How to Choose the Right Executor for a Will in Ontario

An executor is the person who administers an estate. This is the person who takes control of the deceased’s property, deals with the banks and the Canada Revenue Agency on the estate’s behalf, pays outstanding debts, and distributes what remains to the beneficiaries.

Many people name the eldest child or a close friend without considering what the role requires. A poor choice costs the estate time and money and can damage the relationships among the beneficiaries.

In Ontario the role is officially called estate trustee, though most people still say executor, and naming one is part of the larger process covered in Foote Law’s guide to wills and estate planning in Ontario.

How Foote Law Can Help

Choosing an executor is only one part of a properly drafted estate plan. Foote Law’s wills and estates lawyers help clients:

• Draft a will that names a suitable executor, at least one alternate, and, where appropriate, an express compensation clause
• Assess whether a professional or corporate executor is the right fit for a complex or contested estate
• Advise on the tax and bonding consequences of naming an executor who lives outside Ontario or outside Canada
• Draft powers of attorney for property and personal care alongside the will
• Guide a named executor through the probate application and administration of an estate after a death

Foote Law accepts Legal Aid Ontario certificates and Employee Assistance Program referrals. Call Foote Law in Orangeville at 519-940-8309. Foote Law serves clients in Orangeville, Brampton, Shelburne, Alliston, Barrie, Owen Sound, Newmarket, Guelph, and throughout the Greater Toronto Area, in person and virtually.

What an Executor Is Responsible For

An executor is responsible for:

• Custody of the will and safekeeping of the deceased’s home, valuables, and other estate property
• The probate application to the Ontario Superior Court of Justice, where probate is required
• Notice to banks, insurers, pension administrators, and government offices
• Payment of debts, funeral costs, and taxes
• Filing the deceased’s final tax return, and in most cases a separate return for the estate
• Formal accounts of every amount received and paid out
• Distribution of the remainder to the beneficiaries

Three aspects of the role are worth understanding:

Legal Authority Over the Estate

An executor becomes the legal representative of the estate. Banks, the Canada Revenue Agency, and insurers will deal with that person alone. Other family members, however close to the deceased, have no standing.

The Time Required

A straightforward estate can take a year or more. A dispute, a house that does not sell, or a tax problem can extend it well beyond that.

Personal Liability

An executor who distributes money before taxes are settled, or who mishandles estate funds, can be held personally responsible for the loss.

An executor is entitled to hire lawyers and accountants at the estate’s expense. The role requires diligence and sound judgment rather than professional qualifications.

What to Look For in an Executor

An executor should be:

• Trustworthy with other people’s money
• Organized enough to manage deadlines, paperwork, and records
• Willing to accept the role, having been asked, and knowing what it involves
• Likely to outlive the will-maker, and in good enough health to act
• Financially stable, because a recent bankruptcy or a fraud-related conviction can weigh against a person’s suitability, and the court can pass over a named executor it considers unfit
• Able to act impartially where beneficiaries disagree

Naming a Spouse or a Child as Executor

A spouse or an adult child is a common choice, and in Ontario there is nothing wrong with that. An executor is permitted to be a beneficiary.

Three situations deserve closer thought.

• Naming one child among several places that child is in charge of their siblings’ inheritances. They will make judgment calls about selling the house, timing distributions, and claiming compensation, and each of those decisions can be read as favouritism.
• Naming an elderly spouse may impose a significant burden, particularly where the estate involves a business, property in more than one province, or a trust that runs for years.
• Blended families raise the most difficult version of this problem. Where a second spouse and children from a first marriage both inherit, naming either side places one group in control of the other’s inheritance. These estates are a common source of litigation and the clearest situation for appointing a neutral executor or a professional.

Naming an Executor Who Lives Outside Canada

Ontario does not prohibit a non-resident executor, so people name a child in the United States without knowing what follows.

An executor who lives outside the Commonwealth generally must post a bond before the court will appoint them, normally in the amount of double the value of the estate’s Ontario assets.

A court can dispense with the requirement, but that usually requires the consent of the beneficiaries and is not automatic.

There is a tax consequence beneath the practical one. Where the executors who control the estate live outside Canada, the Canada Revenue Agency may treat the estate itself as non-resident, which can trigger Canadian tax the estate would not otherwise pay.

Two options avoid these consequences:

• Name someone resident in Ontario, or at least elsewhere in Canada
• If the person abroad should still be involved, name them alongside a resident co-executor, an arrangement courts are far more willing to approve, which usually removes or reduces the bond

One Executor, Two, or a Professional?

Co-executors can work well. Two people share the labour, and each serves as a check on the other.

They can also stall an estate. Co-executors generally must act together, so two people who stop speaking can bring the administration to a halt. They also do not each earn a fee. Unless the will provides otherwise, the compensation the estate pays is a single amount, divided between them.

A trust company or professional executor is the right answer for some estates: a complex portfolio, a business, beneficiaries in conflict, or no suitable person willing to act.

The cost is higher. Corporate trustees charge more than an individual executor would claim, particularly on a smaller estate. Where litigation is likely, that cost can be lower than the dispute it prevents.

Do Executors Get Paid?

Yes, unless the will provides otherwise. Under the Trustee Act an executor is entitled to fair and reasonable compensation, and Ontario practice has settled on a guideline:

• 2.5% of the money and assets received into the estate
• 2.5% of the money and assets paid out
• A modest annual care and management amount where the estate runs for years

Together that produces roughly 5% of the estate, but it is a guideline rather than a fixed rate. A court can adjust it in either direction, and beneficiaries can require the executor to justify it. The will can also fix the amount, which overrides the default and prevents an argument later.

Executor Compensation is Taxable

For a family member acting as executor, the Canada Revenue Agency treats it as employment income, which generally requires the estate to issue a T4 and remit CPP. An inheritance is received tax-free. That difference is why an executor who is also a beneficiary may waive the fee and take their share of the estate instead.

Two cautions apply:

• An arrangement in which the executor waives the fee and the beneficiaries return it as a gift afterward is treated by the Canada Revenue Agency as taxable, not as a gift
• Where a will leaves a gift to the executor, the law presumes the gift stands in place of compensation, unless the wording makes clear it is in addition to it

Both are addressed by an express compensation clause in the will.

Steps to Take After Naming an Executor

Name at Least One Alternate

A first choice can die before the will-maker, lose capacity, or renounce the role, which an executor is entitled to do provided they have not already begun acting. Without a backup, the court decides who takes over.

Ask the Person First

Someone who learns of the appointment only after the will-maker’s death may decline it.

Tell Them Where the Signed Original Will Is Kept

A copy is not the same thing, and an estate cannot proceed on a will no one can find.

Leave a Record of Personal and Financial Affairs

A list of accounts, insurers, advisors, and property saves months of work, and much of that information now exists only online.

Revisit the Choice

People move away, fall ill, leave the family, or cease to be the right person. Review the choice of executor whenever personal circumstances change.

If no named executor is able to act and there is no valid will, the family enters the court appointment process described in Foote Law’s guide to what happens when a person dies without a will in Ontario, which is slower and more expensive than any of the steps above.

An executor should be named as part of a properly drafted will, with an alternate and an express compensation clause.

Choosing the Right Executor?

Naming an executor is one of the most consequential decisions in a will, and the wrong choice can cost an estate time, money, and family relationships. Early legal advice helps identify the right person, name a suitable alternate, and draft a compensation clause that prevents disputes later. Call Foote Law in Orangeville at 519-940-8309.

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