There are numerous duties that an executor or an administrator has to perform. It can be an onerous task, requiring time, skill, commitment and human relations ability. It is important to have an understanding of how the probate process works. It is relevant whether you are considering selecting an executor or have been asked to be an executor.
Here is a brief summary of the various steps. The following guidelines are general in nature, as there can be provincial variation, as well as different terminology and procedures.
Locate and Read Will
If you know you have been named the executor of a will your first obligation is to obtain the original of the most recent will of the deceased. Hopefully the testator has informed you where the will and other important papers are kept to assist you in your job as executor. If not, you must make a search of all the likely places where the deceased may have kept important papers and records to determine if the deceased left a valid will.
Obtain the Death Certificate
You should apply immediately upon the testator’s death for a death certificate, usually obtained from the funeral home director. This certificate is required to legally prove the death of the deceased and takes approximately one to two weeks to receive.
Make the Funeral Arrangements
Contrary to popular perception, the executor, and not the deceased or any surviving family member, has the right to determine how to dispose of the deceased’s body. Any instructions regarding burial arrangements contained in the deceased’s will are not legally binding on the executor.
Arrange Immediate Funds for Survivors
The deceased’s assets are immediately frozen until the Grant of Letters Probate is received which legally entitles the executor to deal with the assets. However, depending on the circum-stances, the bank may be able to make arrangements if this causes any problems.
The most obvious source of funds is from assets that pass outside of the estate and are therefore not frozen, such as bank accounts, property held in joint tenancy or property owned by a legally designated beneficiary.
Notify Beneficiaries and Others
You are normally required by law to notify certain persons who have or who may have an interest in the estate that you will be applying for a Grant of Letters Probate and what, if any, their entitlement is under the will. Even where a will exists, anyone who could make a claim to the estate or the validity of the will must be notified. A notice of intent to apply for probate with a copy of the will attached may be required to be sent to any of the following persons and additional persons. Check for the current legal requirements from a lawyer in your province, as the following are general guidelines only.
- Beneficiaries and Alternate Beneficiaries
These people should be notified even if the property referred to in a specific bequest no longer exists and there is really no actual gift to that beneficiary.
There would be individuals who would be entitled to inherit under an intestacy or partial intestacy. The reason for sending notice to this class of persons is that even if a will exists, it may be found invalid.
- All Persons Entitled Under Provincial Wills Variation Legislation
That means any surviving legally wedded spouse and all children of the deceased. This category includes a spouse who is separated or where divorce proceedings are in process, but not complete.
- Common-law Spouse of the Deceased
You need to exert your best efforts to locate this person if he or she was no longer living with the deceased, as the common-law spouse could still have legal rights to a claim.
Prepare a List of Assets and Liabilities
One of the major tasks of an executor is to prepare a complete inventory of all the deceased’s assets and liabilities, including their value, as of the date of death. This information is used in preparing the Disclosure Statement which must be submitted in your application for a Grant of Letters Probate. Only those assets and liabilities that make up the deceased’s estate must be listed on the form. Any assets that pass outside of the estate by right of survivorship under joint tenancy or by the designation of a named beneficiary, do not have to be included in this document.
Protect the Assets
As executor, one of your most important duties is to ensure the deceased’s assets are protected from loss, theft or destruction until they are sold or distributed. If you fail to properly protect the assets and the estate suffers a loss, you may have to make good that loss.
Advertise for Creditors
It is recommended that you publicly advertise for any creditors who may have a claim against the estate. By advertising, you can legally protect yourself from any future claims creditors may make after you have distributed the estate.
Apply to Probate the Will
Apart from a few exceptions, in most cases you will need to arrange for probate of the will. The sooner you apply for probate, the sooner you will be able to legally deal with the deceased’s assets and be able to transfer property and distribute the estate.
Prepare and File Income Tax Returns
You have heard the old saying that “There are only two things certain in life – death and taxes.”The primary type of taxes payable by the estate of the deceased are income and capital gains taxes. The executor is responsible for filing income tax returns on behalf of the deceased taxpayer and the estate. The topic of tax filing requirements and related tax issues are covered in other chapters.
Pay Debts and Expenses
You can’t distribute the estate to the beneficiaries before you pay all outstanding debts of the deceased, funeral expenses, and the expenses of administering the estate and income taxes. Administration expenses include, for example, the cost of probating an estate, safeguarding the assets, correspondence conducted on behalf of the estate, any legal and accounting fees, and your fees as executor. With large estates, and to avoid personal liability, it is customary for the executor(s) to obtain a Tax Clearance Certificate from the CRA, certifying that all income taxes owing by the deceased and the estate have been paid.
Distribute the Estate
Once you have performed all the above duties, including obtaining a TaxClearance Certificate from the CRA if considered necessary, you can arrange for the settlement and distribution of the estate. Before distributing the residue of the estate, you should pay out any cash legacies and transfer or deliver specific property gifted under the will. If there is insufficient cash avail-able to pay the cash legacies you will need to sell or redeem other assets.
Keep Accurate Records
You are accountable to the beneficiaries for the assets of the deceased, any monies which you received and all assets and monies which you distributed or paid out on behalf of the estate. It is therefore essential that you set up and keep accurate and complete accounting records, which are supported by invoices and receipts. A statement of accounts must be reviewed and approved by all beneficiaries before they provide the executor with final releases discharging the executor upon the final distribution of the estate. Beneficiaries who are minors cannot approve the accounts, and the executor will have to pass his or her accounts if there are concerns or he or she wants a release or discharge. Then parents or guardians cannot sign for them. It is also possible to wait until the minor is an adult. He or she can approve accounts then and release the executor/administrator.
Fees for Executors
The amounts set out by provincial legislation are the maximum limits for these fees and are not necessarily the actual fees that will be allowed. In other words, you may not be entitled to the full percentage by law. In determining the appropriate executor’s fee the following factors must be considered:
- the size and complexity of the estate
- the care and responsibility involved
- the executor’s skill and ability
- how well the executor has administered the estate and whether the value of the estate has been increased
- the amount of work and time required in performing the executor’s duties.
Unless your fee has been provided for in the will, you must propose one to the beneficiaries who in turn must approve it. If the beneficiaries do not agree with your fee, and you are unable to negotiate a compromise, you will have to pass your accounts before the court.
When determining the executor’s fee, the overall amount that can be charged is the same whether there is an individual executor or co-executor. Where there is more than one executor, the executors must decide among themselves how they will share the fee. If they cannot agree, they will have to apply to the court to settle the matter. The fee for a trust company is usually larger than the fee for an individual person because a trust company usually offers more expertise and has more resources available.
