It is important to understand the difference between an executor and a trustee of an estate, as these estate administration roles play a vital part in British Columbia’s probate process.
When creating a will, individuals typically name an executor, who is the person responsible for carrying out the instructions in their will. A trustee, on the other hand, is appointed to administer a trust for the benefit of the beneficiaries of the trust. Though these roles may sound similar, and a person can act as both an executor and a trustee, there are key differences between these two roles.
Estate executors are responsible for administering the estate of a deceased individual. The estate typically includes all of a person’s assets, including the personal and real property that was owned by that person at the time of their death. An executor’s primary function is to distribute the assets of the estate to the beneficiaries named in the will. Estate executors have a legal duty to act in the best interests of the deceased individual and the beneficiaries who are meant to inherit the assets of the estate.
The duties of an executor are life-long, which means that if new assets are discovered after completing the administration of an estate, the executor must reopen that estate and proceed with distributing those newly discovered assets in accordance with the will.
An executor is typically appointed by being explicitly named in a will, but they can also be appointed by implication if they are not explicitly named. Depending on how a will is drafted, the court may conclude that the deceased did in fact grant a person or persons the essential duties of an executor. If this occurs, these individuals may be appointed as executors “according to the tenor of the will.”
An estate trustee is responsible for administering trusts. A trust is a legal arrangement in which one or more trustees hold an asset for the benefit of the trust’s beneficiaries. The trust itself can be a written document, called an express trust, or it can be created by implication, which is an implied trust. Once a written trust is signed, it is a legally binding agreement.
There are a number of trusts that can be used for estate planning depending on what is best suited to an individual’s situation. Some examples of trusts used in estate planning include spousal or common-law partner trusts, alter ego trusts, joint partner trusts, testamentary trusts, and disability trusts.
Trustees are legally obligated to act in the best interests of the beneficiaries of the trust. Trustees must also execute the terms of the estate or trust in a timely manner, administer assets according to the terms of the will or trust, and maintain their responsibility and fidelity.
What happens if I don’t select an executor or trustee of the estate?
If you don’t select an executor or trustee for your estate, or if the person you named refuses to act in that role, then someone may apply to the court to be appointed as an administrator of your estate. An administrator has similar duties and obligations as an executor of an estate. If an executor is not named or is not willing to act, and no one else applies to administer an estate, the Public Guardian and Trustee of British Columbia may end up administering the estate.
The Wills, Estates and Succession Act establishes priority for individuals who may administer the estate. The priority is as follows:
- A spouse or person nominated by the spouse.
- A child with the consent of the majority of the children or a person nominated by that child.
- A child without the consent of the majority of the children.
- An intestate successor other than the spouse or child with the consent of the majority of intestate successors.
- An intestate successor other than the spouse or child without the consent of the majority of intestate successors.
- Any other person the court considers appropriate to appoint, including the Public Guardian and Trustee of British Columbia.
Estate executors and trustees play critical roles when it comes to estate administration. If you have questions about who you should name as your estate executor or trustee, or whether you need to name a trustee, don’t hesitate to contact us.