Foreign Executors: Getting Around the Performance Bond

Many provinces and territories in Canada have wills and succession legislation that specify that any Personal Representatives* appointed in a Will who do not reside in the Testator’s jurisdiction (meaning a 'foreign executor") must post a performance bond with the Surrogate Court. What does a "Testator's jurisdiction" mean? Well, it means the province or territory where the maker of the Will (the Testator) lives. What is a "performance bond"? A performance bond is insurance to the court that the Personal Representative won’t flee the deceased’s jurisdiction with the estate assets and dupe the beneficiaries out of their inheritance. The performance bond is typically two times the aggregate value of the deceased’s estate and must be posted from the Personal Representatives own assets (not the estate assets).

If you want to appoint a foreign executor (personal representative) to administer your estate, the simplest way to overcome the bond requirement is to appoint another person who resides in the Testator's jurisdiction to act as a joint Personal Representative with the foreign Personal Representative. So if you live in Alberta and want to have your son who lives in British Columbia act as your Personal Representative in your Will, you could add your daughter in Alberta to act as a joint Personal Representative with your son and therefore negate the requirement for your son to post the performance bond with the courts.

Another important question to ask is: What is a joint Personal Representative and how do joint Personal Representatives make decisions?

A person can appoint two or more persons to act jointly as their Joint or Co-Personal Representatives. "Joint" and "co" are terms that are used synonymously in this area of law. "Joint" means that such persons appointed must act unanimously. Having joint or co-Personal Representatives has the potential to result in problems in administering the estate of a deceased if such persons are not in complete agreement with each other. The easiest way to avoid potential problems is to NOT appoint persons who do not get along to act as your Joint or Co-Personal Representatives.

Once you have decided to appoint joint Personal Representatives to negate the requirement of one of those Personal Representatives to post a performance bind, one should also include a clause that reads as follows:

• I am aware that because I have appointed my son, so-and-so, as my Personal Representative and he resides outside of the Province of XYZ, the Court may require the posting of a bond. I have the utmost faith in my son, so-and-so, as my Personal Representative and I therefore request that his appointment be made without the necessity of posting a bond.

It is important to note that there is one instance where a foreign Personal Representative can be appointed and act without having to post a performance bond with the courts. That instance is where the Personal Representative is also the sole beneficiary, because it is impossible to dupe yourself out of your own inheritance in that case. So lets say you reside in Alberta, you have one child, a son who lives in British Columbia and who will inherit your entire estate upon your death, you do not need to consider residency of your son when naming him as your Personal Representative in your Will.

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