Choosing Your Estate Trustee: What You Need to Consider

By Craig Mara

Selecting an Estate Trustee (previously known as your “Executor/Executrix” and hereinafter referred to as “Trustee”) is one of the most important decisions you will make when preparing your Will.  Your Trustee will ultimately be responsible for ensuring your final wishes are carried out and that your estate is administered in accordance with the law.  This is a complex and demanding task, so it is crucial to select someone who is capable, who is well-suited to the role and, importantly, who you trust.  

Often, testators may wish to select their Trustee by way of a symbolic appointment, with little further thought put to the subject other than what they may feel is “fair” or “right”.  In the example of a couple with two children, they may select their spouse as their Trustee in the first instance and, should their spouse have predeceased them, their two children would be named as alternate Trustees, jointly, on the basis that it would not be fair to choose one over the other. 

 If and when the children should act as joint Trustees, what should happen if they should disagree with respect to one or more aspects of the estate administration?  What if one of those children were to have moved to a different country?  Without proper foresight, an appointment such as this may have unintended consequences that could cost your estate a great deal of time and money. 

Here are some key factors to think about when selecting your Estate Trustee:

1. Trust

Although your Trustee is bound by the terms of your Will, there are many key decisions that they will need to make and these decisions may have a great bearing upon the value of the ultimate distribution to your beneficiaries.  This is particularly true if your Trustee will need to keep a portion of your estate invested for an extended period of time – for example through a testamentary trust that goes on for a number of years.  In this circumstance, your Trustee will need to make prudent investment decisions in order to maximize the balance of funds available to be paid out to the beneficiary on the date the trust is wound up.  

Amongst other things, your Trustee will also have the sole discretion to select the method of the disposal of your remains, notwithstanding what may be written in your will.  Therefore, it is very important that, if you have particular wishes in this regard, that they are known by your Trustee and that you trust they will abide by these wishes.  

 

2. Organizational Skills and Attention to Detail.

Administering an estate includes managing financial accounts, paying debts, filing taxes, keeping a well documented accounting of their actions and distributing assets in accordance with the terms of your will.  These tasks often involve numerous steps, filings and important deadlines which may incur financial penalties to your estate if missed.  While it is not required to have experience in law or accounting, appointing someone who is meticulous and able to handle these important administrative tasks may be the first benefit you provide for your beneficiaries.  

 

3. Availability and Willingness.

Acting as a Trustee will take significant time and effort, often spanning several months if not years.  Consider whether the person you are choosing has the time and energy to commit to this role and, if you are uncertain, it may benefit you to discuss this with the person prior to the execution of your Will.  Perhaps the most significant discretion your Trustee will exercise is the decision whether or not to act at all in this role.  Accordingly, confidence that your chosen Trustee is willing to accept this duty will certainly provide you with piece of mind, as your Will is only as good as the actions of the person you have selected to uphold it.  

 

4. Suitability and Appropriateness.

Willingness is not the only important characteristic of your Trustee.  No matter how willing they are, the fact of the matter is, they may not be the most suitable or appropriate person to appoint for various reasons.

One such reason may be their age.  While it is not necessary that your Trustee be younger than you, their ability to fulfil your wishes in the future may diminish with time.  For example, selecting one’s older and trusted sibling may become frustrated by their advancing age and general health in the event that you should one day predecease them and they are called to act.  In this instance, they may no longer have the energy to assume this role.

Another consideration that ought to be made is that of their location.  Pragmatically speaking, the person you trust the most may not be able to attend to the requirements of your estate if they are not located near your assets.  Furthermore, if your Trustee is located in a different country, the process by which they apply to the Court to obtain a Certificate of Appointment of Estate Trustee (commonly known as “probate”) is affected, as this person will be imposed with a Bond requirement that Ontarian applicants are not.  Depending on the value of your estate, this bond may be a tremendous amount of money.

Does the Trustee you are considering have business interests of their own?  Would you like your Trustee to take compensation for acting?  Is your Trustee familiar with your unique family dynamics?  These are only few of many considerations that ought to be made to this appointment.  The foregoing discussion is not meant to dissuade you from selecting the person of your choosing as your Trustee but, rather, to shed light on the potential consequences that this appointment may incur if it is not given sufficient thought.  If you have any questions about estate trustees, their role, or any other aspect of estate planning, we are more than happy to discuss them with you during a complimentary consultation

Category: NIKA LAW LLP

NIKA LAW LLP