Being named as an estate executor is an honour; it shows that you are highly trusted, and perceived as responsible and competent. However, this responsibility can feel stressful. Administering an estate is very time-consuming and you may be forced to deal with skepticism or complaints from beneficiaries about the way things are being handled.
The information below should help guide you through some of the challenges that accompany this commendable, but complex task.
Funeral Arrangements
Arranging for the funeral of the deceased will usually be the first step you take as the executor, as it is your legal entitlement to determine the funeral. As long as funeral expenses are reasonable, problems do not usually arise at this stage. However, it is important to ensure that you read the deceased’s Will carefully, and ensure that the funeral is carried out in accordance with his or her wishes.
Probating the Will in Newmarket, Barrie or Richmond Hill
Your lawyer will advise you, but most of the time, it will be necessary to obtain probate from the court. In Ontario, putting a Will through probate is referred to as applying for a “Certificate of Appointment of Estate Trustee with a Will.” Such applications allow the court to declare the Will as the legally valid last Will of the deceased and, at the same time, recognize the named executor as the lawful estate trustee.
Where there is no Will, and you have stepped up to act as administrator for the estate, you will be applying for a “Certificate of Appointment of Estate Trustee Without a Will.”
Providing proof of your legal status as executor of the estate will generally be required when dealing with the deceased’s real estate and with financial investments that are not held jointly with another individual. Your lawyer will advise you what you need probate for based on your individual circumstances.
Notifying Beneficiaries and Institutions
As executor, you must review the Will, determine who has beneficial interests, and sort out who is entitled to what. Your status as executor should be made known to beneficiaries, the deceased’s financial institutions, and any other person or entity holding assets and liabilities of the deceased — this will help ensure that property of the estate is not dealt with or handled by anyone other than you.
It is important to have your authority as executor authenticated by the court and introduce yourself to the estate debtors, creditors and beneficiaries or heirs at an early stage. As sad as it is, in the frenzy that often accompanies a person’s passing, beneficiaries and others may become possessive, or overly eager to “see what they can get” from the deceased’s estate. It is important to establish your role as executor immediately, and inform all interested parties that you are in the process of interpreting and fairly administering the Will.
In unfortunate circumstances, you will be forced to deal with difficult beneficiaries. For this reason, it can be helpful to have a lawyer assisting you, on side from the start. A lawyer in Newmarket, Barrie, or Richmond Hill can help you to communicate in an effective manner and ensure you take the correct steps from a legal standpoint.
Ensuring Cancellation of Services and Subscriptions
One thing that is easy to overlook, but that should be done as quickly as possible, is to cancel the deceased’s ongoing services, subscriptions and monthly payments, including utilities, newspapers, internet and phone services. Be sure to keep insurance on real property or a business, however, until these assets are distributed. Unfortunately, where services are not cancelled, these companies are entitled to collect from the estate for amounts unpaid until the point of cancellation.
Paying Debts and Selling/Distributing Assets
Of course, one of the most crucial aspects of estate administration is ensuring that all creditors of the deceased have been identified and paid before the proceeds of the estate are distributed in accordance with the Will.
If estate assets are distributed before all debts are paid, recovering some assets to pay outstanding debts may be very difficult, if not impossible. An executor can be held personally liable for unpaid debts where he or she has distributed the assets of the estate without first accounting for debts. Although a Will should contain a list of any creditors to the estate, not every Will is professionally drafted. Further, where a Will was not updated in recent years, the deceased may have accrued and sold estate assets and debts since the Will was last signed.
Figuring out how to distribute the estate assets is no easy task. A lawyer can help in the following ways, among other things:
- collect, preserve and inventory the estate assets;
- prepare and obtain a Certificate of Appointment of Estate Trustee from the court;
- determine which assets to sell and how to handle the proceeds;
- advertise for creditors;
- review the payment of debts, including ensuring that a tax clearance certificate is obtained;
- carry out the sale of real property; and
- navigate distributing the assets.
If additional professional advice from an accountant or tax specialist is required, a lawyer will be able to advise/refer you on these matters as well.
Repercussions of Failing to Enlist Help
Where an executor fails to seek the required professional help to administer the estate, there can be significant repercussions. Below are a couple of examples from the Ontario courts.
In Mowry v Groome, 2016 ONSC 7850 (CanLII), the defendant executor was held personally liable to pay over $357,000 into the deceased’s estate, and was removed as executor. This amount represented estate monies lost due to unsuitable investment of the estate funds, penalties for failing to file income tax returns, and legal costs associated with defending him personally for failure to provide an accounting of the estate. Had he sought the professional help needed at an earlier stage, this situation could have been avoided.
In Batchelor v Radawez, 2015 ONSC 6764 (CanLII), the defendant executors failed to seek appropriate advice from legal and tax professionals, resulting in an unnecessary $200,000 tax payment being made out of the estate. The executors refused to concede that the plaintiff was the deceased’s legal spouse, and as such, RRIF monies that could have been rolled over to her on a tax-free basis ended up being subject to tax consequences. The executors were held liable for the loss.
Contact A Newmarket, Barrie Or Richmond Hill Estate Lawyer At Epstein & Associates
Being responsible for a loved one’s estate no easy task, particularly as you grieve your loss at the same time. Help to detach yourself and seek guidance from an experienced estate administration lawyer in our Newmarket, Barrie or Richmond Hill law firms. As an executor, we can refer you to other professionals you may require. Contact us at 1-866-463-2266.