Legal Advice for Executors and Estate Trustees
The death of a loved one is never an easy thing to endure. To add insult to injury, the bereaved family, friends, and colleagues are often left to take care of some much-needed housekeeping. These housekeeping duties can range from making funeral arrangements to closing bank accounts.
If the deceased person left behind a last will and testament and named an executor, there will only be more responsibilities to manage. Though a will ensures the carrying out of the deceased's wishes in a strict and law-abiding fashion, carrying out these wishes is rarely an easy task.
Being named the executor of a loved one’s estate sometimes comes as a surprise. Other times, your role as the executor of someone’s estate is long since known. Whatever the case may be, the responsibilities that come with such a role are sure to confound most people unfamiliar with the world of estate and probate law.
Most Canadians at some point or another will be the executor of someone’s estate. When you receive notice of your role as executor, will you know the first step to take? Likely not. Few people do. There is no shame in this. Without proper guidance, the Canadian legal system is nearly impossible to navigate. That is why Lees & Lees has sought to answer all the questions we can about executors, estate trustees, and the probating of an estate. We’ll start with the most basic questions we’ve heard from our clients and work our way to the more complicated scenarios that can arise when handling a loved one’s estate.
Is it required that every last will and testament name an executor? What happens if a loved one’s will doesn’t have an executor? Can someone volunteer to be an executor of a will? Lees & Lees will answer all these questions and more.
What is an Executor?
Before we outline the core duties of an executor, let us first take a closer look at what an executor actually is.
What is an executor? An executor is undoubtedly the most important person named in an individual’s will. An executor is the person who is responsible for carrying out the tasks associated with a deceased person’s will and estate. Some of the issues an executor is responsible for include paying off debts and the distribution of the deceased’s assets.
If you are the executor of someone's estate, it is because you’ve been deemed responsible, trustworthy, and capable of doing what’s asked of you.
Duties of an Executor
Now, what does the testator expect of an executor? Some of the most common duties expected of an executor include (but are not limited to):
- The arrangement of the deceased’s funeral
- Validating the testator’s will in probate court
- Informing the beneficiaries of their interests in the estate
- Determining the distribution and management of the deceased's estate
- Repaying all outstanding debts of the deceased’s estate
Once again, keep in mind that this list is incomplete. The role of executor will always vary as it depends on the size and complexity of the testator’s (the deceased’s) estate.
Sometimes, we’ll have meetings with executors who are uncomfortable with their newfound role as executor. Their reasons for feeling this way might be professional, emotional, or financial. Whatever the case may be, it is worth mentioning that no person is legally obligated to act as the executor of a testator’s estate. Any executor is free to refuse the role if they wish. Your withdrawal will be acknowledged, and a new executor will be appointed to the testator’s estate.
The Executor and Funeral Arrangements
An executor is also able to determine how the testator’s remains are handled and disposed of. Contrary to popular belief, the funeral wishes expressed by the testator are rarely legally binding. Though it is rare for an executor to contest the deceased’s wishes, they have full authority to do so if they wish.
Executor Responsibilities: What an Executor Can’t Do
While an executor has the fiduciary duty to carry out the deceased’s wishes to the best of their abilities (so long as they are in accordance with the law), there are limitations to the executor’s power.
For example, an executor cannot change the beneficiaries in the will. They might feel pressured to do so by friends and family, but this is outside of the executor’s powers.
The executor also cannot stop any of the listed beneficiaries from contesting the will. Despite the fact that challenging a will can be an emotionally exhausting and even financially draining process for all involved parties, there is nothing stopping a beneficiary from doing so.
In the event that the will was not signed before the testator passed away, the executor cannot sign the will on the testator’s behalf. Without the testator’s signature, the will is not valid. In virtually all cases, the will’s validity is then determined in provincial probate court.
Lastly, the executor also cannot execute the will before the testator has passed away.
If the executor is not adhering to their role as fiduciary to the testator’s estate, the beneficiaries can intervene. If the executor is failing to act as executor of estate duties, the court will take care of the executor’s duties.
Legal Advice for Executors: Is It Worth It?
As we’ve made very clear, the provincial court system, beneficiaries, and other family members all hold the executor to an incredibly high standard.
In order to avoid conflicts of interest and in order to properly administer the estate, every executor should seek professional legal advice. Without the aid of a legal expert like those at Lees & Lees, mistakes can be made, and an estate can be tied up in probate court for a lengthy period of time. Proper legal advice can ensure that the arduous process of handling a loved one’s estate goes as smoothly as possible.
Losing a loved one is already taxing process. A mismanaged estate can sour memories and prolong grief. To ensure that the testator and beneficiary’s wishes are honoured, we strongly suggest seeking counsel from a firm with experience handling estates. Your family is worth it.
The estate lawyers at Lees & Lees have decades of experience in handling the administering of estates throughout Ontario. We’ve been able to assist executors through complicated probate court proceedings. We also help the executor gather all the financial information required to proceed in providing an account of all assets, all income, all debts, and all distributions of the estate. This stage of an executor’s duties are known as the ‘passing of accounts’, and is supervised by the Courts. Without proper guidance during these processes, you risk making mistakes and seeming unfit to act as executor of the estate.
The Role of Executor: Does the Executor Pay for Legal Advice?
Many people in Ontario are apprehensive about seeking the assistance of an estate lawyer. They’re worried that they’ll be burdened with more costs, and in turn, more stress.
In most cases, however, the costs of professional advice are covered by the testator’s estate itself. Rarely does Lees & Lees ever see an executor have to pay for our services out of their own pocket.
But there is a small catch. Depending on the services the executor seeks out, these costs may be covered by the executor’s compensation.
Does the Executor of Estate Receive Compensation?
Which brings us to the topic of executor compensation. Do executors really receive compensation for their role as fiduciary?
The role of executor is a demanding one. On top of being burdened with feelings of loss, grief, and sadness, they’re given a desk-load of materials to sift through as executor. With or without the guidance of an attorney, being an executor is a challenge.
Generally, executors are entitled to compensation. This compensation is not owed by the testator’s surviving family, the provincial or federal government, or any other institution. The compensation is owed by the estate itself. The amount which is owed by the estate can also be contested by the executor themselves. When the executor’s compensation is contested, the process of ‘passing accounts’ is supervised by the courts.
When undergoing the passing of accounts process, many executors retain the services of a lawyer to ensure no mistakes are made and that they receive the compensation they deserve. The passing of accounts often entails a full review of all the executor’s actions as executor, so conducting oneself in a professional manner is essential.
Managing the Testator’s Estate as Executor
As executor of the testator’s estate, your responsibilities aren’t simply relegated to giving the beneficiaries their share of the estate. An executor acts are the caretaker of the deceased person’s assets. This means making sure that their assets are well-managed.
While that might seem relatively simple, it is more complicated than people expect. Even if a testator has a small estate with few assets, things can be quite complicated. A testator who was merely renting an apartment, for example, needs the executor to notify the landlord to make necessary arrangements. The testator’s credit cards, utilities, subscriptions, prescriptions, and insurance policies need to be canceled, their mail needs to be redirected, and any valuables need to be placed in a safety deposit box.
The executor will also often have to fill out the Registration of Death form and obtain death certificates as well. Some financial institutions often require a copy of the testator’s death certificate before they release any available assets. When needed, the Registration of Death form can be obtained from the Government Vital Statistics Office.
If the testator had a large estate with many assets, things only become more complicated.
Most estates include a house and other additional properties, like cottages or second homes. As these are often an estate’s most valuable items, great care must be exercised when dealing with them. The duty of the executor is first to make sure that the testator’s properties are insured. The executor will also have to make sure the home is protected and well-maintained so as to ensure that these assets do not depreciate in value.
Paying Outstanding Debts and Taxes
As mentioned, paying the outstanding debts of a testator is one of the executor’s many responsibilities. It can be difficult to track down the many debtors and creditors, but if the executor had a close relationship with the testator it may be easier.
After paying off outstanding debts and closing various accounts, the executor also has to make sure all taxes are paid out before distributing the estate to the testator’s beneficiaries. They’ll have to file a tax return for the year the deceased passed away, and they will also have to obtain a clearance certificate from Revenue Canada.
Not only does the executor have an obligation to the testator but is also obligated to the beneficiaries.
Many people wonder how long an executor has to notify a beneficiary of the testator’s assets and their shares.
In Ontario, an executor generally has one year to administer an estate to its beneficiaries. You might hear people refer to this period as the “executor’s year”.
The Executor’s Year
A 2016 article in the Globe and Mail called being the executor of a will the “most stressful experience you’ll ever have”. Over the course of your executor’s year, you’ll have to deal with feuding beneficiaries, feelings of grief, and many lengthy conversations with financial institutions, creditors, and comprehensive forms like the seven-page Estate Information Return requested by the Ministry of Finance. Every item needs to be accounted for, from automobiles to bicycles.
Feeling overwhelmed is inevitable, but inexperience or ignorance won’t earn you any sympathy among creditors, courtrooms, and family members. To best adhere to the wishes of the will’s testator, it is necessary for you to seek out the legal services of an attorney. An attorney who is well-versed in estate and probate law will make sure all debts are satisfied and no stone is left unturned.