THE BENEFITS OF EXECUTOR INSURANCE FOR LAWYERS

If a portion of your practice is to take on the role of the executor and be remunerated for the work you'll do handling the estate and dealing with all the different steps, executor insurance will be extremely valuable to you for the reasons listed below.

If taking on the role of the executor for your clients is NOT what you do, but instead on focus on drafting their wills and other legal documents, then you will still find value in the Executor Insurance, which details are listed on the "Executor Insurance" page.

PROTECT YOURSELF AGAINST MISTAKES NOT COVERED BY YOUR E&O, AND RECEIVE TAX FREE INCOME.

TELL YOUR CLIENTS TO BUY EXECUTOR INSURANCE

THREAT TO YOUR BUSINESS

If you're a professional executor, and relieve your clients with the headaches of dealing with an estate, you're going to open yourself to some risks that are not covered by your professional E&O. While any legal decisions that you make as part of the process would be covered under your existing E&O coverage, mistakes you make that are outside of your legal expertise like timing the sale of an asset (real estate or stock options for example), or assigning value to some of the items to be auctioned or given to the beneficiaries, could make you personally or professionally liable. By encouraging the testator to purchase the Executor Insurance, you'll be fully covered as the executor for these mistakes, and any legal fees that will result from potential mistakes will be covered too.

TAX FREE INCOME

As a professional executor, you probably are working towards managing 10 or 20 estate a year (or more), and the fee that you're charging for that work is taxable either to your corporation, or to you personally. The amount that is lost to the CRA can become significant, especially as you get busier and handle more estates. This could represent a significant part of your income, or your profit for that matter. With the executor insurance, you can get paid $20K, $30K or even $40K TAX FREE per estate, which will save you tens if not hundreds of thousands of dollars per year in taxes.

APPROVAL BY BENEFICIARIES

One of the biggest frustrations or complaints from the beneficiaries is the money that professionals like yourself are charging to handle the estate. While professional fees are usually well deserved, beneficiaries can still feel that they're being stripped of some inheritance money. With Executor Insurance, a portion or all of your compensation will come from an arrangement that was made prior to the death, which means that it will not be included in the estate and won't be seen by the beneficiaries as a reduction of their share.

The benefits of Executor Insurance for Professional Executors

As a professional executor, you’re going to get compensated for managing the estates of your clients, but CRA will take a good portion of that income.┬áHere is the approximate annual tax savings that the Executor Insurance would provide if you managed ten $1M estates at a rate of 4% in one year.

200000

Dollars Saved in Taxes