Power of Attorney vs Executor in Ontario: Key Differences

People often mix up a power of attorney and an executor, or assume one person can do both jobs at any time. In fact the two roles cover different periods: one while the person is alive, the other after death.

This article focuses on a continuing power of attorney for property and compares it with the role of executor (estate trustee) in Ontario.

When each role applies

A continuing power of attorney for property ends when the grantor dies. From the date of death, the estate trustee named in the will, not the attorney, deals with the deceased's property.

So an attorney acts during the grantor's life, and an executor acts after death. If you hold a power of attorney, you generally cannot keep using it to manage the estate once the person has died.

Side-by-side comparison

How each is paid

An attorney under a continuing power of attorney for property may take annual compensation from the property in accordance with the prescribed fee scale. That scale is 3% on capital and income receipts, 3% on capital and income disbursements, and three-fifths of 1% of the annual average value of the assets as a care and management fee.

An executor is not paid under that scale. An estate trustee is entitled to a fair and reasonable allowance for care, pains, trouble and time, as allowed by a judge, unless the will fixes the allowance. Where a lawyer is the trustee and provides necessary professional services, the allowance may be increased to reflect those services.

An executor who takes compensation before passing accounts (a "pre-take") may do so only with the agreement of all interested persons who are sui juris, with court approval, or where the will provides for it. If the court later approves a lower amount, it can order the difference repaid to the estate. Executor's fees are also taxable.

Duties after death

Estate trustee duties include finding the will, winding up the deceased's affairs, paying taxes, bills and other debts, and distributing what remains to those entitled. A person named as estate trustee does not have to act, and if they decline or cannot act, the beneficiaries may nominate another person. A named executor who renounces is treated as if they had never been appointed, but an estate trustee who has already started acting generally needs a court order to step down.

• The estate trustee must make sure the deceased's tax returns are filed and any balance paid before distributing the estate.
• Within 180 calendar days of receiving a certificate of appointment, the estate trustee must file an Estate Information Return with the value of the deceased's assets at death.
• Distributing without a clearance certificate can make the representative personally liable for unpaid tax, up to the value distributed.
• A trustee who believes an expense is properly incurred in carrying out the trust may pay it from trust property, or pay it personally and recover the same amount. The Superior Court of Justice may later disallow it if it was not properly incurred.

Accounting and oversight of an executor

Ontario has no statutory requirement for estate trustees to pass accounts at fixed intervals, and they may choose not to unless the court compels them. Any person who appears to have a financial interest in an estate may move for an order requiring the estate trustee to pass accounts.

To apply to pass accounts, the estate trustee files the accounts verified by affidavit (Form 74.43), a copy of the certificate of appointment, and any latest judgment on a passing of accounts, and the court then issues the notice of application (Form 74.44). The notice and a draft judgment must be served on every person with a contingent or vested interest at least 60 days before the hearing date if served in Ontario, or at least 75 days before if served outside Ontario.

A beneficiary who objects must serve and file a notice of objection (Form 74.45) at least 35 days before the hearing date. On a passing of accounts, the judge can inquire into complaints by interested persons, including misconduct or neglect causing loss, and may order payment to the estate.

What to do next

• If you hold a power of attorney: keep your accounts, and stop acting under it once the grantor has died.
• If you are named executor: think about whether to act before you start, since a named executor need not act and may renounce, but stepping down after acting generally needs a court order.
• Gather the will, the list of assets and recent tax information.
• Speak with a lawyer about the certificate of appointment, and with an accountant about the final return.

Frequently asked questions