Many people who live in Canada may have trusted friends or family in another country. When developing estate plans, it can be tempting to name their most trusted and reliable loved ones as executors, regardless of their location and residency.
While the individual may be a good fit for the job, there is a great deal of complexity that British Columbia individuals and families may face when they name someone outside the province, or even the country, to oversee their estate administration.
The first concern is financial. As a non-resident, the executor will be categorized differently than a resident would for tax purposes, even if the estate is located in Canada. This means the estate will face higher taxes if funds need to travel through the non-resident to beneficiaries, even if those individuals live in Canada.
In addition to tax issues, provinces may require an estate bond to ensure assets are properly taken care of, since legal repercussions are often unenforceable across borders. In addition, a foreign executor will not be able to oversee certain tasks that require being nearby, such as taking care of a house or physically signing paperwork.
Despite all this, there are some cases in which a person who does not live in British Columbia or Canada may still feel like the best option. In such situations, it can be helpful to consider a local co-executor. Alternatively, corporate executors or trust companies could help fill in the gaps. In any case, situations like this should be looked over by an estate planning lawyer based in the province to ensure proper adherence to all provincial laws.