Most people are happy to agree to be an estate trustee at some future date, but they may not have a true understanding of what it entails. And when someone dies and you are thrust into that role, it can be very overwhelming. You may be thinking: where do I even begin?
Below is an outline of the basic duties of an estate trustee.
1. Plan the funeral
It is the estate trustee’s responsibility to organize the funeral. Ideally, the deceased will have discussed their funeral and burial arrangements with you before they died, and even done some pre-planning. Note that sometimes funeral instructions are contained in a Will, but the instructions contained in the Will are not binding on the estate trustee.
You should also obtain a Proof of Death Certificate from the funeral home. The Proof of Death can be used to cancel the accounts of the deceased, and should be provided to banks, insurance companies, the Federal Government, the Ministry of Transport, registry offices and pension funds.
2. Find the Will
You should locate the Will, if there is one, and familiarize yourself with it. Be sure to confirm that it is the most current one.
3. Retain a lawyer
An estates lawyer is absolutely necessary, particularly in the early stages. Estate administration can be incredibly complex, and an experienced lawyer will help make the process much smoother.
A lawyer will also help you to obtain a Certificate of Appointment of Estate Trustee, which is a document issued by the court that proves the authority to the estate trustee to administer the deceased estate. It will also confirm that the Will that you found is the last Will and will help you gain access to the deceased’s bank accounts, insurance policies and real property so you can close them as necessary.
4. Pay outstanding taxes and debts
An estate trustee has a number of financial responsibilities. Your estates lawyer and an accountant can assist you with these tasks.
The main one is organizing payment of the Estate Administration Tax, which used to be known as probate fees. It is charged on the total value of the deceased’s estate and is payable to the province when you apply for the Certificate of Appointment of Estate Trustee.
You must also ensure the payments of any debts of the deceased and prepare any income tax returns. After this is done, you should request a clearance certificate from Revenue Canada, which removes the estate trustee’s responsibility for unpaid taxes.
5. Locate guardians and dependents
If there are minor children involved, it is the estate trustee’s responsibly to ensure support for them and to ensure that a guardian is appointed for the minor children.
6. Deal with assets
It will be your job to locate and safeguard all the assets of the estate. Ideally, the deceased will have kept records of their assets and where they are located (e.g. safety deposit boxes). You should compile your own inventory to help you keep track. Some assets may need to be professionally appraised to ascertain their value.
Many of these assets will need to be liquidated and sold off. You will also need to deal with household articles and personal effects. If the deceased left a family heirloom to a beneficiary, then it is your responsibility to find the family heirloom and give it to the correct person.
Note that it is only the estate trustee who has access to these assets. Make sure that other family members access only what they are permitted to.
7. Maintain estate accounting
As an estate trustee you have a responsibility not only to the deceased’s wishes, but also to the beneficiaries. You will need to keep good records (accounts) of the assets and what has gone into and out of the estate, and also ensure that the estate is properly administered. It is advisable to keep beneficiaries informed of all developments.
In some cases, you will need to obtain the court’s approval of the administration of the estate. This is known as “passing of accounts”.
8. Distribute assets
The final step is distributing the assets of the estate, in accordance with the Will. You may need to do some research to track down the contact information of all the beneficiaries.
You should try to obtain a release from the beneficiaries before distributing the assets of the estate. This is a statement detailing all the financial transactions and expenses of the estate on behalf of the trustee. By signing it, the beneficiaries acknowledge that they are satisfied with the administration of the estate and the work of the trustee. In essence, it protects the estate trustee from further claims or disputes against the estate.
Need more information?
The information in this post is a broad overview of the duties and tasks of an estate trustee, and is not exhaustive. It is a role with a great deal of responsibility, and there is a lot we did not discuss here.
For more information about the role, please contact our Wills and Estates Group.