executors

You name your Executor in your Will. This person has the responsibility to gather up and secure your assets and then distribute them according to the instructions in your Will. Your Executor is also known as your Trustee or your personal representative. Your Executor can be a friend or family member, or you can appoint a professional bank or lawyer. They are usually paid a percentage of the estate.

How can you set Executor fees?

At LegalWills.ca we have made a decision to not allow you to set Executor fees in your Will. There is a good reason for this, and it does require some understanding of Executor fees and how they are calculated.

What are Executor Fees?

Within your Will you name an Executor. This person has the responsibility to gather your assets, secure them, and then distribute your assets to the beneficiaries according to the instructions in your Will. Together with these broad tasks, the Executor also has to arrange your funeral, file your final year taxes, apply to probate, and work with every business that you have interacted with to close down your accounts. In addition, there is now the concept of a Digital Executor. This person is responsible for working with all of your online accounts and digital assets to make sure that they are either closed down, memorialized, or transferred to a beneficiary.

It is a big task that can take many hours of work, over weeks and months, and even occasionally years. It is therefore only reasonable that an Executor should receive some compensation for all of this work that must be done to administer your estate.

Setting Executor fees in your Will
Credit: 123rf

What are the different types of Executor?

If you have a Will, then your Executor is appointed by you, in your Will. You can name a single person to take on the role or “joint Executors”. Within the Will you usually also name at least one backup or “alternate Executor”. Most of the people who prepare their Will at LegalWills.ca appoint a friend or family member as their Executor. There is absolutely no problem with your chosen Executor being a beneficiary.

In fact, it is very common for the Executor to be the main beneficiary, particularly when this person is your spouse. It can make things go quite smoothly when your spouse is transferring assets to their own name, when they are named as Executor of your Will. It is also common to then name children as a backup Executor (sometimes appointed as joint alternate Executors). Not all services allow joint Executors, but at LegalWills.ca you can name up to three first choice joint Executors, and up to three alternates who can either step into the role one by one, or who can work jointly when the first choice is unable or unwilling to serve.

Appointing an alternate Executor at LegalWills.ca
Naming an Alternate Executor at LegalWills.ca

When naming a friend or family member as an Executor, they must be an adult in your Province, but there are no other particular qualifications. They can have a criminal record, and they can have filed for bankruptcy. Just make sure that you are choosing an appropriate person.

Another option for your Executor is a professional Executor. This can be a bank, law firm, or trust company. Every major bank offers Executor fees, not all lawyers do, but some lawyers specialize in this part of the process and may even prepare a Will for a very low fee if they can be named as Executor. The catch with this is that some professional Executors set their own fees that are over and above the Executor fees set by the courts.

How are Executor fees calculated?

Executor fees are generally established on a Provincial level by the courts. They are calculated as a percentage of the estate according to a range based on the “size and complexity” of the estate. Keep in mind that these fees are over and above any costs that may be incurred through the process of estate administration.

In Ontario, Executor fees are usually calculated as 2.5% of all assets gathered, plus 2.5% of all assets disbursed to beneficiaries. In other words about 5 percent of the estate.

In BC, the level of Executor compensation is a little more vague, but is “up to” five percent depending on a variety of factors including:

  • the magnitude of the estate;
  • the care and responsibility involved;
  • the time occupied;
  • the skill and ability displayed; and
  • the success achieved in the final results.

In Alberta, the Executor compensation rates are subject to a more complicated calculation. Firstly, a calculation is made based on the size of the estate:

On the first $250,000.00 of capital: 3% – 5%
On the next $250,000.00 of capital: 2% – 4%
On the balance: 0.5% – 3%

There are further Executor fees based on revenues coming into the estate while the estate is being managed, as well as additional fees based on the assets being managed. So in general, it is a range that the Executor must pick from, and the level of compensation must then be validated by the courts.

Can you set your own level of Executor fees?

The fees quoted above are usually applicable only if the Will “is silent regarding Executor compensation”. In other words, you are legally permitted to set your own level of Executor compensation in your Will.

Of course, this will likely only happen if you have named a friend or family member as the Executor. If you name Royal Bank of Canada (RBC Royal Trust) as the Executor in your Will, they will likely require certain clauses to be inserted into the Will. You will not be able to name a professional Executor and set your own fees. Often, the fees charged by professional Executors may include additional administrative fees over and above the court approved levels of compensation.

Why doesn’t LegalWills.ca allow users to set Executor compensation?

In general the courts establish the level of Executor compensation based on the size and complexity of the estate. You have absolutely no idea what the size and complexity of your own estate will be.

You may feel that today, you have a good sense of the size of your estate, but keep in mind that your Will is not coming into effect today. It is some time in the hopefully distant future. You also have no idea how complicated your estate administration will be.

Supposing you are hit by a bus, and the bus company are held liable. But the bus company is holding off on paying any settlement. Your estate is going to get both larger in size, and significantly more complicated. There may be claims made against your estate that you are currently unaware of, because usually you have no idea how you are going to die.

You want to avoid a situation where you have stated in your Will that your Executor will receive $10,000 for their work, and your Executor realizes that this is going to be much more work than $10,000 worth. So they simply refuse to take on the role. You could end up with a situation where nobody wants the job because the level of compensation is too low for the work involved, particularly if the Will comes into effect 30 years from now when $10,000 is worth $1,000 in today’s money!

Can an Executor choose not to receive fees?

The flip side to this is naming a friend or family member who works through the Executor tasks and simply chooses not to be compensated. This is actually quite common, and in many countries, expected. Some family members may feel that it is unreasonable for the Executor to receive 5% of the value of a home simply for selling it through a real estate agent (who also receives a percentage of the home). In this case, the Executor will not need to do much work at all to earn $100,000 as a percentage of the sale of a home in downtown Toronto or Vancouver.

Can you leave a bequest to an Executor?

The Executor of your Will can be a beneficiary of the Will. This is very common when a spouse is named as both the Executor of the Will and also the main beneficiary. There are pros and cons to naming your spouse as the Executor of your Will, and we have covered this in a separate post.

However, don’t muddle the two. If you have left $10,000 to your brother, and also appointed your brother as the Executor, you should not assume that this bequest is in lieu of the Executor compensation. The two things should be kept quite separate. Your brother has every right to choose not to serve as Executor, but this should not mean forgoing any bequest given to them in the Will.

How Do I Change my Will if I Have an Existing Will?

A Last Will and Testament should not be written once in a lifetime. It should be written as soon as you become an adult, and should be updated throughout your life as your circumstances change.

There are a number of reasons for updating a Will. You may have had a change of financial circumstances or your personal situation may have changed. For example, you may have married or had children.

There may also have been a change of circumstances for somebody named in your Will. Perhaps your Executor has taken ill or your chosen guardians for your children have moved overseas.

You may also simply have had a change of heart. A charity may have become a significant part of your life and you want to recognize their work in your Will. Of course your relationships with your beneficiaries can also change.

What happens if you have a Will in place and want to change that Will?

There are Three Ways to Legally Change a Will

1: You can manually annotate your Will by writing on it. You would still need to at least initial the change, and also have two witnesses sign or initial next to that change. This is the least preferred approach to updating a Will because it is the most likely way to have a Will challenged. However, if the change is relatively benign, you could certainly consider this, E.g. for updating an address.

How not to change a Will
The Worst Way to Update a Will
Continue reading →

Understanding the words used in your Will

Are you thinking of writing a Will? Have you perhaps heard of terms like “Executor”, “Bequest”, “Living Will” and are now worried that the process of writing your Will may be beyond you? You may be wondering whether it is possible to write a Will without understanding all of these legal expressions. After all, that’s why many people hire a lawyer to prepare the document for them.

You may be surprised to learn that you really don’t need to understand any of these legal words in order to use a service like LegalWills.ca. However, the words may appear in your final Will, and in that context they will make sense to you. We also explain some of the key definitions when you are working through the service. But you may be interested to learn exactly what some of these words actually mean.

Perhaps you wrote your Will with a lawyer. You have had it witnessed and now it’s stored at your lawyer’s office but you still have no idea what it says. Don’t worry, this isn’t an uncommon situation. Many people go through the whole task of writing a Will and signing it when they don’t fully understand what it says.

Unfortunately in today’s legal world, estate attorneys don’t always have sufficient time to go over every detail and word of a Will. This is partly because their time costs money, but also because writing a Will is an everyday common practice to them. Therefore, they often neglect to go over the basics with their clients. An experienced and understanding estate attorney should always be willing to go over every detail of your Will and explain any confusing language so that you feel comfortable when signing it. However, the legal environment can be intimidating and attorneys may assume that you understand the legal terms when in fact you don’t.

Understanding legal words in the Will

At LegalWills.ca we almost fall into the same pattern ourselves when we talk to customers about the “Executor” and the “Beneficiaries”. We forget that some people may be hearing these words for the first time. They are words that are rarely, if ever, used outside of the context of writing a Will.

Continue reading →

Couple’s Will – Writing Wills as a couple in Canada.

Fifty-five percent of the people who use the Will writing service at LegalWills.ca describe themselves as married, while a further eleven percent are in a common-law relationship. In most cases, these people are preparing their Wills as a couple. In this post we want to break down exactly what is meant by a Couple’s Will, and the steps involved in creating Wills for two people when using the service at LegalWills.ca

Creating a couple's Will at LegalWills.ca
Couple creating their Will at LegalWills.ca

How can I prepare a Will in Canada?

Let us start by discussing the different ways to prepare a Last Will and Testament in Canada. It boils down to essentially three approaches:

Continue reading →

Working with a Will – The most common problems that arise

At LegalWills.ca, we help you to write your Will. We do not get involved in the probate process at all. After you have died, your Will is probated, and your Executor has the responsibility to carry out the instructions in your Will. Sometimes this is where the problems start and estate disputes arise.

This is separate from a challenge to a Will. Estate disputes are arguments arising while the estate is being managed by the Executor.

We recently spoke to Neil Milton of Ontario-Probate.ca. He specialized in probating of estates and has seen first hand the kinds of problems that can arise, and he also knows how to fix them.

He has kindly prepared this guest article, distilling his knowledge into the most common types of disputes that crop up while the Executor is trying to manage an estate.

Common estate disputes

While there are many causes of estate disputes, formal ‘will challenges’ are actually quite rare.

Common estate disputes
Credit: 123rf

There are a whole host of grievances that people have which usually fall in to one of the following categories:

  • Debts incurred by the deceased before their death and not paid before death;
  • Gifts made by the deceased before their death which reduce the size of their estate;
  • Obligations created by statute which must be paid by the estate before any distribution is made to beneficiaries;
  • Failure of the estate trustee to act at all;
  • Improper actions by the estate trustee; and,
  • Allegations that the will itself should be invalid (a ‘will challenge’).

Disputes in these difference categories are often handled by the Courts very differently – some are relatively quick and inexpensive to pursue, others are very complex and expensive.  It is very important to get the advice of experience legal counsel to determine whether there is a case and if so how to pursue it.

Continue reading →

Writing your Will is the first step – how to help your Executor

Online Will writing services have changed the game for Will writing. The traditional barriers of cost and convenience no longer apply. There was a time when a simple Will would cost $600 and take two or three visits to a lawyer. These visits would have to be coordinated with a spouse and other family members. Then if the Will needed to be updated, the whole process would have to be endured again.

It is no surprise then that the vast majority of Canadian adults don’t have a Will.

With online Will writing services, the costs have been brought down dramatically, so a Will can now be written for as little as $39.95. And of course the time consuming appointments are a thing of the past – you can just put the kids to bed, put your feet up, pick up your iPad, and write your Will.

Writing your Will with LegalWills.ca

We now expect more people to be writing their Will, simply because the process is so much more convenient and affordable. Most people who use our service wonder why they left it so long

Google review
Continue reading →

What happens to your debt when you die?

We are often asked this question from people who have been named as the Executor in a Will. They need to know if they are personally liable for any debts owed and what if there is not enough in the estate to cover them. What happens to your debt when you die?

Our friends at Ratehub have put together this article for us as a guest post.

What happens to your debt when you die?
Credit: 123rf

Debt is a part of life, and most Canadians are carrying around a significant amount, be it through credit cards, mortgages, and other lines of credit. With so many of us relying on credit, it’s no surprise that people often die with outstanding debts left unpaid.

It’s not always easy to talk about, but it’s important to make a plan for your debt ahead of time. Here’s a primer on what happens to debt when you die in Canada, which can help you get started.

Continue reading →

Canadian estate planning quiz

Explanation of the answers

This was a tough quiz covering estate planning in Canada. In this article we will provide you with some explanations for our answers.

Continue reading →

Online Will service – 11 things that you can do at LegalWills.ca

LegalWills.ca features that are not supported by any other leading online Will service.

We often see reviews of online Will writing services. These reviews typically look as far as pricing, look and feel of the website, maybe support options. Unfortunately reviewers rarely take the Will service itself for a test drive. They don’t usually imagine different scenarios to determine how capable the Will service is in addressing different demands.

At LegalWills.ca we confidently regard our Will writing service as the most complete, and most flexible service of any online Will application.

Online Will service
The Will service at LegalWills.ca

In this article, we will take a quick look at just eleven things that you can do at LegalWills.ca, things that are not supported by other leading online Will writing platforms.

Customer review
Continue reading →

The Ultimate Guide to Preparing a Will – 2024

Introduction to Preparing a Will

Everybody should have a Will. Not making a Will is unfair to those you leave behind. Even if your plans for estate distribution are simple and you do not have many assets, it is still much easier for the people that you leave behind to work with a Will than to resolve the estate of a person who has died intestate (without a Will). If you do not feel that you have significant assets now, remember that your Will only comes into effect when you die, not now, and you cannot possibly predict how large your estate will be when your Will is required. Preparing a Will is one of the most important tasks you can undertake if you have loved ones. Sadly, most of us put it off until it is too late.

By law, any competent adult can make their own legal Will; the law does not require you to have an attorney or a lawyer, to do this. A Will does not need to be a complicated document; it simply has to clearly state your wishes for the distribution of your estate.

Guide to Preparing a Will

123rf

Continue reading →

Probate in Canada – What it is, what it costs, how to reduce fees.

Must my Will go through probate?

To understand whether or not your Will needs to go through the probate process, you have to understand what happens after you have died.

Hopefully you have written a Last Will and Testament.

In your Will you name an Executor. This is the person that you entrust to gather and secure your assets. Your Executor then has to distribute the assets according to the instructions in your Will.

The Executor must collect up everything you own, keep it safe and secure until everything has been collected, and then pass these possessions and financial assets to your beneficiaries.

Probate
Copyright: aihumnoi / 123RF Stock Photo

Let us imagine a scenario.

Imagine your Executor going to your bank and presenting them with the Will. They explain to the bank that you have died and they show your Will to the cashier. The Will names your Executor. The person you have named shows their ID and they request the contents of the bank account. This person could even be one of your own children.

Continue reading →

Making a Will in Canada – the 2024 Complete Guide to your Options

What is the purpose of a Will?

Your Last Will and Testament allows you to speak after you have passed away. It does absolutely nothing and has no powers whatsoever all the time you are alive. But as soon as you die your Will has two key functions: it allows you to make key appointments and it allows you to describe the distribution of your assets. These assets include money, possessions, houses, investments, everything that you own. Making a Will is one of the most important responsibilities of every adult, and it should not be put off until a distant day in the future when you are “old”.

You should not think of making a Will as a once-in-a-lifetime event. You should always have a Will in place that reflects your current situation. You should write your first Will as soon as you are an adult, and then update it throughout your life as your circumstances change.

Your Key Appointments

By Making a Will you can make two key appointments.

Your Executor

This is the person you entrust to carry out the instructions in your Will. They have the responsibility to arrange your funeral, gather and secure your assets, and then distribute them according to the instructions in the Will. It is a very important appointment. Continue reading →

Preparing a Last Will and Testament – top ten reasons why you need one now.

There have probably been a number of situations in your life when you have thought, “I should be preparing a Last Will and Testament.” And for some reason or another you have never actually taken the steps needed to update or create your Will. Don’t feel too embarrassed, because you are certainly not alone. In 2016 only 38 per cent of Canadian adults had signed a legally valid Will. Of those that did, one third were out of date.

Even if the data was restricted to Canadians over the age of 35, only 38 percent of those polled had a legal, up-to-date Will.

Preparing a Last Will and Testament

               Canadian adults with a Last Will and Testament

Legal Will

       Canadian adults over the age of 35 with a legal Last Will and Testament

This leaves a lot of people legally unprepared and their families unprotected or provided for.

Continue reading →

Write a Will in Canada: the complete guide to our Canadian Legal Wills

Learn to write a Will at LegalWills.ca

An increasing number of Canadians are turning to services like the one at LegalWills.ca to write a Will. But every day we received requests from our customers to clarify a term, or clause in their Will. Usually this request comes with an apology for their lack of understanding, and every time we have to give the reassurances that;

  1. Although writing a Will is extremely important, it is not something that most of us do more than once of twice in a lifetime, so there is no reason to expect anybody to understand these terms.
  2. A Will is such an important document, but the legal profession intentionally tries to make the document more complicated that it needs to be by using arcane language. There is absolutely no reason for a Will to say, “I give, bequeath and devise” when a simple “I give” would work. Or to say, “I nominate, constitute and appoint” when a simple “I appoint” would mean the same thing. But using arcane language is a way of pushing people into using the services of a legal professional because it seems beyond the capabilities of the layperson.
  3. Nobody should be required to learn all of these terms in order to write a Will, and there are no clear concise guides that we could find.

Having said that, our Wills still use a lot of legal language, because the document is based on Continue reading →

Have you “Made a Will”? Make it your New Year’s Resolution.

It is that time of year again. The time when we all make New Year’s Resolutions for things that we know we really ought to do, but never quite get around to. We all know the popular ones. Go to the gym, lose weight, spend more time with our family. However, there is one New Year’s Resolution that we should all make sure that we keep. Have you made a Will? We should prioritize “making a Will“. Before you head to the gym and pay to join again, make sure that you protect your family and loved ones by writing a Will.

Making a Will

So many people do not make a Will, but really there is no excuse not to. It is one of the most important things that you should do to make sure that your family and friends are provided for in the event of your death. Continue reading →

When you die, what happens to your Facebook and social accounts?

What Happens to Your Facebook Account When You Die?

When we are making a Will, we know that we must think about our personal assets such as our house, money and possessions. However, have you ever stopped to think about what would happen to your social media accounts? Facebook has almost 1.8 billion users. You are most likely one of them. Have you thought about what happens to your Facebook account when you die? Even though many of us spend a great deal of time on Facebook, most people simply don’t think about what will happen to the account after they have died.

Facebook now gives you a number of options about what should happen to your account when you pass away. It is one of the most helpful of the social media networks in clarifying your choices. There are three choices you can make about what happens to your Facebook account when you die. You can simply delete the account, memorialize it or download the contents and then delete it. Just take some time to think about which option is the best for you. Once you have made your choice, Facebook has made it very easy for people to carry out their wishes. Continue reading →

Using an Estate planning lawyer? Here are some questions to ask…

Wondering whether our service is right for you? considering using an estate planning lawyer?

We know that 62 percent of Canadians don’t have a Will in place. A further 12 percent have a Will, but it’s out of date.

Even with that harrowing stat, the legal community still try to warn people against preparing their own Will. Claiming that you can only obtain a quality Last Will and Testament from an estate planning lawyer. Any approach to writing your own Will is going to result in pain for your family and loved ones.

In truth, there was some merit in this argument about 20 years ago when the only do-it-yourself Will writing options were a blank piece of paper, or a blank form Will kit. Both approaches are a disaster waiting to happen, and many estates went through protracted legal battles to settle an ambiguous instruction. Or worse, a Will was simply thrown out because it wasn’t signed correctly.

Thankfully in the years since LegalWills.ca came online in 2001, the online interactive Will writing services have come a long way. Much like tax preparation software that faced a similar backlash from tax preparing accountants, the use of online interactive Will writing services has grown year by year.

Will writing office

Online Will writing services have also improved to a point that for 99 percent of people, the final Will document is indistinguishable from a Will created by an estate planning lawyer. We know this because we use the exact same software used by any estate planning lawyer in Canada. We’ve just give you direct access to it.

Continue reading →

Your Executor – the most important appointment of your life

A key question that many people struggle with is: Who will be your executor in your Last Will and Testament?

Okay, who or what exactly is your Executor?

First of all, it is important to know the definition of an executor and what role they play in your last will and testament.

It is your executor’s responsibility to handle your last wishes. The executor is in charge of handling the estate and distributing property and possessions according to your instructions. It is also their duty to settle debts; a required step before your executor can distribute inheritances.

Your Executor

We provide a complete list of Executor responsibilities as part of our services at LegalWills.ca.

Securing your Estate

Your executor must keep your assets safe. You may have heard of terrible episodes of a person dying and the family descending on the estate. It can become a free-for-all where things just start disappearing. “He always told me that I could have this” says the favourite niece as she walks out of the door with the Andy Warhol pencil sketch. Continue reading →

Digital assets in your Last Will and Testament – you need a plan.

As we spend more time online, our social, sentimental, and financial assets have begun to migrate online as well. Collectively, we have come to call these items, your digital assets.

Unfortunately, people all too frequently neglect the digital component when they write a Will. You probably haven’t considered creating a plan for your Facebook, LinkedIn or Twitter accounts. Maybe you have recently experienced the loss of a friend and seen first hand the mis-management of online accounts for people who are no longer alive, I know I have. Sadly, three of my ex-colleagues have died, and every year, LinkedIn still prompts me to congratulate them on their work anniversary.

But there is much more to digital assets than your social accounts. Some of these assets simply need to be managed, some need named beneficiaries, and some have real monetary value and should be included as part of your estate.

 

Your Digital Assets – what are they?

You can divide the three most common forms of digital assets into three categories: social, sentimental, and financial digital assets. You may have a plan for your social assets, but having a comprehensive plan for your sentimental and financial assets is probably more important. Continue reading →

The Canadian Will Kit – and the evolution of Will services

Many of us remember the TV ads for the Canadian Will Kit. It later became the Complete Canadian estate planning kit. It’s been over a decade since those ads ran on TV and Radio, and to this day, we still receive calls from people looking for one.

Unfortunately, these kits became synonymous with “writing your own Will”. The kits were bad, the Wills that they created caused many problems, and so people still think that writing your own Will is a bad idea.

 

The common criticisms of “boilerplate” Wills like the Canadian Will Kit, and “one-size fits all” kits are still trotted out by lawyers advising people against writing their own Wills. But these criticisms are woefully out of date, and simply no longer apply to online Will services like the one at LegalWills.ca. Continue reading →