Ask MoneySense
We’re often told to have a valid will, but what if you have no close family or the people you would name live overseas?
To our surprise, several large Canadian banks provide executor and power of attorney (POA) services, though these offerings are not always easy to find on their websites.
We spoke with two banks and found their fees and service structures were broadly similar. We are working with our lawyer to finalize the paperwork and include the bank as an option.
After our appointed executor recently passed away, we urgently revised both our will and power of attorney. By naming a bank or trust company as the alternate if the first designee cannot serve, and specifying that the bank will manage everything if needed, we believe we have covered our bases.
I would welcome any practical information about using a Canadian bank or trust company as an alternate executor, alternate attorney, or as the primary executor and/or attorney.
—Gwenna
Naming an institution as executor or power of attorney
Every adult in Canada should have a current, legally valid will. The person or entity you name to carry out your estate is the executor, responsible for settling your affairs and distributing assets according to your wishes.
Often, people choose a spouse or an adult child as executor. But if you are single, have no children, or your closest relatives live abroad, choosing someone you trust can be difficult. Gwenna’s situation—having no obvious local candidate—is a common one, and naming a professional institution is a practical alternative.
The role and responsibilities of someone named in a power of attorney
A power of attorney, personal directive, representation agreement, or mandate appoints a person or entity to make financial or health-care decisions on your behalf while you are alive but unable to act. These documents are provincially governed and take effect during your life, whereas a will governs affairs after death.
When you name an individual as attorney or executor, they are not expected to handle every administrative task alone. They can — and often should — engage professionals such as lawyers, accountants, investment advisors or trustees to carry out specialized duties. The most important qualities in a chosen person are responsibility, integrity, and willingness to seek qualified help when needed.
If you prefer a professional, you can appoint an individual professional, a trust company, or a bank-owned trust arm. Trust companies are unique in law: they can hold property in trust, act as agents and serve as executors. Unlike a person, a corporate trustee does not die, move overseas, or change its mind; that permanence can provide continuity and reduce complications.
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Choosing a professional or corporate executor can make sense if you do not have a trusted family member nearby, if family members live abroad, or if your financial situation is particularly complex or contentious.
Should you name a non-resident in your estate documents?
Appointing a non-resident as your attorney or executor can add complications. Cross-border securities and banking regulations may restrict their ability to manage investments or access accounts. They may face tax reporting obligations in Canada or in their country of residence. In some provinces, a non-resident executor might be required to obtain an estate bond—essentially insurance that protects beneficiaries if the executor fails to fulfill duties properly.
Given these hurdles, naming a Canadian trust company or a bank’s trust division often avoids the complications of a non-resident acting on your behalf. A corporate trustee is typically better equipped to handle complex assets, tax filings and probate matters, and to liaise with professionals across jurisdictions when necessary.
The downside to naming a trust company
The main drawback to appointing a trust company or bank trust is cost. Corporate trustees generally require a signed fee agreement, and they may request specific wording in your will or power of attorney. Fees charged by trust companies can be comparable to the statutory or guideline compensation an individual executor might receive, but a professional executor can offer greater expertise and reduce time and stress for beneficiaries.
Some assets bypass the estate entirely and transfer directly to named beneficiaries—registered accounts such as RRSPs and TFSAs, insurance policies and jointly held property can pass outside probate if properly structured. While designating beneficiaries directly can speed transfers and reduce estate administration costs, it can also reduce your flexibility. Leaving assets to the estate and governing their distribution through your will often gives you more control, especially when you want the executor to resolve issues or make discretionary decisions.
Joint ownership with someone who is not a spouse can also create risks, particularly when that co-owner resides abroad. Naming a professional trustee can mitigate these risks by providing a neutral, qualified party to manage and distribute your assets.
In short, for someone without a clear family choice or who has relatives living overseas, a trust company or a bank’s trust division can be a practical and reliable option. It provides continuity, professional oversight and the ability to handle legal, tax and administrative complexities on behalf of your estate.
Jason Heath is a fee-only, advice-only Certified Financial Planner (CFP) at Objective Financial Partners Inc. in Toronto. He does not sell financial products.
Read more from Jason Heath:
- Can an executor borrow money to cover probate costs?
- Estate planning and trusts for a beneficiary with a disability
- The tax implications of working abroad for residents and non-residents of Canada
- Can an estate contribute to an RESP account?