The estate trustee (also known as the executor) is the
representative specified in an individual's will to carry out
the terms of the will. The role of the estate trustee is onerous
and requires sound judgment, patience, tact and empathy. The estate
trustee's responsibility should not be taken lightly: a
potential trustee should not accept the role without weighing the
time, commitment and tasks involved. When you are making a will,
you should choose an estate trustee carefully, considering the
candidate's suitability for this demanding position. The role of the estate trustee is to wind up the affairs of the
deceased. The estate trustee collects, manages and invests the
assets as required, pays debts and then distributes the assets to
the persons entitled to them (the beneficiaries). The estate may be
immediately distributable, or some or all of the property may have
to be held in trust until a specific event or for a stated period
of time. The estate trustee is responsible to the beneficiaries of
the estate. An estate trustee derives authority to act from the will and has
certain statutory rights and obligations. In a well-drawn will, the
beneficiaries and their interests are clearly defined, which
ordinarily makes the task of distributing the assets
straightforward. An estate trustee should commence his or her
duties immediately upon the death of the testator. Having a will
probated by the court merely confirms the estate trustee's
appointment and establishes under the seal of the court that the
written instrument is the last will and testament of the deceased
person. An estate trustee who is not willing to assume the duties
of office, however, may formally renounce the right to act. The estate trustee carries out the following duties: Distributes the assets according to the terms of the will and
obtains releases from the beneficiaries. A lawyer may be retained
to advise the estate trustee and to offer assistance as
required, but all decisions must be made by the
estate trustee, who cannot delegate this decision-making
responsibility to others. The estate trustee will often look to the
lawyer to Under the Trustee Act (Ontario), an estate trustee is
entitled to a fair and reasonable allowance for his or her
"care, pains, trouble and time" spent administering the
estate. If the beneficiaries are all adults, they can agree upon
the terms of compensation. If the estate accounts are audited, a
judge of the Ontario Superior Court of Justice may award
compensation. The estate trustee's compensation entitlement may
also be specified in the will. Generally, the maximum amount of compensation awarded to the
estate trustee is about 5 percent of the aggregate value of the
estate. Any compensation received by an estate trustee is taxable
income and must be declared in the recipient's income tax
return. Any individual who is of sound mind and at least 18 years of age
may serve as an estate trustee. A testator may choose to appoint
multiple estate trustees who will act together; a variety of
perspectives and skills may help resolve difficult estate
administration issues. A testator may appoint a trust company as an estate trustee of
his or her estate. There are advantages and disadvantages to
appointing a trust company as an estate trustee. A trust company
may provide a higher level of experience in matters of investment,
estate accounting and other estate administration tasks and may
have greater resources than most individual estate trustees. A
trust company also offers permanence, which may be desirable if the
will provides for trusts of potentially long duration. On the other
hand, trust companies are sometimes perceived as inflexible and
less responsive than individual estate trustees. A testator may
appoint a trust company and an individual to serve as
co-trustees. In choosing an estate trustee, a testator should consider the
following factors: The role of the estate trustee is usually time-consuming and
laborious; the office is by no means an honorary or a nominal one.
You should select an estate trustee who is likely to be physically
and mentally prepared for the job. Ideally, an estate trustee lives reasonably close to the
testator so that he or she can perform estate-related duties
conveniently and cost-effectively. If the chosen estate trustee
resides outside Ontario and outside the Commonwealth, he or she
must provide security (e.g., a bond) before being granted a
certificate of appointment by the court. The law requires that the estate trustee demonstrate care,
diligence and reasonable prudence in carrying out his or her
duties. The estate trustee should be organized, responsible and
capable of making financial decisions. The level of financial or
business skill required of the estate trustee will depend to a
large extent on the nature of the assets that make up the estate.
If a large part of the estate consists of an interest in a family
business, you may wish to appoint an estate trustee with a more
sophisticated business awareness than would be necessary if the
estate consisted of only a principal residence and some Canada
Savings Bonds. An estate trustee should also be familiar with the
testator's family circumstances. This may be particularly
desirable if the testator has established continuing trusts under
the will for various family members or others. Honesty is an essential trait of an estate trustee. This person
must act in the best interests of the beneficiaries and must, at
all times, avoid favouring his or her interests over those of the
beneficiaries. You should provide at least one alternative estate trustee who
will be able to serve if the first named estate trustee is
unwilling or unable to act or continue to act, or dies before the
testator dies or before the completion of the administration of the
estate. After considering all the factors and choosing an estate
trustee, you should ask the prospective estate trustee if he or she
would be willing to act. If the person is not willing to act,
choose another estate trustee. The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
What Is an Estate Trustee?
What Are the Duties of an Estate Trustee?
Is an Estate Trustee Entitled to Compensation?
Who Should Be Your Estate Trustee?
Who May Serve?
What to Consider in Choosing an Estate Trustee
ARTICLE
13 January 2011
The Role of an Estate Trustee
The estate trustee (also known as the executor) is the representative specified in an individual’s will to carry out the terms of the will.