Should I Act as an Executor?
Many of us have been asked to act as an executor for a family member,
friend or business associate. As an executor of an estate, what are your duties? What
responsibilities and potential liabilities do you assume?
If you are prepared to act as an executor, then the first step should
be to make sure that you have a clear understanding of the wishes and preferences of the
person of whose estate you will be the executor. You should discuss in some detail how the
estate is to be distributed, and any specific reasons that the testator (that is the
person making the will) has for distributing the estate in the manner laid out in the
will. If some family member has received less or more than an equal share of the estate,
you should have a clear understanding of the reasons of the executor on this point.
As executor, your duties and responsibilities begin from the time of
death. Your first responsibility is to attend to the funeral arrangements. You should
locate the original will and take custody of it for safekeeping. The will may set out the
wishes of the deceased with respect to the funeral or cremation. You should take whatever
steps you can to safeguard the estate assets, including taking possession of assets and
papers that form part of the estate. Contact the post office to have mail redirected to
Next you must obtain probate of the will. You must first list all the
assets and liabilities of the estate, including descriptions and approximate values as at
the date of death. If necessary and appropriate, obtain an appraisal of the assets from a
qualified and licensed appraiser. You will need the current name, address, and
relationship of each individual named in the will and of each person who is an heir at
law. This would be anyone to whom the deceased was or had ever been married or with whom
the deceased ever had a common-law relationship, and the deceased's children. Once this
information is available, provide this to your solicitor who can assist you in applying to
the court to obtain probate of the estate.
During the course of your executorship, you should keep a diary of all
the steps you take and decisions you make with respect to the administration of the
estate, starting from the date of death. For each item, record the date, what you did and
any expenses that you incurred personally or which you approved or paid. You must keep a
complete record of all expenditures and receipts so that you will be able to provide a
complete accounting of your administration of the estate when the estate is finally
Once you are granted probate, there are a number of things you can or
must do. You should arrange for the transmission of the estate assets into your name as
executor. This will be necessary if certain assets, such as land, cars and stocks are to
be sold, or even transferred to the beneficiaries. You must settle the estate debts. You
can convert assets into cash, if you think this is appropriate. You may wish to invest any
surplus cash on hand.
As executor, you must file certain income tax returns for the deceased
and the estate. It may be that no tax returns were filed for the years before the year of
death; search the papers of the deceased to determine this. If returns were not filed, it
will be necessary to file a return for each year. It is recommended you consult a
qualified accountant to assist you in filing returns. A separate return must be filed for
the year of death. A further return must be filed for the estate itself.
It is recommended that you not distribute the estate to the
beneficiaries until certain steps are first taken. Under the Wills Variation Act,
when a person dies leaving a will, any spouse or child of that person can bring
proceedings (within six months of the grant of probate) to vary the will if that spouse or
child believes that the deceased person did not adequately provide for him or her. In the
event the will is varied by the court, then the estate must be distributed in the manner
directed by the court. An executor should not make any distribution of estate assets until
at least six months after you obtain a grant of probate.
The Income Tax Act requires that an executor not distribute
property to a beneficiary until a Clearance Certificate is issued by Revenue Canada. The
Certificate is normally not issued until you have paid any tax that is payable. If you do
distribute the estate before you receive a Clearance Certificate, and if you have not kept
enough property in your hands as executor to pay any income tax that may be owing, you may
be personally liable for paying any unpaid tax.
You will have seen in newspapers in the legal section "Notice to
Creditors and Others" for various estates. An executor has such Notices published as
a way to avoid becoming personally liable for any debts of a deceased that come to the
executor's attention after the estate has been distributed to the beneficiaries.
Advertising in the prescribed form does not mean that the beneficiaries can avoid valid
claims by creditors, but it does protect the executor from creditors of the estate who
have not given notice of the claim to the executor according to the Notice.
If you have any questions on the issues discussed
above, or on estate planning in general, please
contact Sucha S. Ollek at: firstname.lastname@example.org.