BENEFITS OF PROFESSIONAL ADMINISTRATION
Executors who attempt to administer an estate without the benefit of any knowledge of the law can frequently frustrate beneficiaries through delays and improper decisions, leading to serious disagreements amongst the parties. The death of a loved one naturally creates stress in a family.
A professionally administered estate will bring about a timely conclusion in the administration of the estate.
DUTIES OF AN EXECUTOR
While it is a privilege and an honour to act as an executor, with that privilege comes many responsibilities, as anyone who has acted as an executor will already know.
Most executors will seek the assistance of a lawyer that is experienced in the administration of estates. Although it is possible to administer an estate without the assistance of legal advice, embarking on such an adventure is like tip-toeing through a mine field, as the executor may never be certain as to whether or not they have acted properly or incurred some liability because of their actions in administering the estate.
To give you an idea as to the complexity of estate administration, the following is a list of an executor’s duties that a law firm would complete with the executor in the administration of an estate. In most estates, many of these duties are dealt with through an estate administrator in a law office.
1. Arrange for the funeral.
2. Locate the Will, if one exists, and meet with the estate lawyer to review and interpret the Will in accordance with the laws of Saskatchewan.
3. Determine whether probate is required and, if required, obtain same.
- Probate is the Court’s certification of a Will so that the Will is approved and an executor is protected for acting upon that Will. Obtain information on all estate assets, debts and beneficiaries.
- Prepare all required documents for the Grant of Probate, if probate is necessary.
- Locate and have one of the witnesses to the Will complete an appropriate affidavit to prove the Will.
4. The estate administrator at the law office normally assists the executor in managing the assets of the estate for the benefit of the beneficiaries by doing the following:
- Meet with or speak to family members and keep the beneficiaries informed as to the administration of the estate.
- Review the Will to confirm the validity of the Will and the rights that a surviving spouse or dependants who are financially dependant upon the deceased may have.
5. Locate all the beneficiaries,including charities, and notify them as to their interests in the estate.
6. Confirm that an application for Canada Pension Plan Death Plan benefits (or other benefits) has been made and, if not, apply for same. If necessary,
contact Social Security Office in USA to stop benefits and apply for any survivor benefits.
7. Cancel all credit cards, driver’s licences, newspapers and magazine subscriptions as well as telephone and cable TV, internet subscription and memberships, etc.
8. Determine the assets and liabilities of the deceased.
- Review all bills and bank statements.
- Assist in obtaining or listing the contents of the safety deposit box.
- Obtain a statement showing the value of the deceased’s investments and RRSPs/RRIFs as of the date of death.
- Prepare an inventory of all assets.
- Contact the deceased’s employers to determine if any pension or survivor benefits exist or any further payroll benefits.
- Determine the outstanding balances of all personal debts and whether insured or not.
- Determine options available for any remaining pension plans or annuities and determine if the monthly income should continue or the commuted value is to be paid out.
9. Manage the assets of the deceased.
- Redirect the deceased’s mail and notify all interested parties of the change of address.
- Safeguard the assets of the estate and obtain any property insurance required.
- Re-register the assets of the deceased into the names of the estate.
- Open a bank account for the estate.
- Transfer the deceased’s bank accounts to the estate bank account.
- Arrange to transfer all real property in the name of the deceased into the names of the executors in preparation for potential sale of all real estate of the estate or transfer to beneficiaries.
- Arrange for the sale of estate real estate, if not being transferred to beneficiaries.
- Obtain share certificates for bonds and stocks.
- Manage surplus cash.
- Obtain Certificate of No Infants from the Public Trustee’s Office or Certificate of Local Court Registrar (as required).
10. Settle the bills of the estate: creditors, funeral expenses, and other expenses.
- Advertise for creditors and other interested parties who may have a claim against some or all of the estate and attend to payment of valid debts prior to distribution to any of the beneficiaries.
- Settle all claims and debts of the deceased, including credit cards, consumer debt and/or mortgages.
- Arrange for probate fees to be paid to the Court of Queen’s Bench.
- Assess possible dependent and/or spousal claims against the estate and determine whether assets should be disbursed prior to the time limits under The Dependant’s Relief Act and/or The Family Property Act.
11. Prepare and file Income Tax Returns.
- Prepare and file the returns for any years prior to the date of death that have not been filed.
- Prepare and file the final tax return and other optional returns for the deceased.
- Review the assets to determine whether or not special income tax returns, such as a Rights and Things Return, ought to be filed to minimize the tax on the final return and to the beneficiaries.
- Identify opportunities to reduce the tax bill of the deceased (including
using a spousal rollover, applying capital losses and contributing to a spousal RRSP).
- Fulfill tax requirements for assets held outside of Canada, including those required by IRS.
- File estate tax returns (if necessary) for each year that the estate exists and earns income and determine possible tax savings through continued filings.
- Obtain a Tax Clearance Certificate to date of death from Canada Revenue Agency.
12. Distribute the assets and property of the estate to the beneficiaries according to instructions in the Will.
- Assess any immediate need for cash that the surviving spouse or other beneficiary may have.
- Assist jointly named beneficiaries in having accounts transferred or paid out.
- Assist named beneficiaries on RRSP/RRIFs in obtaining transfer or payout of funds.
- Close the safety deposit box.
- Determine if there are sufficient assets in the estate to pay all liabilities and income tax, before making any interim distribution to the beneficiaries (so you do not take on any personal liability for a tax bill to Canada Revenue Agency).
- Prepare an accounting of all income and expenses for the estate.
- Calculate the fees and expenses payable to the executor, if applicable.
- Calculate distributions (interim & final).
- After final Tax Clearance Certificate is obtained, distribute any remaining
assets or property in the estate.
- If the Will provides for specific bequests, transfer these bequests to the named beneficiaries and obtain
- Discuss any “in kind” distributions with the beneficiaries.
- Complete necessary paperwork to transfer stocks, securities and other investments.
- Establish any Testamentary Trusts that may be required according to the instructions in the Will.
- Prepare and obtain signed Releases from all beneficiaries approving the actions of the executor and the executor’s accounting.
- File Releases and Accounting with the Court, concluding the administration of the estate.
- Passing of Accounts, if Releases can not be obtained.