The Executor Conundrum

Choosing executors of an estate is a critical decision in estate planning, often considered the most consequential aspect of a will.

While many people appoint their adult children for this role, this isn't a feasible choice for everyone. According to the US Census Bureau, more than 16% of adults are childless. ①

“Moreover, as childlessness is more common among the younger cohort of older adults, they will make up an even greater share of the older population in the future.”

So, if not children, then who? Testators without children, or those who prefer not to appoint their children as executors, face the challenge of choosing friends and family members (...who are able and willing to take on the role), or third-party executor services from trust companies or other professionals.

A client’s trusted advisors are in a unique position to guide clients through this decision. They can help weigh the pros and cons of appointing personal acquaintances versus a professional service, considering factors such as familiarity with the testator's wishes, sensitivity to family dynamics, professional expertise, and cost.

That includes:

• Understand the Role of an Executor: Executors need to possess "the four C’s +1"② - Competence, Capacity, Conflict resolution skills, and Collaborative abilities. Plus, for Canadian estates, it's also preferable for the executor to be a Canadian resident.
• Assess Potential Executors: Advisors with a strong working relationship are well positioned to help a client assess who is best suited for their executor role, as well as how many③ executors. This requires an understanding of the client's goals, the complexity of the client’s affairs, and an appreciation of their family dynamics.
• Ensure Estate Plans Remain Relevant: Regular reviews are a part of best practices for estate planning. This includes proactive engagement, regular check-ins, responsiveness to life events and monitoring the ever-evolving estates landscape (legislative changes, case law, new products, new technology, etc.).
• Streamline the Estate: perhaps the most significant is helping clients “rationalize their estate plan”④ for a smoother, simpler estate administration process, by:

1. Integrating current estates-specific technology to organize a testator’s affairs (there are a number of good offerings for advisors to set up client "vaults," including eStatePlanner in Canada and Vanilla's Estate Advisory Platform for US advisors).
2. Minimizing assets flowing through the estate with an array of effective planning techniques (watch for my future articles on strategic estate planning from an executor’s perspective, including coverage of alter ego trusts).
3. Providing non-professional executors with support, including setting out in the will the authorization for executors to engage a Certified Executor Advisor (CEA) along with any other professional support they require.

As trusted advisors, it's our obligation to engage in these crucial conversations, particularly with the significant number of adults without children. By doing so, we can help ensure that our clients' estates are managed effectively and their intentions honoured.

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Footnotes:

① Statistic is for 2018, and childless is defined here as having no biological children [source]. Quote is from same source.

② Paraphrasing the iconic Four Ps of Marketing - for more , refer to: https://www.investopedia.com/terms/f/four-ps.asp

③ Aside from the challenge of identifying who is well-suited to be an executor, layer in the issue of how many executors is the ‘right number’? One for ease, two for balance, three to tie-break? Layer in “The Four C’s” and if the nominee will even accept the role when the time arrives, adds to the executor quandary - a topic to be explored in a future article!

④ "Rationalizing Your Estate Plan" is from Margaret O'Sullivan's encyclopedic coverage of estate planning in her book "Trust and Estate Essentials: Achieving Success in Family Succession" (2nd Edition).