So You’re an Estate Trustee, Now What?
July 22, 2020
This article provides a brief introduction to your role as Estate Trustee. An Estate Trustee was formerly known as an Executor or Executrix. You may have become an Estate Trustee because you were named in a Will. If there was no Will, an application can be made to the Superior Court of Ontario for a Certificate of Appointment which will allow you to administer the Estate.
As an Estate Trustee, you are the person primarily responsible for the administration of the estate. Your responsibilities as Estate Trustee may include, but may not be limited to, the following:
1) Personal Duties:
- Making proper funeral and burial or cremation arrangements;
- Determining who the beneficiaries are, locating them and notifying them of their interest in the estate;
- Securing and preserving the assets of the Estate;
- Notifying the Canada Revenue Agency of the death, including the destruction or return of the deceased’s Social Insurance Card and reporting whether the deceased was receiving the Old Age Security Pension and/or Canada Pension; and
- Cancelling the deceased’s OHIP card and Driver’s license.
Practice Tip: Make sure you obtain sufficient copies of the Proof of Death from the Funeral Home. You will need to supply a Death Certificate to all the different organizations you work with in your capacity as an Estate Trustee.
2) Taking Stock of the Estate:
- Determining the full nature and value of the assets of the deceased, including:
- Personal effects;
- Bank accounts;
- Investments and life insurance policies;
- Real Estate holdings;
- Pensions, including applying for death benefits and/or survivor pensions; and
- Arranging with a bank or trust company etc. for a list of any safety deposit boxes.
Practice tip: Ask your lawyer to provide you with Notarial copies of the Will or Certificate of Appointment to present to financial institutions or other agencies, such as the CRA to confirm that you are the person authorized to deal with the estate.
3) Identifying and resolving debts:
- Determining what debts were owed by the deceased and arranging for payment;
- Contesting and/or settling any debts if you are not satisfied that they are legitimate debts;
- Collecting any money that may be owed to the deceased;
- Determining the income tax liability of the deceased and of the estate, filing the necessary tax returns, paying any tax owing and obtaining an income tax clearance certificate.
Practice Tip: While an estate trustee is not personally liable for debts owed by the deceased, you can be found personally liable if you distribute the estate before you pay all the debts of the estate, including taxes. Consider taking out a Notice to Creditors in your local newspaper which provides a period of time for creditors to make claims against the Estate prior to distribution. This limits your liability as an Estate Trustee by putting any creditors on Notice. You should also consider obtaining a clearance certificate from the CRA regarding any tax liability prior to disbursing the entire estate.
- Maintain proper accounts throughout the administration of the estate.
- Reporting to the beneficiary or beneficiaries about the administration of the estate.
Practice Tip: We strongly recommend using one account for the Estate if at all possible. This makes preparing the Estate accounts significantly easier and provides more transparency to beneficiaries. You may choose to maintain such an account at a bank in trust as an Estate Trustee or use your lawyer’s Trust Account.
5) Distributing the Estate:
- Distributing the assets of the estate. Where an individual dies leaving a Will the distribution of the estate is governed by the provisions of the Will. If there is no Will, then the distribution is governed by intestacy laws.
Practice Tip: Consider maintaining an up-to-date list out the addresses and telephone numbers of all your beneficiaries with your Will. This can save your Estate Trustee a lot of work in tracking down beneficiaries.
Estate Lawyer’s Role
Lawyers will often act on behalf of an Estate Trustee in connection with a deceased’s estate. For this purpose, our work may include the following, if required, among other things:
- advising the Estate Trustee on the administration of the estate;
- preparing the court Application for a Certificate of Appointment;
- preparing the advertisement for creditors;
- communicating with various institutions including banks and the Canada Revenue Agency on behalf of the Estate Trustee;
- searching executions (a register of debts);
- assisting in the preparation of the Estate Trustee’s accounts; and
- preparing releases for the beneficiaries to sign acknowledging when assets are transferred to them.
Although we may carry out some of the work that the Estate Trustee would normally be responsible to complete, final responsibility for making any and all decisions remains with the Estate Trustee.
If you have any questions regarding applying for a Certificate of Appointment of Estate Trustee, or about the administration of an estate, please do not hesitate to contact any member of our Estates Team.