Executor Duties - Marcia Green, Wills and Estates Lawyer - October 2014
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Marcia Green, Wills and Estates lawyer at Nelligan O'Brien Payne LLP explains the roles and responsibilities of being an executor and important criteria that must be followed.
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Executor Duties - Marcia Green, Wills and Estates Lawyer - October 2014
- 1. Executor Duties Presented as part of the Hulse, Playfair & McGarry 2014 Complimentary Seminar Series OCTOBER 16, 2014 MARCIA GREEN marcia.green@nelligan.ca 613-231-8335 O T T A W A V A N K L E E K H I L L A L E X A N D R I A K I N G S T O N
- 2. This PowerPoint is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. If you have any questions, please contact Marcia Green at marcia.green@nelligan.ca or 613-231-8335 nelligan.ca 2
- 3. Agenda What is an Executor/Estate Trustee Executors’ Duties Choosing an Estate Trustee Duty to Find the Will No Will – then What? Probate Ascertain Assets nelligan.ca 3
- 4. What is an Estate Trustee? Who takes care of your affairs after your death? • This person is called an Executor • In law, an executor is referred to as an “Estate Trustee” nelligan.ca 4
- 5. Executors’ Duties Executor’s duties include: • Find your Will • Realize the assets • Pay the debts • Pay the taxes • Deal with family law act claims • Account to beneficiaries • Distribute estate • Take compensation nelligan.ca 5
- 6. Choosing an Estate Trustee Criteria for being an Estate Trustee • Must be over the age of 18 (this is a legal requirement) • Must be mentally capabale • Ideally should not have a criminal record • Should not have recently been bankrupt • Should get a Canadian resident (ideally living in your own community) nelligan.ca 6
- 7. Choosing an Estate Trustee nelligan.ca Try to avoid naming children jointly • Choose child best fit for the job Corporate Executor • Impartial • More expensive • Keep excellent records 7
- 8. Duty to Find the Will Leave with a lawyer Do not put in safety deposit box Keep a copy somewhere safe nelligan.ca 8
- 9. If No Will can be Found No Will? • Succession Law Reform Act • $2,000 in lawyer fees • Delays in distribution nelligan.ca 9
- 10. If No Will can be Found No Will? cont’d • Assets will be distributed as per the legislation: • Spouse gets $200,000 and remainder divided between spouse and children • No spouse, goes to children • No children, goes to parents • No parents, goes to siblings • No siblings, goes to nieces and nephews • Then next of kin • Then the Crown nelligan.ca 10
- 11. Executors’ Duties Arrange the Funeral • You can avoid this by pre-planning your funeral, which can save on family disputes • Instructions in a Will are not binding nelligan.ca 11
- 12. Executors’ Duties Dispose of your last remains • Instructions are not binding • Discuss with your Executor nelligan.ca 12
- 13. Executors’ Duties Obtain proof of death • From funeral home • Provide to • Banks; • Insurance companies; • Federal government; • Pension funds; • Registry offices and • Ministry of Transport nelligan.ca 13
- 14. Executors’ Duties Probate • Get a Certificate of Appointment • Give Executor the authority to represent the estate • Lawyer is recommended • Once application is made to court, it will be returned after 6-8 weeks nelligan.ca 14
- 15. Executors’ Duties Probate • Estate Administration Tax (EAT) = 1.5% • $5 for each $1000 on the first $50,000 and $15 on each $1000 thereafter • Only properties in Ontario • Does not include jointly owned property • Does not include RRSP designation or life insurance nelligan.ca 15
- 16. Executors’ Duties Other Tasks • Terminate the deceased CPP and OAS • Death benefit • Provide proof of death to life insurance providers • Search for policies through the Canadian Life and Health Insurance Associate, CAA, American Express or Blue Cross nelligan.ca 16
- 17. Executors’ Duties – Ascertaining assets Leave a list of what you have and where it is located Safety deposit boxes Joint accounts will be frozen • Spouses should have an account of their own with some funds to get them through a few months nelligan.ca 17
- 18. Executors’ Duties – Realizing assets Safeguard assets Safety deposit box Only Executor should have access Liquidate assets nelligan.ca 18
- 19. Executors’ Duties Paying debts and income taxes • Taxes should be done by an accountant • Clearance certificate • Removed Executors’ responsibility for unpaid taxes nelligan.ca 19
- 20. Executors’ Duties Provide an Accounting to Beneficiaries • Executor must prepare • Record of what has gone into and out of estate • Ensures estate is administered properly • Executor protected from any claim in relation to accounts • Resolved with help of lawyers nelligan.ca 20
- 21. Executors’ Duties Distribute the Estate • Contact info for all beneficiaries, and guardians • Leave an explanation if the guardian is not a biological parent nelligan.ca 21
- 22. Executors’ Duties – Compensation No legislated rule 2.5% on capital and income receipts 2.5% on disbursements Fees for retaining professionals Cap clause Taxable as income for the Executor nelligan.ca 22
- 23. A new source for information on Wills and Estates Wills and Estates Law provides practical insight on legal issues related to estate planning, estate planning and nelligan.ca estate administration. Visit Wills and Estates Law online at www.willsandestateslaw.ca 23
- 25. Marcia Green is a member of the Wills and Estates Practice Group nelligan.ca O T T A W A V A N K L E E K H I L L A L E X A N D R I A K I N G S T O N
Editor's Notes
- Parents often like to name their children jointly. Usually an effort to avoid picking favourites. This could be a good or bad idea. It depends on the family. We suggest picking the child best fit for the job – responsible, local, etc. and using other kids as alternates. At the very least, have a tie breaker and include a majority rules clause in your will. Alternatively, you could choose a corporate executor. They will do an excellent and impartial job for you. This will usually be a bit more expensive, but it won’t come with the family history. They will be honest and keep excellent records. If a family dispute arises, the corporate executor will likely stay uninvolved and seek the court’s assistance, which can become costly, however, usually the family will realize the cost and complainers will subside.
- More on what an Executor does: Find the will Often with lawyer (let them know; we give clients a card for their wallets; no charge for service of us to keep it) Do not put in safety deposit box or hide in a secret safe place. Keep it someplace safe – not shoe box, vase, cookie jar, under the mattress, etc. Can result in the need to get a locksmith If no will, then will have to resort to the Succession Law Reform Act, which can add about $2,000 in lawyer fees just to get an executor appointed through the courts. Court will likely require security in the form of a bond as high as two-times the value of the estate. Will cause delays in the distribution of the estate
- Obtain proof of death from funeral home to provide to banks, insurance companies, federal government, pension funds, registry offices and Ministry of Transport. Depending on circumstances, an insurance company may seek a coroner’s report if cause of death is important under the insurance policy, but otherwise, you likely won’t need one. Ultimately, an executor should make use of all the forms and papers that the funeral director will provide, as this will usually include the application for CPP death benefit to help pay funeral costs.