Illustration by The Globe and Mail
Q: My husband and I have appointed our three children as the executors of our will, but our eldest daughter works in and is a citizen of the United States. Can we still ensure that she is an equal executor?
We asked Jason Heath, CFP, managing director, Objective Financial Partners Inc., to answer this one.
According to Mr. Heath, your daughter can, in fact, act as your executor. Her U.S. citizenship does not prevent this. The primary consideration, however, is not her citizenship, but her residency.
“The complication with a non‑resident executor is that they may trigger additional probate requirements,” Mr. Heath said. “Provincial courts often require a bond to be provided for executors who live outside of Canada. This estate trustee security can be substantial because it is often set at more than the value of the estate assets.”
Because you have appointed three children as co‑executors, two of whom live in Canada, Mr. Heath noted that is very helpful in this situation. “This Canadian resident majority is key as it supports the tax residency of the estate, where its ‘central management and control’ is exercised, as being in Canada,” he said. This can ensure the estate remains a Canadian resident for tax purposes, thus avoiding unnecessary cross-border tax complexity. It also means the provincial court is more likely to waive the bond requirement for the estate.
I’m thinking of retiring and moving to the East Coast. What are the pros and cons?
It should be understood by all your children that your daughter can still be involved in all the decisions made for your estate settlement. Meanwhile, your other children might be primarily signing documents and handling in-person requirements. Some other considerations to take include a bond-waiver clause and clear instructions to keep management of the estate in Canada – both could be useful in a will update, Mr. Heath added.
It also bears mentioning that you do not have to be an equal estate executor to be an equal beneficiary. According to Mr. Heath, parents do not always name all their children to be executors. He advised you to seek estate legal advice to make sure all the bases of your situation are covered, especially the question of a non-resident executor.
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