When it comes time to pick an individual to oversee the distribution of a will or trust, many people consider a third-party professional instead of a family member or friend. While it may seem natural to name those with a financial background to this role, it is important to take a closer look at one’s title and designation before selecting executors or trustees. An Ontario mutual fund dealer recently landed himself in hot water when he improperly took on two clients’ estates as co-executor and trustee.
The Toronto-based mutual fund dealer has been permanently banned from the industry after it was found that he became the executor of two clients’ estates after both passed in 2011. This is against the rules of the Mutual Fund Dealers Association of Canada (MFDA). It was also contrary to the agreement between the dealer and his employer.
Along with being named to execute multiple clients’ wills, the mutual fund dealer was also left as the beneficiary for one deceased client’s Air Mile points. The 3,054 worth of points were valued at less than $500. By contrast, the individual has been handed a $40,000 fine and $5,000 in costs from the association, of which he is no longer a member.
It may seem like second nature to name trusted financial advisors as executors, especially if a will is particularly complex or if no family wants to take the responsibility. However, picking the right kind of professional for this job is critical in order to avoid conflicts of interest or legal scrutiny. Speaking with an Ontario lawyer about these decisions and clarifying who can take these positions is an important first step.