Estate Probate and Executor Duties

Explanation of Executor/Administrator Estate Duties

 

General Information

 

As an executor, you have a number of tasks to complete, and you should know that these can be divided into two separate categories. Set out in this aticle are the areas in which you may require some legal assistance.

 

Probate Services

 

This occurs when there is a requirement that the estate be officially designated with the person in charge of the estate (administrator), and that the official document (last will), be recognized by the court system.

 

The documents that come from court are called the Certificate of Administration of Estate Trustee With a Will (or Without a Will if there is no will). This Certificate can be relied on by banks or other institutions that may want to this document in place before paying out funds, or it may be relied on for the transfer of property. Not all estates require this document, because there may not be a specific situation that warrants the cost of obtaining the court filed document.

 

In conclusion, the legal services for the application for probate (Certificate of Administration of the Estate) are related solely to this application, and thus they are kept separate from other legal services which will be described below.

 

Executor Services

 

This is where the executor, who is in charge of the estate, even though there may not be an application for probate, has a number of tasks that need to be completed. They are also entitled to engage other professionals, such as lawyers or accountants, to complete some of these tasks. These are essential tasks to comply with government obligations.

 

Recovering Your Costs and Being Paid for Your Services

 

The executor has a number of tasks to complete, (or if there has been Probate, the title of the person is also that of Administrator of an Estate with a Will), and there is both time and perhaps expenses incurred in this process.

The executor/administrator should keep track of the time that they spend working on the various tasks, and the expenses they incur, whether that be for travel, long distance phone calls, or any other related expenses, as these amounts may be deducted from the funds of the estate.

The amounts deducted from the estate, as direct expenditures, are then under the category of “reimbursements.” However, there may be charges to the estate for fees for time spent, or fees for services.

If there are fees, then they would be income that Canada Revenue Agency would be of the view that should be reported on an income tax return for that year. That is not the same as recovery for actual expenses.

 

Executor Tasks to Be Completed

 

What is set out below is a list of tasks that may apply to an estate. Some of these may have already been completed. However, you will see that there is a numbered reference to each, so that you can report about the situation by referencing the same number as set out below:

 

  1. Locating the will. What is needed is the original will with the Affidavit of Execution, and a lawyer can make a Notarized Copy of the Will. That way, it is the equivalent of an original, and if a bank or other institution wants a better version than just a photocopy, then they receive a Notarized Copy
     

  2. Arranging the Funeral. There are a number of services and costs that need to be coordinated. The receipts for these should be made available as part of the record-keeping.
     

  3. Obtaining the death certificate. This is often provided by the funeral home. There may be numerous originals made available. Original should be provided to the lawyer.
     

  4. Collecting personal and business documents. This would include drivers licence, passport, health card, and all other personal or identification documents.
     

  5. Opening an estate account. This is a new account, which a bank will open, and allow for funds to be collected in this account for the estate. It is preferable that the account be at one of the banks where the person was banking already. The Bank may allow for some payments out of that account, if the payments are made directly. This could include for the funeral expenses, or other specific amounts. It may also include the amount that must be payable to the Ontario Government, if there is filing with the court for probate of the will, or for Certificate of Estate Truste.
     

  6. Identifying all assets. This involves the collection of all bank accounts, investments, items in safety deposit boxes, cash on hand, jewellery, or other items of value.
     

  7. Protecting assets. This involves making sure that there are the items that are identified as assets, and that they are protected, both in terms of security, and in terms of insurance. For example, if there is an automobile, or a home, the insurance company should be notified of the situation.
     

  8. Paying debts. This involves locating all credit cards, or other expenses. Some of these might be ongoing expenses for insurance or for utility bills, and they should be kept current.
     

  9. Transferring debts. The executor or administrator of the estate should have the debts changed into their name in due course, or at least notification given about new addresses for sending bills or accounts, if necessary. The objective is to make sure that all debts are identified and paid as required.
     

  10. Notifying Government Agencies. There needs to be documents sent in to the Government agencies, whether it be a drivers licence, health card or other locations so that the government is aware of the situation. We have addresses and methods of forwarding these materials of these obligations are met.
     

  11. Applying for Death Benefits. The Canada Pension Plan, should be notified of the death, and there should be appropriate application made to deal with the death benefit.
     

  12. Obtaining previous income tax returns. There will have to be to returns completed, one of them being a return that is a regular return, but instead of the end of year (December 31), it will be the date of death. The second return is a terminal return, which must be a return completed within a few months of death, and this return will have to deal with all final items in terms of the full reporting to Canada Revenue Agency the value of items. This is a more complicated return and an accountant may be needed.
     

  13. Notifying Beneficiaries. The beneficiaries need to be informed about the death, and information provided about the inheritance that they will be receiving.
     

  14. Dealing with life insurance policies. The appropriate documentation will have to be sent to the life insurance holders, and this may also apply to other direct beneficiaries, such as Registered Retirement Savings Plans.
     

  15. Dealing with Special Interests. This may include a business that someone was operating, as they may have a small business or a private business. There may have to be some reporting to government agencies. There could be at tenant or some other special interest or activity that needs to be considered. They can hold a position on a committee or board. They may have records of a business if they are in such a position. Thus, information must be gathered, and supporting documents, relating to any special interest for further review.
     

  16. Looking after Dependents. There may have been obligations to pay support, or provide financial assistance, or even voluntarily making contributions to a church or other organization. This needs to be considered and any documents on these topics need to be reviewed.
     

  17. Determining the value of the estate. An estate report should be assembled, showing the value of each of the items that it is in the estate. The debts would then be shown as payment out of the estate. There may be some interest on some investments on the estate. There may be some expenses related to the administration of the estate. Ultimately, this is set out in detail, so that there is a determination as to the net amount in the estate, which is then the amount that is available for distribution.
     

  18. Distributing the estate. This is where the funds are paid out, subject to making sure that all taxes have been paid. It is coordinated with a Tax Clearance Certificate, so that the administrator confirms that all of their obligations have been met from funds of the estate, and that calculations have been properly made. This process often takes about 1 year from the date of death, and the time that is allowed for this to occur is then called the “executor’s year.” The beneficiaries can anticipate it may take that long, and cannot really complain if it is taking up to the one year. However, after the one year. It is for the executor or administrator to be able to explain the complication that has not allowed for the estate to be distributed within the year.

 

Services Provided by DeRusha Law Firm

 

We will assist in the sending out of letters, assembly of materials, the reporting period, we will attempt to have these task completed, without the necessity of obtaining a Certificate of Administration of the Estate, if the holders of the funds or property, will allow the distribution to occur in that manner. However, if there needs to be a certificate obtained, we will provide legal assistance in completing the forms, and filing materials, and obtaining the certificate.

 

 

Contact us today to request a free 1/2-hour consultation: (905) 625-2874

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