Estates & Wills & Trusts, Family, Legal Supplier, Tax

Top 10 tips for estate executors: Dahary

By AdvocateDaily.com Staff

The position of estate executor is fraught with pitfalls, particularly for a person doing the job for the first time, says Avi Dahary, founder of AccounTrust.

In this special post, Dahary shares his top 10 tips for getting through the process smoothly.

“These are some big-picture items, but if trustees follow them, it will put them in a good position to be successful in the role,” he tells AdvocateDaily.com.

1. Manage assets prudently: “As an executor, you’re in a position of trust known as a fiduciary,” Dahary explains. “The assets in the estate don’t belong to you, but you are holding them for the ultimate benefit of the heirs, which means they have to be managed very carefully.”

2. Be transparent: “As part of their duty of care to beneficiaries, executors must act in their best interests,” he says. “That means you can’t hide certain information or be selective in what you share with beneficiaries. Instead, you should be fully transparent.”

3. Communicate promptly: “Beneficiaries are going to have a number of queries and questions for executors, and responses should be as prompt and clear as possible in order to minimize the risk of any misunderstandings,” Dahary says.

4. Stay Neutral: “Preserving neutrality is key to the role,” he says. “You don’t want anything you do to be seen as favouring one beneficiary over another.”

5. Hire professionals: “Seeking the assistance of lawyers, accountants, investment advisors, and other professionals who are skilled in the areas of estates and trusts is absolutely critical to the successful carrying out of an executor’s duties,” Dahary says. “That’s particularly important if you’re doing it for the first time. And if you’ve done it before, then you’ll already know the value of professional help.”

6. Stick to the will: “If the deceased left a will, then the executors must make sure they are following the instructions in it,” according to Dahary. “If the will gives them discretion as to certain decision-making, they should do that with integrity and objectivity."

7. Keep records: “It’s very important that records are kept diligently, in a clear and organized fashion,” Dahary says.

8. Document everything: "Write down as much as possible about what decisions were made, and how you reached them,” he says. “It’s very easy to forget things, and if you’re relying on memory to think about how events occurred, it can cause misunderstandings and other issues. If you ever end up in litigation, it’s going to make your life a lot easier too."

9. Stay Current: “Normally executors are in it for the long haul, but that doesn’t mean you can just drop things and go on vacation,” Dahary says. “You have to keep up to date with what’s happening in the estate and stay on top of your duties, which includes keeping financial records up to date, maintaining timely tax compliance with government authorities, and remaining punctual in communications with interested parties."

10. Obtain releases and clearances: “For example, when you’re making capital distributions to beneficiaries, you should obtain releases to absolve you of any further liability,” Dahary says. “Another example is in terms of tax compliance. When you file a final tax return for the deceased, you should obtain a clearance certificate from the Canada Revenue Agency to absolve you from any further tax liability.”

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