Naming an Executor Who Lives Somewhere Else: What It Costs and What to Do Instead

The conversation usually goes the same way. A parent decides that the most responsible of their children should handle the estate, which is a reasonable instinct and usually correct as a judgment of character. Nobody in the room mentions that this child moved to Calgary in 2011, or to Texas, and nobody thinks to, because where somebody lives feels like an irrelevant detail next to whether they can be trusted. It is not irrelevant. Depending on the province and the situation, a non resident executor may have to post a bond before a court will let them act, may create a tax question about where the estate is resident, and will certainly spend a great deal more time and money doing the job than a local person would. None of that is a reason to name somebody unsuitable who happens to live nearby. It is a reason to know about it while the will is being written, when the fix is a sentence, rather than afterwards, when the fix is a court application.

The bond, which is the one people meet first

Several provinces require an executor who does not reside in the province, or in some cases in Canada, to post a bond before the court will grant them the authority to act. The purpose is protective: the court is being asked to entrust assets to somebody outside its practical reach.

The practical effect is an obstacle at exactly the wrong time. A bond has to be obtained from an insurer, it is priced against the value of the estate, and it can be difficult to obtain at all where the executor’s own circumstances do not satisfy the provider. Meanwhile the estate is not being administered.

Courts can often dispense with the requirement, and applications to do so are routinely made and frequently granted. That is genuinely reassuring and it is also a court application: legal fees, an affidavit, and months.

Whether any of this applies depends on the province and on the facts, and it is a question a lawyer or notary answers in a sentence while the will is being made. The cost of asking is nothing. The cost of not asking is discovered by somebody else.

The residence question, which is quieter and larger

This is the part that surprises professionals, let alone families. Where an estate or a trust is resident for tax purposes is determined by where its central management and control actually sit, which in practice tends to follow the people making the decisions.

An estate administered entirely by a person living in another country can, depending on the facts, raise a question about whether it is resident there rather than in Canada. The consequences of that are technical and can be significant, and they are not the kind of thing an executor discovers on their own.

The same principle can matter inside a country. Provinces tax differently, and where an estate is administered can bear on which rules apply to income earned during the administration.

None of this means a family member abroad cannot serve. It means that if one does, a qualified tax professional should be involved from the start, and it means the question should be identified while the will is being written rather than in the second year of an administration.

The ordinary friction, which is the part that actually happens

Even where no bond is required and no residence question arises, distance is expensive in ways that are dull and relentless.

Documents need original signatures, and originals travel by courier across borders with customs forms. Financial institutions want identification verified in ways that are simple in person and awkward from far away. Meetings with the lawyer, the notary and the accountant happen across time zones. A house has to be secured, insured, maintained through a winter, emptied and sold, and every one of those requires somebody physically present or somebody paid to be. A safety deposit box has to be opened in person.

And an executor who has to take time off work and fly in three or four times is either bearing a real personal cost or is entitled to be reimbursed by the estate, which reduces what the beneficiaries receive. Both of those are legitimate and both are avoidable.

There is a human cost too, and it is the one families feel. An executor at a distance takes longer to do everything, and the beneficiaries waiting for an estate to be settled interpret delay as neglect far more readily than they interpret it as geography.

What to do instead

Naming somebody local is the obvious answer and it is not always available or right. Where it is, it removes every issue on this page at no cost.

Naming co executors, one local and one at a distance, is the arrangement most families settle on, and it works if the will says how they decide. Two executors who must act unanimously, in different time zones, on every routine decision, is a slower version of the original problem. A will can provide for majority decisions or can allocate responsibilities, and that drafting is the difference between a solution and a complication.

Naming a professional or a trust company is a real option, and it is often dismissed too quickly on the assumption that it is only for large estates. They charge, and the charge buys continuity, local presence, and a family that is not put in the position of having one sibling account to the others.

Reducing what passes through the estate is the structural answer and it deserves more attention than it gets. Assets that pass directly, a life insurance policy with a named beneficiary, registered accounts with valid designations where the province permits them, are not administered by the executor at all. An estate with less in it is a smaller job wherever the executor lives.

And where a distant executor is named anyway, which is often the right choice, the will can help them: a power to appoint agents, an express authorisation to employ professionals at the estate’s expense, and clear provision for reimbursement of travel. Those are sentences, and they make the job possible.

What to leave the person, whoever they are

The single most useful thing is not in the will. It is a document, kept with the will, that says where everything is: the institutions, the account numbers, the policies and their insurers, the accountant and the lawyer or notary, the location of the safety deposit box and its key, the digital accounts and how to reach them, and who else needs to be told.

For an executor at a distance that document is worth weeks. Without it, the first months of an estate are spent discovering what exists, from another country, by telephone, with institutions that will not talk to somebody who cannot yet prove they are entitled to ask.

And tell the person before they find out from a lawyer. Being named is a job, not an honour, and a person who has agreed to it in advance is a person who has had the chance to say no, which is far better for everyone than a person who renounces after the fact.

What the job exposes the person to

An executor is not a messenger. The role carries personal responsibility for the administration, and the part of it that catches people is tax. The returns must be filed and the amounts owing settled before the estate is handed out, and an executor who releases the money first can be left personally answerable for what turns out to be owing.

The protection is a clearance certificate from the Canada Revenue Agency, confirming the amounts have been paid before anything is distributed. Requesting one takes time, and the estate sits meanwhile. That wait is where distance does its damage: an executor in another city is under more pressure from beneficiaries who cannot see the work being done, and the temptation to release money early is strongest for the person least able to explain a delay in person.

Say it plainly to whoever is named. The beneficiaries can wait, and a distribution cannot be undone. Where the estate is complicated, a qualified tax professional is an ordinary expense of the estate rather than of the executor, and what is owed and when it can be released belongs there.

The person who says no, and the name that comes after

Being named obliges nobody. A person can renounce, and the moment to do it is before they have begun to act, because somebody who has started to administer an estate cannot simply put it down. That is the risk with a distant executor: they accept out of duty, discover in the third month what the job involves, and by then stepping away is far harder than declining.

So a will should name a substitute, and preferably more than one, in order. A single name with nobody behind it works only while that person is alive, willing and able, and wills are read years later. Where none of them can act, the appointment falls to a court application, which adds cost and months when a family has least appetite for either.

Two habits are worth the trouble. Review the names whenever anything changes, since the sibling who was local when the will was signed may not be local now. And confirm the substitute has been told, because somebody who learns of it at the moment they are needed is in the position of the person who learns they are first.

Frequently Asked Questions

Continue Learning

Read How to Choose an Executor for the rest of the decision, Executor and Liquidator Compensation for what the job pays, and The Estate Planning Checklist for the document that makes the job possible. The Succession Planning guide sets out the whole picture.