An Executor is a legal term referring to the individual named by the writer of a will to carry out the directions contained in that will.
Brad Sinclair CPA, CA from Millards Chartered Accountants in Brantford
Brad Sinclair CPA, CA of Millards Chartered Professional Accountants specializes in estate planning and has an intimate understanding of the role of an Executor. He cautions clients that the position of Executor can come with unwanted responsibilities, especially when dealing with the estate of U.S. citizen who lived in Canada.
“There are circumstances when accepting the role of Executor which can place that person in financial harms way.”
It was noted in a recent Canadian Tax Foundation article that under certain circumstances, the Internal Revenue Service could hold an Executor or a beneficiary of an Estate personally liable for the deceased person’s unpaid U.S. Federal Income, Gift and Estate Tax, and for any interest and penalties thereon.
“It was also noted that if a U.S. citizen who lives in Canada does not file their U.S. returns, or if those returns contain errors, these rules may generate costs and burdens for the family members and the fiduciaries. This could also extend to penalties imposed for not filing the Report of Foreign Bank and Financial Accounts Report, also known as FBAR.”
Sinclair encourages taxpayers to carefully consider whether they should accept the role of Executor for a U.S. Citizens, Green Card holder or U.S. Residents.
“Accepting the title of Executor is a substantial responsibility under normal conditions. Accepting the role of Executor for someone with legal ties to the U.S. could have unseen implications so it’s critical to have a clear understanding of that persons standing with the IRS. Sometimes those standings are not apparent at first glance.”
Brad Sinclair’s practice areas include Estate planning and succession arrangements for owner-managed businesses as well as the design and implementation of tax minimization strategies for businesses and their owners.
If you have any questions about the responsibilities of an Executor or any other accounting challenge, please contact a Millards Chartered Professional Accountants office near you.
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