The Duties and Obligations of an Estate Trustee
September 29, 2018
A 10-step guide to Estate Administration
An Estate Trustee (formerly known as an Executor) of an estate has a great deal of responsibility for administering the estate that appointed him/her. Administering an estate is done with care and in accordance with the deceased’s wishes and the law.
The winding up of an estate generally involves carrying out the terms of a last will and testament, paying debts and taxes and distributing the residue of the estate to the beneficiaries.
These 10-steps are an initial guide to an Estate Trustee:
- Locate the Last Will and Testament and review it. A lawyer could be hired from step one, to make an initial determination as to the validity of the will, to advise on the rights and obligations of the estate trustee and beneficiaries, and to help formulate a checklist and game plan to help the estate trustee complete administering the estate.
- Make funeral and burial arrangements if necessary. Funeral arrangements are sometimes made in advance. People often leave their last burial or cremation wishes in their will or codicil, so a prior review of the Last Will and Testament and consultation with the family will determine the level of input required from the estate trustee at this stage.
- Determine the beneficiaries listed in the Will. With fragmented families, estranged relatives, multiple marriages and cousins dispersed around the world, locating the beneficiaries could be a challenging task. The construction of a family tree is conducted methodically and meticulously.
- Determine the assets of the estate. A search must be conducted for safety deposit boxes, cash, securities, jewelry, real estate and other valuables. Personal identity documents, sentimental and valuable collections, certificates, etc., must be collected and kept safe. Bank accounts, investment accounts, pensions, real estate and the like, must be identified and recorded.
A complete inventory is required of the nature and value of the assets in the estate.
- Determine the liabilities of the estate. This includes paying off any debt and liabilities the deceased may have accumulated. To avoid unnecessary interest on credit cards or other debt, payment should be made forthright, assuming claims are legitimate. A notice should be published, and a search conducted for mortgages, liens and credit advances. Determine whether the estate has enough assets to pay the liabilities.
- Deal with personal items. Personal items should be dealt with either in accordance with the deceased’s wishes or by selling them to include the proceeds in the residue of the estate.
- Apply for a Certificate of Appointment with or without a will, if necessary. Whether this is required will depend on the circumstances, whether any contentious matters are anticipated, and the type of assets involved.
- Administer the deceased’s estate. The administering of an estate involves the accounting and transfer of the deceased assets. A few examples are re-assigning real estate leases that were in the deceased’s name, paying off and cancelling credit cards, phone plans, dealing with life insurance policies, providing notice to Canadian governmental bodies, applying for Canadian Pension Plan death benefit, transferring assets held in the deceased name, notifying any litigation proceedings, etc. There is an accompanying responsibility to keep full and accurate records of all the dealings of the estate. Any correspondence, transaction and expenditure should be recorded.
- Prepare and file the necessary tax returns. Conclude this by obtaining tax clearances and releases. It may also be advisable to “hold back” a portion of the estate assets to cover potential taxes and expenses that may be owing.
- Distribute the assets of the estate to the beneficiaries. When funds are paid to beneficiaries, they should sign a “release” to release the estate trustee from any personal liability in relation to the estate.
If necessary, a court-sanctioned “passing of accounts” can formally conclude the administration of an estate. Due to the extensive duties and obligations of an estate trustee, it is advisable to consult a lawyer to assist with the process – the estate usually covers the estate trustee’s legal fees, anyway.
This blog post provides a general overview of the duties and responsibilities of an estate trustee and is in no way exhaustive. Individual circumstances vary and the path to winding down an estate is case specific.
The general information on this page is not applicable to any specific case and is intended for information purposes only. It is not a substitute for legal advice and may not be relied on as such. Readers are expressly advised to consult with a qualified lawyer for advice regarding their specific circumstances and entitlements under Ontario law.
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