It doesn't come as a surprise that administering an estate can be a long and thankless task. Emotions are often running high following the loss of a loved one and there are numerous steps that must be completed before closing an estate. Our Wills and Estates Group just attended a seminar provided by the Law Society on the administration of estates. We have two key tips for estate administrators from the seminar to share. These tips will help ensure that an estate administration progresses smoothly and that costly litigation is avoided. The first tip is to plan ahead to make sure that an estate administration progresses smoothly from start to finish, and the second is to keep the beneficiaries of the estate well informed of the progress through regular reports.
One of the best ways to avoid disagreements and ensure an estate administration progresses smoothly is to establishing a comprehensive administration plan early in the process. The plan should lay out the steps to be taken and the tasks that need to be accomplished in order to close the estate, as well as a mechanism for resolving any disputes that may arise, for example, if there is more than one administrator. The plan should also contemplate legal and financial requirements that must be met, such as ensuring that there are sufficient liquid assets available for the Estate Administration Tax ('EAT') deposit, which must generally be paid before a Certificate of Appointment of Estate Trustee can be issued by a court.
The second way to avoid uncertainty and distrust amongst the beneficiaries of an estate is to provide regular progress reports through formal accountings of the estate's assets. The estate's financial statements should also be properly maintained, up to date and ready for review at all times. Not only is this good practice, which will help reassure beneficiaries that their interests are being protected, it is also part of an estate administrator's common-law duty in fulfilling their role, and will make obtaining 'releases' from beneficiaries or a passing of accounts from a court easier to obtain prior to making any payments.
These two tips can help an administrator ensure that the administration of an estate and its wind-up are not delayed. Remember, progress and communication are key for the successful resolution of an estate.