Yes — under British Columbia law, there is no requirement that an executor be a resident of Canada or of the province. Many people name an out-of-province or international family member as their executor, and that choice is entirely valid. That said, appointing a non-resident executor introduces tax and administrative considerations that don’t come up when the executor lives in BC, and it’s worth understanding them before you finalize your estate plan.
Estate Residency vs. Executor Residency
It’s easy to conflate the residency of the person who has died with the residency of the executor, but for tax purposes they’re treated very differently.
For tax purposes, an estate is considered to be resident wherever the executor of the estate is primarily resident. The estate trust encompasses any income and/or capital gains that arise after the date of death and if the executor is not a Canadian resident, the tax returns for the trust must be filed in the jurisdiction where the executor resides.
Key Tax Considerations
There are a few important things to consider when appointing a non-resident executor. To begin with, the trust will be subject to tax reporting requirements in the jurisdiction in which the executor resides which may be different than the tax requirements in Canada and could result in higher taxes payable by the estate which in turn means less residue to divide among the beneficiaries of the estate.
Additionally, where an executor wishes to split the tax burden between the estate and the beneficiaries, they can no longer do so if it is a non-resident trust and the beneficiaries are Canadian.
An estate may also be liable for capital gains tax if the residency of the estate changes during the administration of an estate, for example, if the executor changes his or her place of residency or if someone else takes over the administration of the estate who is not a Canadian resident.
Administrative and Practical Challenges
Non-resident executors may need to travel to BC to deal with real property, meet with financial institutions, or attend court, and Canadian banks sometimes require extra identity verification for account holders living outside the country, which can slow down administration.
The Alternative: A Canadian Executor or Trust Company
For all of these reasons, it is usually favourable to appoint an executor who lives in Canada or as an alternative, to appoint a Canadian trust company as executor and trustee. When considering appointing a non-resident executor, it is worthwhile to seek the advice of an accountant who is familiar with domestic and foreign tax laws.
Frequently Asked Questions
Can a non-resident be an executor of a will in BC?
Yes. BC law does not bar a non-resident from acting as executor, though as outlined above, it can add tax and administrative complexity to the estate.
Does a non-resident executor need to post a bond in BC?
The court has discretion to require security (a bond) from an executor who doesn’t reside in the province, particularly where there’s a concern about enforceability. Whether a bond is required depends on the specific circumstances of the estate.
What happens if my named executor moves out of the country after I’ve made my will?
The tax and administrative issues described above apply at the time your executor actually administers your estate, not when the will was signed. If your executor’s residency has changed since you named them, it’s worth revisiting your estate plan with a lawyer.
Can I appoint a Canadian trust company instead?
Yes. Many people appoint a trust company as executor and trustee specifically to avoid these complications, particularly for larger or more complex estates.
Talk to an Estate Lawyer About Your Executor Choice
Choosing the right executor is one of the most important decisions in your estate plan, and residency is just one factor to weigh. If you’re considering a non-resident executor, book a consultation with our office to talk through what makes sense for your estate.
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