Handling the last wishes of the deceased is a challenging responsibility. When a deceased relative's or friend's will appoints you executor of the estate, you are accountable not only to the beneficiaries, creditors, and debtors, but also to the deceased for carrying out his/her last wishes.

Generally, the executor's main obligation include making funeral arrangements, probating the will, collecting all estate assets, paying the estate's debts and distributing the remainder among the beneficiaries. Although an executor cannot delegate authority, he or she can hire advisers to assist in the administration of the estate.

In carrying out your duties, here are a few general areas you may wish to consider.

The Will

The executor must locate and examine the will. If the will is in the deceased's safety box, additional procedures will be required as financial institutions will not release assets in their possession until the will is probated.

Important Papers

In addition to the will, you will need to locate all papers necessary for administrating the estate, such as deeds, agreements, tax records, surveys, insurance policies, birth and marriage certificates, pension records, social insurance numbers for the deceased and beneficiaries, any business partnership agreements (or if a sole proprietor, the most recent financial statements), stock, bond, treasury, promissory notes, and related brokers, bank account numbers and locations, loan agreements, vehicle registration numbers and ownership, credit cards, medical and other benefit cards.

Death Certificate

Most institutions will require a certified copy of the death certificate when you file any claim. The funeral home usually provides as many certified copies as you may require.

Probating the Will

Probating a will provides official proof that the will is valid and genuine and that the Executor has the power to administer the estate. To protect themselves, financial institutions and life insurance companies require the will to be probated. The cost, forms, and procedures required for probating vary from jurisdiction to jurisdiction. In most instances, it is advisable to have a lawyer handle the specific requirements concerning signatures, witnesses, and dates that appear on wills and any codicils.

Bank Accounts

The executor should consider opening a new bank account in the name of the estate and include the name and address of the Executor on the imprinted cheques.

Credit Cards

All cards should be immediately located and canceled.

Pre-authorized Bank Debits and Credits

Until the will is probated, all automatic withdrawals and deposits will be returned by the financial institution. Be sure to notify any creditors paid by automatic debit to prevent essential services such as heat, electricity or house insurance being discontinued. Contact creditors who receive automatic payments for leases, loans, or mortgage payments and arrange alternate means of payment. Automatic deposits for RRSPs, RRIFs, interest or spanidend income, and pensions provide the executor with an opportunity to determine any sources of capital that might have been missing in the deceased's papers.

The executor will be required to contact these sources to determine whether the payments will continue to be paid to the estate, or whether payments will be paid in a final lump sum.

Mail

Complete a forwarding card at the post office to redirect the deceased's mail to your address. All mail should be opened upon receipt. Be sure to pay particular attention to mail from Revenue Canada for it may contain cheques, notices of reassessment, or other matters that must be taken care of promptly.

Insurance

Review the household insurance to ensure it is still in effect. If the house or apartment will remain unoccupied during the administration of the estate, be sure to contact the insurer and make any necessary changes to the coverage to protect any losses in the event of fire, flood, vandalism or theft. If the property is a house, arrange grass cutting, snow removal, pick up of flyers, and general maintenance. Install light timers throughout the house as well.

Locate the automobile insurance papers and make any necessary changes if the vehicle will be stored until sold or if another driver will be using it. For example, if the surviving spouse is listed as an "occasional driver", update to principal driver.

Life insurance carriers must be notified and proceeds directed to the designated beneficiary, which in some cases could be the estate.

Liabilities

The executor is expected to deal with the estate as a prudent person and generally is only liable for gross mismanagement. Examples of when an executor would be liable are:

• If tax returns are filed late and so incur a penalty.
• If the executor distributes the estate without giving notice to creditors; and
• If the executor distributes the estate without obtaining necessary clearance certificates from the federal and provincial taxation authorities.

Professional Assistance

Some of the basic powers of the executor include the power to sell assets generally, pay debts, spanide property and distribute it to beneficiaries, and deal with business interests, private company shares, portfolio securities and partnership interests. Generally, executors have the powers necessary to carry out the efficient administration of the estate; however, the provincial legislation specifying the powers of executors does vary by province. As well, financial affairs can be complicated, particularly in areas regarding tax.

Some estates are relatively simple and distribution is completed quickly; others can be quite complex. If you are appointed executor, talk to both your lawyer and Logan Katz LLP Chartered Accountants before carrying out your duties.

Please contact us for more details.

The above provides general information only. It should not be regarded or relied upon as accounting or taxation advice or opinions. Logan Katz LLP Chartered Accountants would be pleased to provide more information or specific advice on matters of interest to you.

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