Naming an Executor Who Lives Outside BC or Canada

Many BC will-makers want to name an adult child or trusted relative who now lives in Alberta, Ontario, the United States or overseas. That choice is allowed, and it is often the right one emotionally.

It still deserves a careful look. Where your executor lives can affect how quickly the estate moves, what paperwork is needed and, for an executor outside Canada, how the estate is taxed. A little planning in the will can avoid most of the friction.

Can your executor live outside BC?

Yes. The Wills, Estates and Succession Act (WESA) does not require an executor to live in British Columbia, and the BC Supreme Court can grant probate to an executor who lives elsewhere. The more useful question is whether the person you have in mind can do the job well from where they are.

An executor's work is hands-on: finding the will and assets, dealing with banks and the Land Title Office, securing and selling property, filing tax returns, paying debts and finally distributing the estate. Our guide to executor duties in BC sets out the steps. Each one is harder at a distance.

Is a bond or other security required?

People often hear that an out-of-province executor must post a bond. Under WESA, the rules on security are narrower than many expect.

Section 128 of WESA deals with security for the administration of an estate, and it applies to an applicant for a grant of administration, which is what a court issues when there is no will or no executor able to act. Even then, no security is required unless a minor or a mentally incapable person without a representative has an interest in the estate, or the court orders security on the application of a person interested in the estate.

An executor named in your will applies for a grant of probate, not administration, so section 128 does not set a security requirement for them simply because they live elsewhere. The court rules follow the same line: the notice sent before an application tells recipients they may ask for security only where the application is for a grant of administration. If your named executor cannot or will not act and someone else applies to administer the estate under the will, the security rules can come into play. That is one reason to name an alternate.

The tax question: where is the estate resident?

For income tax purposes, an estate is treated as a trust, and the Canada Revenue Agency's guidance says a trust is resident where its central management and control actually takes place. The residence of the executor is not always decisive, but it matters, because the executor usually makes the key decisions.

If the only executor lives outside Canada and makes the decisions from there, the estate may be treated as resident outside Canada. Where there are several executors in different places, the CRA looks at where the more substantial management and control is exercised. A change in the estate's residence can bring tax consequences and extra filings, and they are easier to avoid in the planning stage than to fix later.

An executor in another Canadian province raises fewer federal tax concerns, though the practical issues below still apply. This is an area where your lawyer and your accountant should talk to each other.

Practical issues to think through

Distance affects day-to-day administration in ways families often underestimate:

• Sworn documents. The probate application includes affidavits, and an executor abroad has to swear them before an official the BC registry will accept. Our article on signing BC documents from outside Canada explains the options.
• Banks and land. Financial institutions and the land title system may ask for identity checks and original documents that take longer to arrange from another country.
• The house. Someone has to secure, insure and eventually sell a BC home. That is difficult to manage across time zones.
• Tax clearance. The executor should get a clearance certificate from the CRA before final distribution, as our article on the CRA clearance certificate explains. Delays in getting it are common, and they are worse if the executor is hard to reach.
• Cost. Travel, couriers and local help add expense, which comes out of the estate.

Ways to make it work

You do not have to choose between the person you trust and practicality. Common arrangements include:

• A BC co-executor. Naming a local co-executor alongside the person abroad can keep decisions and paperwork in BC. Think about how they will make decisions together and what happens if they disagree.
• A strong alternate. Name an alternate who lives in BC, so there is someone ready if your first choice steps aside.
• A professional executor. A trust company or other professional can act alone or with a family member, usually for a fee set out in an agreement.
• Clear powers in the will. Well-drafted powers to sell, invest and hire advisers make long-distance administration easier.

Our article on choosing an executor in BC covers the broader factors, such as reliability, family dynamics and compensation.

Review the choice when circumstances change

An executor who lived down the street when you signed may since have moved abroad. Review your will when a named executor changes country or province, and ask whether the arrangement still works. A short codicil or new will is far simpler than leaving your family to sort out a difficult administration.

Thinking of naming someone who lives far away? Plan the arrangement before you sign

Our wills and estate planning lawyers can review who you want to name, suggest a workable co-executor or alternate arrangement, and prepare a will that suits a family spread across provinces or countries.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.