This week, Jordy and Ian discussed Corporate Executors, and more specifically why you might consider them, when to consider them, and how to appoint them.
According to Ian, a corporate executor is often a good choice. They are completely neutral and well-trained.
The following are the key attributes of a good executor:
- ~Financial Management
- Shared Values
- Impartiality/No Conflicts
- Geographic Proximity
- Relationship Impact
Many of these attributes are present with Corporate Executors.
There are many reasons to appoint a trust company, including:
- No alternative option
- ~No one willing
- ~Non residents
- ~Lack of experience/ability
- Unwilling to burden family/friends
- Family dynamics
- Length of administration
- Potential disputes
- Difficult assets
The following is a list of the pros of appointing a Corporate Executor:
- They don’t die
- They don’t get old and tired
- They are neutral
- They were not Mom’s favourite
- They are experienced
- They have deep pockets
- They are a common enemy for the beneficiaries
- They don’t charge unless they act
These are the cons of appointing a Corporate Executor:
- Cost – they don’t work for free
- However the fees can usually be negotiated and may cost less than the the typical executor fee
- They don’t have a personal connection
- They can be bureaucratic
- They do things by the book
- There are good trust officers and not as good trust officers
- Additional drafting when preparing the will.
Factors to Consider When Choosing Which Trust Company
- Where does the client bank?
- Might give you a better fee
- How deep is their trust department?
- How experienced are they?
- How many trust officers do they have?
- Who will give the best fee quote?
- Client’s comfort
We were lucky to be joined by Paul Fenson, the National Director at ScotiaTrust. He shed some light on how trust companies act.
Paul discussed how ScotiaTrust deals with the investment of trust funds.
As for how ScotiaTrust works with co-executors, Mr. Fenson explained that they provide them with investment considerations and seek their concurrence on every decision. Overall, they are happy to work with and seek the guidance of co-trustees.
Finally, Mr. Fenson discussed how ScotiaTrust makes encroachment decisions. ScotiaTrust treats all discretionary decisions in the same way:. The trust officer of each file has to present the proposal to a committee. The proposal has to include the facts, the terms of will, the request of the beneficiary, the impacted parties, etc. The trust officer also has to make a recommendation. All trust companies have scales of relevance. If the request is a small encroachment, the decision can probably be made in 2 days or less, by a small group of people. However, larger decisions might be escalated to a higher level in the bank who has to review the request.
Jordy and Ian then discussed the drafting issues associated with appointing a Corporate Executor, including that each Trust Company has its own special clauses that they require to be included in a Will.
Great news for eState Planner users, these clauses are automatically inserted when the trust company is selected as executor. No more cutting and pasting!
Lastly, the Will must then be reviewed by the Trust Company prior to execution, and the originals can be held by the Trust Company.
If you would like to watch the full recording of the webinar, you can do so here.
Thanks for reading!