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Monday, September 19, 2011

Estate executors: and honour... and a pain

This new article from the Wall Street Journal should be essential reading for anyone out there who has  been appointed as an executor under a relative's will or is considering naming a relative as his or her executor.

One thing I noticed in this article that I haven't seen anywhere else is the comment that "executorships gone bad are on the rise". I believe this to be the case, based on my own observations. The article is American, but the same thing is happening here in Canada. I'm sure we could come up with a dozen theories as to why this is occurring, but the fact remains that it's becoming less and less effective to appoint a family member as an executor.

Click here to read the article.

2 comments:

  1. If I appoint my daughter as my executor and she is not capable because she's not experience in these matters and
    she goes to a lawyer for help , will it be very expensive?
    I also don't think she will have the time to be my power of attorney.
    I am all alone and don't know where to go for help.
    I have no friends here , I moved from another city so I feel helpless, do you suggest a trust company? they are very expensive , so I told my daugther if she need help to go to a lawyer .I also have a son in another city , I don't really know what to do.
    any suggestion?

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  2. Hi Delia,

    I'm surprised that people think trust companies are more expensive than lawyers for administering an estate. Trust companies are cheaper than you think. A trust company will charge 3.5 to 4% of an estate to do everything, A to Z, for an estate.

    A lawyer charges by the hour. The hourly rate depends on how senior the lawyer is, how large the firm is and where the lawyer is located, and could be anywhere from $100 to $400 per hour. If you've ever been involved in an estate or if you've seen a list of executor's tasks, you'll realize it takes a heck of a lot of hours.

    Also keep in mind that a lawyer does a different job than a trust company. You are paying a high hourly rate for legal advice, which is acceptable. Do you also want to pay that hourly rate for things that don't require a law degree, such as hiring realtors, paying the phone bill or talking to the accountant? If your daughter goes to a lawyer for help, she will pay by the hour for each and every task the lawyer (or the legal assistant) does. It's a different job, and trust companies are much better set up for this particular job than lawyers are.

    Don't be afraid to call up a trust company and tell them your situation and ask for an exact quote. Getting a quote doesn't obligate you to hire them, and at least you'd know for sure if it's expensive or not.

    You have a couple of good options here. You can appoint your daughter along with a trust company as joint or co executors. Your daughter would have an equal say in everything but wouldn't have to do all the work herself.

    Another option is to leave your daughter on as the only executor and ask that she look for help from a trust company to act as her agent. In that arrangement she would call the shots but the trust company would do the work. The only drawback is that you don't know for sure that she'll follow your suggestion.

    A third option, but one that I don't usually like as well, is to appoint both of your children together as executors. I say I don't really like it because I know how hard it is for siblings to get along as executors. However, your daughter would at least have some help.

    Trust companies also act as Power of Attorney for individuals (only for financial matters, never for medical). You might consider having a trust company appointed along with your daughter. Again, perhaps talk directly with a trust company to find out what you would be charged, as opposed to the general information you are getting here on my blog.

    Best of luck :)

    Lynne

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