Handling an Estate is a project. My offices can do as much or as little of the organization and services for you, which you as an Executor are bound by law to carry out. Corporate Executorship is also available for extremely complex estates but comes with significant fees. You may wish to review RBC services by clicking here.
An initial meeting between all executors, the estate lawyer and my project manager is recommended to discuss the scope of the work required including reviewing the will, the contents of the estate, projected timelines for administering the estate, areas of concern, asset protection, documentation required for probate of the will, etc.
Prior to the meeting, the executors should review and attempt to answer the questions listed in Appendix A to this proposal, which summarizes the information required for the estate to be administered. The executors should also review Appendix B, which is a summary of "Executors Tasks and Responsibilities". This can be considered a "checklist" of the tasks that need to be carried out or considered by the executors, and can help to determine which specific tasks will be the most time consuming, contentious, or difficult.
Depending upon the complexity of the estate and the wishes of the executors, it will be possible to develop a specific list of services to be provided that can be used as a terms of reference administering the estate.
After reviewing the complexity of the estate and the extent to which the executors require help, it will be possible to estimate the number of hours' work that will be involved in helping to organize and administer the estate.
Typically, the Executor Services costs are paid out of the Executors' compensation, so it is worthwhile to estimate the overall value of the estate and determine how much compensation will be available to the executors. See Appendix C for more information about executor compensation.
Progress Reports and Invoices
It is proposed that regular progress reports be prepared and submitted to the executors together with invoices for the services provided. This can be on a weekly, bi-weekly or monthly basis, depending on the wishes of the executor(s) and the complexity of the estate.
Appendix A: Information Required
The following is a summary of some of the pieces of information that will be important in administering the estate. The questions below should be reviewed prior to our meeting.
Personal Information About the Deceased Please give all relevant personal information about the deceased including:
- Full name
- Date of birth
- Date of death
- Did the deceased have a will?
- Was the deceased:
- Married? When? To whom?
- Divorced? When?
- Did the deceased have any known children? Please list names, dates of birth and the name of the other parent if different from the name of the spouse listed above.
- Did the deceased have any other dependents?
- Was the deceased employed at the time of death? Where?
- Did the deceased own any businesses? If yes, please provide details.
Assets and Liabilities in the Estate
- Did the deceased own a house or other primary residence? If so, please give its address, and indicate whether there are any other owners listed on the property's title.
- Did the deceased own any cottage property? If so, please describe it and indicate whether any other names appeared on the title.
- Were there any mortgages on any of the above real estate holdings? How much and with which institution.
- Please list all bank accounts, investment accounts, individual stocks or securities, etc., owned by the deceased at the time of his/her death and indicate whether they were jointly owned with anyone else.
- Please list all RRSP / RRIF investment accounts held by the deceased at the time of his/her death. Did he/she name a beneficiary on these accounts?
- Please list all life insurance policies held by the deceased and indicate who was named the beneficiary of these policies.
- Please list all credit cards held by the deceased.
- Please list all loans held by the deceased.
- Please list all vehicles owned by the deceased.
- Did the deceased own any property, investment accounts, etc., in the United States?
- Did the deceased own any property, investments, etc., in foreign countries other than the United States?
- Please describe any other valuable items owned by the deceased such as antiques, artwork, furniture, electronic items, etc.
- Are there items of sentimental value that will need to be distributed among family members? Please describe.
Other Relevant Information
- Do you know of anyone who is not specifically named in the will but who might make a claim against the estate? What would be the grounds of that claim?
- Are there any dependents of the deceased who have immediate financial needs as a result of the death?
- If so, who is currently looking after these children and does the will name a guardian for these children?
- Do you know anything about the beneficiaries of the estate that might be relevant in executing the estate? (For example, are any of the beneficiaries mentally incompetent, addicted to drugs or alcohol, etc.?)
- Do you know of any personality conflicts among the beneficiaries that might have an impact on your responsibilities as an executor?
- Where are the beneficiaries of the will physically located?
- Do you have any other concerns about the estate, other than those discussed above?
Executors' Interpretation of the Will
- Please describe all of the specific bequests listed in the will. Please indicate to whom the "residue" of the estate is directed. Are there assets (such as household furniture, silverware, etc.) that will need to be distributed between or among 2 or more beneficiaries?
Appendix B: Executors' Tasks and Responsibilities
- Obtain deceased's identification and credit cards.
- If the deceased was employed at the date of death, advise their employer of their death.
- Locate most recent Will and any codicils or memoranda.
- Arrange the funeral service and burial/cremation.
- Obtain ten original death certificates from the funeral home.
- Review the deceased's financial affairs and begin a list of relevant information. Complete list as information becomes available and update as required.
- Provide the beneficiaries named in the Will with a copy of the Will or relevant portions.
- Take steps to meet any immediate financial needs of the deceased's dependants.
- Determine whether it will be necessary to probate the will. If so, arrange the necessary court application and payment of probate fees.
Securing the Assets
- Where the deceased carried on business as a sole proprietor or as the owner-manager of a corporation, make arrangements for the business to continue and/or for the security of all physical assets and documents.
- Redirect the deceased's mail to your address.
- Arrange safe storage of personal valuables and important documents.
- If the deceased's home will be vacant, advise the insurance company and arrange to have someone check the property frequently.v
- Review property insurance arrangements, maintaining appropriate coverage and arranging any necessary new or additional coverage.
- Cancel any leases, health insurance coverage, driver's license, cable, telephone, club memberships, subscriptions, credit cards, professional memberships, and arrange for payment of any refunds.
- Advise Canada Pension Plan, Old Age Security Plan, Veteran's Pension and employer-sponsored pension plans of the deceased's death, as well as applicable professional groups and associations as required.
- If the deceased received benefits under a private insurance policy, contact the insurer to advise of the deceased's death, and arrange payment of any sums owing under the policy.
- If the deceased was receiving spousal or child support from a spouse or former spouse, advise the spouse or former spouse of the deceased's death.
- If the deceased was the sole or a Co-Executor of an estate whose administration is not complete, or the sole or a Co-Trustee of a trust, advise the Co-Executors or Co-Trustees of the deceased's death and obtain professional advice as to whether you have any responsibilities.
Assembly, Inventory and Valuation of the Estate
- Open a bank account for the estate.
- Obtain a valuation as of the date of death for all assets.
- Determine the adjusted cost base for tax purposes of each capital property.
- Close all of the deceased's bank accounts and transfer balances into the estate bank account, including business accounts, if the deceased was a sole proprietor of a business. Ascertain for each account the balance at the date of death and the interest accrued to the date of death.
- Contact employer(s) to arrange for payment of amounts payable to the estate as wages or under employee pension plan(s) of which the deceased was a member.
- Apply for CPP death benefit. Assist with the application for CPP survivors' benefits for eligible dependents, if any.
- Clear and close the deceased's safety deposit box.
- If the deceased was in a business partnership, obtain a copy of the partnership agreement to ascertain the estate's entitlements and liabilities.
- If the deceased owned shares in a private company, obtain a copy of any shareholders' agreement to ascertain the estate's rights and responsibilities.
- Contact life insurance companies to arrange for payment to you, for deposit in the estate bank account, of life insurance proceeds payable to the estate.
- Have transferred to your name as Executor (or Trustee, if applicable) title to all real estate owned by the deceased, and advise all holders of mortgages or other encumbrances of your name and address.
- Consider whether any RRIFs and or RRSPs of the deceased are to be rolled over to their spouse or other eligible dependants and, if so leave them in deceased's name.
- Contact all financial institutions and brokers etc. to have transferred into your name as Executor all GICs, investment accounts, bonds, stocks, and other investments and notify all disbursing agents of your name and address for receipt of distributions.
- Collect any debts or payments on debts owing to the deceased.
- If the deceased was a capital beneficiary of an estate or trust not yet distributed, or an income beneficiary of an estate or trust, contact the Executor(s) and/or Trustee(s) to advise them of the deceased's death and to obtain a copy of the Will or trust document. Ascertain any outstanding entitlements.
- Consider which assets should be sold/liquidated and which retained, and act accordingly.
Paying Debts, Legacies and Tax Compliance
- If it appears the debts and liabilities in the estate will exceed the assets in the estate, obtain professional advice to ensure you divide available assets appropriately among the various creditors of the estate.
- Advertise for creditors, in accordance with the applicable law. Include an advertisement for any appropriate business or trade names.
- Pay balances on all credit cards, lines of credit, utility accounts, and owing to other creditors, including judgment creditors.
- Arrange to pay all debts associated with the deceased's business or partnership as appropriate.
- Determine the deceased's income for the year until the date of death, including capital gains/losses, both realized and deemed.
- Determine the tax obligations in Canada and elsewhere, if assets were held by the deceased outside of Canada.
- Ensure the deceased's obligations under any marriage contracts, cohabitation agreements, paternity agreements, separation agreements or court orders are paid or provided for. Obtain appropriate releases.
- Ensure that the time for dependants to make claims for support from the estate and/or for the spouse of the deceased to make a claim for a division of matrimonial property has expired or that such claims have been resolved by court order or settlement and paid.
- Pay all legacies. Transfer specific bequests to beneficiaries. Pay amounts to which minor beneficiaries and incompetent adult beneficiaries are entitled to their proper representatives, if any. Obtain a receipt from each beneficiary. Consider making an interim distribution to residuary beneficiaries depending on the value of the estate and the status of claims.
- Prepare and file all necessary income tax returns to the date of death, and for any prior years, obtaining professional advice and assistance as needed.
- Prepare and file estate income tax returns for period subsequent to the date of death.
- Request clearance certificates from all relevant tax authorities.
Final Distribution of the Estate
- Prepare and distribute to the beneficiaries your final report, accounts and claim for compensation. If approval in writing of all beneficiaries, including the appropriate representative of any minor, unborn and incompetent adult beneficiaries, is received, you may take the compensation claimed and proceed to distribute. If such approval is not forth-coming, bring an application before the court to pass your accounts and fix your compensation.
- Establish any ongoing trusts provided for in the Will, transferring funds and/or assets to a separate account for each trust.
- Distribute remaining assets among residuary beneficiaries specified in the Will.
Appendix C: Executor Compensation
Although many family members perform the services of an executor or estate trustee without compensation, the courts have traditionally allowed such persons and trust companies to charge for their services. The scale for this compensation is based on the value of property in the estate, and allows the executor(s) a fee based on:
- 2.5% on capital receipts (i.e. where an executor gathers in capital assets of the estate, such as real property, the compensation on a $100,000 property would be $2,500.)
- 2.5% on capital disbursements (i.e. where the executor distributes capital property to beneficiaries; the compensation on the transfer of a $100,000 property would be $2,500.)
- 2.5% on revenue receipts (i.e. where the executor receives income, such as bank interest)
- Where the estate is not distributed immediately, an annual care and management fee of 2/5 of 1% on the gross value of the estate (i.e. where the gross value of the estate is $100,000, the annual compensation would be $400).
This guideline is generally followed but after the mathematics are done, the court must establish what is a fair and reasonable figure by looking at the following five factors:
- the size of the estate
- the actual care and responsibility involved
- the time occupied in performing the duties
- the skill and ability shown; and
- the success resulting from the administration.
The executor(s) usually need to propose their fee to the beneficiaries who in turn need to approve it. If the beneficiaries do not agree with the proposed fee, and it is not possible to negotiate a compromise, the accounts will need to be passed before the court.
Reviewed March 2015