What is an “executor”?
An “executor” is a personal representative who is responsible for distributing the estate (property, assets, possessions) of an individual according to the wishes outlined in their Will.
Now, we understand that this is a lot. Discussing wills, and especially death is never an easy subject. But that’s why it is important to reach out to a professional for assistance – even just mediation. For now, take a read through our guide below:
What Are the Key Executor’s Duties?
There are a number of important responsibilities of an executor, which can be summarized as follows:
- The executor needs to have access to the Will.
- The executor must review the Will, make sure that nobody else has access to any of the property, and notify the next of kin and beneficiaries.
- The Will must be “probated”. That is, in order to administer the estate, the executor must be able to prove to the world that he or she has the legal authority to do so.
- The executor is, by default, expected to make funeral arrangements and pay for funeral expenses out of the estate (funeral arrangements are often laid out in the will)
- The executor must make an inventory listing of the property in the estate and the value of the property.
- The executor has the responsibility of protecting the property of the estate. They must ensure that all valuables are kept safe and that the property is fully insured.
- Until the estate is distributed, the executor must keep the money and investments in the estate properly invested. They must choose low-risk investments, as beneficiaries could sue the executor for making bad investments and reducing the value of the estate before it is given to them.
- Once the estate has paid all the debts and taxes, the executor is able to distribute the property to the beneficiaries.
- Finally, the executor must provide detailed accounts to the beneficiaries including a detailed list of everything that was received and paid out by the estate.
This list is incomplete, and the executor’s duties will vary according to the complexity of the testator’s estate. On average, it takes about one year to fully carry out the duties of a simple estate. It is advisable to get legal assistance to help you throughout the process of estate administration.
Do You Have the Latest Version of The Will? And what does “Probate” Mean?
The first step is to make sure you have the most recent version of the deceased person’s will and that you are named as the executor. If you do not have the will, check with the deceased person’s family, friends or lawyer.
Probate is the process by which a Will is legally approved by the courts. It also refers to the required documentation and includes the legal confirmation of the appointment of the executor of the Will.
Not all Wills have to be probated. It depends on various factors such as the complexity of the estate, the amount and nature of assets, the number and nature of beneficiaries, etc. However, in practice, most estates end up going through the probate process.
If there is any possibility that the legality of the Will is in question, or that there could be contention over any statements contained within the Will, then the Will should be probated.
Fill Out Registration of Death Form and Obtain Death Certificates
Certain parties such as the Land Titles Office and financial institutions will require copies of the death certificate in order to release assets. You can obtain the certificate from the funeral home or a provincial Vital Statistics Office.
Inform Parties of The Estate Distribution
The executor is required to inform all parties who may legally have a claim to the deceased person’s estate upon the death of the individual. These parties may include:
- beneficiaries of the estate;
- co-owners or beneficiaries of assets;
- landlord and insurer of the deceased’s home;
- financial institutions and banks that the deceased dealt with;
- government agencies such as the Canada Revenue Agency and Canada Pension Plan;
- insurers of the deceased’s home and vehicle;
- internet, phone and utility providers; and
- subscription providers.
List Estate’s Assets & Debts and Pay Outstanding Taxes & Debts
As an executor, the executor’s duties dictate that you are responsible for listing and determining the value of the deceased individual’s assets and debts. You can do this by reviewing documents such as tax returns, obtaining property title documents, speaking with insurers about insurance policies, and contacting former employees to obtain information about pensions.
Assets of the deceased often include:
- employment benefits and unpaid wages;
- life insurance policies, pensions, and death benefits that are payable to the deceased’s estate;
- real estate and other investments contents of a safety deposit box; and
- the property that is left after debts are paid.
Remember that some assets will not form part of the estate. For example, if the testator owned property in joint tenancy with another owner, the property will pass directly to the other owner. Also, life insurance policies, RRSPs or other assets that have a named beneficiary will pass directly to that beneficiary.
Executors should record any outstanding debts and when they must be paid. Remember to record interest rates, payment frequency and registration information. The executor is responsible for ensuring that the testator’s debts are paid prior to distributing the estate.
The executor is also responsible for determining how much tax the deceased owes and that taxes are paid out before distributing the estate to beneficiaries. A tax return must be filed with Canada Revenue Agency for all income earned in the year the deceased passed away. Once the tax return is filed and taxes are paid, the executor must obtain a clearance certificate from Canada Revenue Agency as proof.
At this stage, you should meet with a wills and estates lawyer to address any issues with probate and make sure all assets and debts are accounted for.
Make Sure the Deceased Person’s Assets Are Managed and Safe
While this may sound straight forward, it can be a challenging task. For example, if the deceased person has a business, the executor must ensure that someone is running the business properly or consider selling it. If the deceased was renting a property, it is also the executor’s responsibility to communicate with the landlord and make sure someone is supervising the vacant property.
Because the executor is responsible for any damages or losses of the assets, the executor should visit the deceased’s home and make sure that:
- arrangements are made to keep the deceased person’s home, vehicle, and valuables safe;
- credit cards, utilities and insurance policies are cancelled;
- mail is redirected; and
- cash and other valuables in the home are stored in a secure manner.
If not done in accordance with the law, this can be a daunting and challenging endeavour. Be sure to make use of professional advice to protect yourself and fulfill the legacy in the will.
Being named as an Executor can be an honour and a way to complete a final act for someone you cared for.