Estate Administration

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In this presentation, Dentons' Doris Bonora outlines the steps to take when administering an estate.

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Estate Administration

  1. 1. Estate AdministrationPresented by Doris BonoraDentons Canada LLP
  2. 2. Steps to take21. Locate the will.2. Determine the identity of the Executor/Personal Representative.3. Plan the funeral…the Executor is in charge and if not the Executorthen the next of kin starting with the spouse and then the childrenstarting with the oldest child.4. Cancel any identifying information such as driver’s license, passport,SIN card, AHC and all banking cards such as credit cards and ATMcard.5. Notify the banks of the death.Dentons Canada LLP
  3. 3. How to Pay Debts31. Before the Grant of Probate – take the bills to the bank and requestpayments. Will work for funeral expense, credit cards, utility bills.2. After the Grant of Probate – the Executor will have access to the bankaccounts and therefore will be able to pay the bills.Dentons Canada LLP
  4. 4. Grant of Probate4a) What is it? Confirms the will and gives notice to those who have claims. Itis a Court application that is done as a paper application, no Court appearanceis necessary.b) Do you always need to apply for a Grant of Probate? You mustapply if the deceased had assets that have a value of more than $10,000solely in their name.c) How long does it take? About 2 – 3 months.d) How do you obtain a Grant of Probate? You must make an applicationto the Court.e) What does the Grant of Probate allow you to do? The Grant ofProbate allows the Executor to have access to all the assets. The Executorcan pay bills, can distribute assets and can sell assets.Dentons Canada LLP
  5. 5. Grant of Probate51. Who gets a copy of the will?Anyone who is a residual beneficiary. What if someone wants to see the willwho is not a beneficiary? There is no obligation to produce the will but it isalways best to have open communication.2. What taxes have to be paid?a) The Executor must file a tax return for any previous year not filed. (If theperson died on February 28, 2011, he would have to file a tax return for2010 just as he would have done if he had lived).b) The Executor must file a tax return for that portion of year of death that theperson lived. (If the person died on February 28, 2011, then there wouldneed to be a tax return for January 1, 2011 to February 28, 2011).c) The Executor must file a tax return for any income earned in the estate afterthe date of death. If the estate carries on for a number of years, then theExecutor must file a tax return for every year that the estate is in existence.Dentons Canada LLP
  6. 6. Grant of Probate63. What is a Clearance Certificate?An Executor is responsible to make sure that the taxes are paid and thusbefore the executor distributes all of the money he can request a ClearanceCertificate which seals the deceased’s tax file and protects the Executorfrom any more tax liability.4. Are there assets that are not governed by the will?Yes, any assets in which there is a named beneficiary such as RRSP, RRIF,Tax Free Savings Accounts, pensions and Life Insurance. Any joint assetsare also transferred to the surviving joint owner but there can be challengesto joint assets owned between parent and child and other joint ownershipthat is not between spouses.Dentons Canada LLP
  7. 7. Grant of Probate75. Can a will be challenged?It is difficult to challenge a will in Alberta. If the person had capacity and wasnot unduly influenced then we believe that the person had testamentarycapacity. A person must support his or her dependent children and his orher spouse. If a deceased person did not provide sufficient funds for his orher spouse or dependent children, they can challenge the will to obtainsufficient proceeds to be supported. A dependent child is a child who isunder the age of 18 or over the age of 18 but mentally or physicallydisabled and the disability makes them unable to earn a livelihood.6. What are the costs of a Grant of Probate?The Court charges between $25 - $400 for estates. The range depends onthe value of the estate but will not exceed $400.Legal fees are negotiable and should be negotiated. There is a tariff inwhich lawyers can charge $2,250 plus 1% of the estate. This can be toohigh for simple estates and thus an Executor should compare rates beforeagreeing to a fee.Dentons Canada LLP
  8. 8. Grant of Probate87. Can the Executor charge a fee?Yes, the Executor is entitled to a fee of between 1% – 6% of the value of theestate depending on complexity and the amount of the work done by theExecutor. The Executor will work with the lawyer to determine theappropriate fee. The fee is proposed to the beneficiaries to see if theyagree. If they do not agree then the Executor takes his case to Court tohave the Court set the fee.Dentons Canada LLP
  9. 9. Questions?Doris BonoraPartner780-423-7188doris.bonora@dentons.comDentons Canada LLP9
  10. 10. The preceding presentationcontains examples of the kinds ofissues people dealing with estateadministration could face. If youare faced with one of these issues,please retain professionalassistance as each situation isunique.10

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