the executor. In the toolkit of the will, he or she will hope to find clauses that allow certain steps that might otherwise be problematic. For example, without a clause allowing the executor to sell or retain assets of the estate at his or her discretion, assets might have to be liquidated immediately, even in a bad market. Or if the executor does not liquidate, he or she may face the wrath of unforgiving beneficiaries. Most wills contain a standard clause giving the executor some discretion about when and how to liquidate assets.
Here are some other common clauses that the executor may be very pleased to find in the will:
- A clause allowing the executor to purchase assets of the estate. Executors are fiduciaries and held to the highest standard, so the law says that they cannot purchase assets of the estate, not even when the sale price is reasonable and everybody consents. The transaction is self-dealing, and the executor is forbidden to do it. The will, however, can allow the executor to purchase assets if the price is fair and the beneficiaries agree.
- A compensation clause. The law already allows executors to be paid for their work, but the common-law does not allow them to take this compensation until the very end of the administration. For tax and other reasons, the executor may be better taking the compensation in instalments. A common clause authorizes the executor to do this.
- Clauses dealing with digital assets. While some people may not need this clause, more and more executors will be handling estates that include Facebook accounts, email communications, online banking, and a host of other digital assets. If the executor can point to specific authority when dealing with service providers outside Ontario, they may have far less difficulty in doing their job.
There are literally dozens of clauses that can be inserted to make the life of an executor easier and the administration of the estate more efficient. While most will-makers start by thinking they want their will to be short and sweet, your executor will be grateful that you took a few pages to fill up the tool-kit!