Choosing your substitute decision-maker under a Power of Attorney for Property document (a “POA”) or to be the Trustee of your Estate (aka “Executor”) is, in our view, one of the most critical decisions you will have to make in your lifetime.
Too often, financial abuse, discord between family members, and unnecessary legal fees come about when the wrong decision-makers are appointed to manage one’s affairs either upon incapacity or death. Family members are not always the best suited. There are options, such as professional trustees, trust companies and even lawyers and accountants that do have expertise in these roles which we encourage our clients to at least consider. Yes, professional appointments will cost you, but often the fees are reasonable and within or less than the common-law standards for executor fees that are available to individuals.
If you are, however, adamant in appointing family members to manage your affairs for you during your lifetime under a POA, or as the Trustee of your Estate thereafter, here are what we consider the top required skills or qualities they should possess:
1. TRUSTWORTHINESS. This may seem trite, and we always want to think the best of our loved ones, but dishonest acts usually occur when no one is watching. Choose the person who you AND anyone with a financial interest in your Estate trust implicitly.
2. RATIONAL. Do not choose the emotional or over-sensitive member of your family. Death and incapacity are scenarios inherently filled with emotion. Your power of attorney and Estate Trustee should be able to think and make time-sensitive decisions based on rational thinking whilst honouring your wishes—not according to their heartstrings.
3. SOMEONE WITH THE TIME. Managing your property and finances on your incapacity or being your Estate Trustee on your passing is no small feat. In your life, this may involve daily management of financial affairs and upon death, estates can take anywhere from one to five years to administer. Further, both roles require substantial record-keeping. Do not choose someone who is overly busy with their own life, job, or kids of their own.
4. NEUTRAL. Do not appoint a POA or Estate Trustee that has any conflict with anyone else in your family. This is a sure recipe for disaster. Although the person you appoint may be the apple of your eye, you may be fueling existing conflict or resentment within the family by choosing one person over another. An even worse decision would be to name people jointly who do not usually see eye to eye. Plan for conflicts and pick the “Switzerland” type!
5. ONTARIO RESIDENT. Assigning these responsibilities to someone who does not ordinarily reside in Ontario can be problematic. Think about what is going to be most practical. Furthermore, if your nominee resides in the US or another non-commonwealth country, the court of Ontario may require him or her to post a bond with the court as a form of security before they will be formally appointed that may be up to two times the value of the estate assets. Moreover, the legal fees incurred to appoint a non-resident Estate Trustee—an expense usually borne by the estate—is almost always higher than for residents of Ontario.
6. TECHNOLOGICALLY COMPETENT. When considering your entire estate, do not forget to turn your mind to your Digital Assets! Digital Assets may include social media profiles, cryptocurrency, the information contained in electronic form, computers, smartphones, emails, websites etc. Ensure that whoever you appoint can navigate the digital world and can access the personal information required to manage these assets. As a solution, you may consider appointing a “Digital Executor” in your Will who is specifically appointed to manage your Digital Assets in addition to a general Estate Trustee. Further, as the world we live in today moves towards dealings through email and “online”, consider that the ease of estate administration will most certainly be more effective with a technology-competent person at the helm.
In closing, we urge you to think carefully about who you are nominating to act on your behalf upon any potential incapacity or upon your demise. If you at a minimum consider these top factors, we believe you will reduce the risk of disputes, litigation, and legal costs to come.
We pride ourselves on providing a compassionate and sensitive approach to dealing with your legal issues