For most people, their executor is their spouse. If you have adult children, one or more of them may be the natural replacement executor. For people who are single or without children, the decision of whom to appoint as executor can be more difficult. So, I can appreciate your dilemma, Gwenna.
The role and responsibilities of a person named in a power of attorney
You can name any other family member or friend as your executor, but some people do not have a natural first or even second choice. The same challenge can exist when deciding who to name in a power of attorney, personal directive, representation agreement or mandate. These are province-specific documents that appoint someone to make financial or health care decisions on your behalf.
A power of attorney can be used if someone is incapacitated or otherwise unable to make decisions on their own. It is valid during the person’s life, after which, a will becomes the governing document upon that person’s death.
When someone is named in one of these documents, they do not need to literally do all the work on their own, Gwenna. They can hire professionals to assist them, ranging from lawyers and accountants to investment advisors and other financial professionals. So, it may be less important that the chosen person has all the skills necessary to manage your finances themselves and more important that you consider them responsible and capable enough to seek out the help they may need.
There are options to name a professional in your estate documents. You can name an individual professional, or you can name a trust company. There are dozens of trust companies in Canada, and they are the only legal entities permitted to hold property in trust as agent or executor. Each of the banks owns trust companies and offers trust services. Unlike individuals, trust companies do not die, move abroad or change their mind.
Should you name a non-resident in your estate documents?
Naming a non-resident to act for you in your power of attorney or will, Gwenna, can create complexities. Securities regulations may impede their ability to manage your investments. It may also be difficult to deal with your affairs from abroad. There may also be income tax reporting or other country-specific implications of their role as a non-resident. They may also need to obtain an estate bond, which is effectively an insurance policy required to mitigate the risk of their not carrying out their duties properly.
As a result, a trust company can be a good option if there is not a natural family member or friend to choose or if these individuals are not Canadian residents. A trust company can also be a good choice if your financial affairs are complex or contentious.
The downside to naming a trust company
A drawback of naming a trust company is the cost. A trust company will typically require a signed fee agreement and may want specific wording inserted into your estate documents. Mind you, the compensation may be similar to what a non-professional may be entitled to under the applicable provincial fee guidelines. So, arguably, there may be a better value to naming a trust company for the same cost, depending on whether or not the individual or individuals you are considering are beneficiaries.
Sumber: www.moneysense.ca
