What is an executor?
The executor is the person who administers the estate (assets, debts and possessions) of a deceased person according to their will, or according to law if there is no will. If the deceased does not have a will or did not appoint an executor, or if the executor is not willing or able to do the job, the court will appoint an estate administrator.
The executor is responsible for ensuring the provisions of the will are followed, including distributing any assets, paying debts, filing the final tax return and arranging the funeral.
What does the job entail?
Being an executor is a time-consuming, often frustrating job with a lot of responsibility. You will be dealing with competing needs, various government departments and financial institutions, a lot of paperwork and beneficiaries wanting their money and other inherited items.
Your very first job is to immediately ensure that any dependents and pets of the deceased are cared for. Next you must locate the will as quickly as possible. If there appear to be multiple wills, get legal advice to determine which is considered the final legal will. If the deceased has planned well, you will already have a copy or know where it is. Ensure any instructions regarding funeral arrangements are followed and that they are paid for by the estate. Get several copies of the death certificate.
Find all beneficiaries named in the will and provide them with copies of the will. Determine whether any of the deceased’s dependents require cash immediately. Apply for grant of probate – legal approval of the will by the court – which will enable you to carry out your duties.
Notify Service Canada and any other federal and provincial government authorities necessary; doing so can help prevent identity theft (i.e., someone taking on the deceased’s identity) and will cancel the deceased’s driver’s licence and stop Canada Pension, Old Age Security and provincial health insurance. Determine survivors’ eligibility for the Canada Pension Plan Death Benefit, Survivor’s Benefit and Orphan’s Benefit.
Obtain current credit card, bank account and investment account statements and gain access to the safety deposit box, if there is one. Inform insurance companies and employer pension administrators. Dealing with banks can be frustrating, especially if the deceased’s accounts have been frozen. You will need copies of the will, death certificate and probate documents to gain access.
Open an estate bank account and transfer in all funds from the deceased’s accounts. Prepare lists of all assets and liabilities. Pay all outstanding debts. Arrange for the transfer or rollover of the RRSP or RRIF. Maintain insurance on any assets such as real estate, fine art, vehicles and valuable jewellery.
After the initial wave of notifications is complete, cancel subscriptions, memberships, online accounts, social media presence, etc.
Plan to prepare the final tax return. The first step is to find the previous year’s return. Get the help of an accountant to be sure you don’t miss anything.
As you go through your tasks, keep the beneficiaries updated – let them know what’s happening with the administration of the estate. Provide them with a list of the estate’s assets and liabilities. Explain interim distributions. Keep track of estate administration expenses and give this information to the beneficiaries.
Before you can make the final distribution of funds, you must hold back funds to pay taxes and in case there is a probate audit. When you transfer items other than cash, such as personal possessions, have the beneficiaries provide receipts.
Completing your work
Once the tax return has been filed and you’ve received the notice of assessment, all debts are paid and all distribution cheques have been cashed, your work is nearly finished. The work of the executor stretches over many months and can be stressful and frustrating. You are taking on a lot of responsibility. You are entitled to reasonable compensation from the estate, so don’t be shy about taking it. Your compensation should be based on the size and complexity of the estate and on the amount of time you have spent administering it. The will may state what your compensation will be, but if not it may reasonably be about 5% of the value of the estate. Once you have paid yourself, make arrangements to close the estate bank account.
Many guides and checklists for executors are available online, and you should certainly take advantage of them – just make sure they come from a source within your jurisdiction. But it is also essential to obtain the assistance of a lawyer and an accountant to ensure you are meeting all legal and financial requirements in your jurisdiction.