Executor Duties

At the death of the testator, the property included in the will comes under the authority and control of the executor. It is then his duty to carry out the provisions of the will. More than one executor may be named in the will. If an executor is unable to act, he may be released from his duties by formal declaration in writing. If an executor is deceased, or none of them is able to act, the court will appoint an administrator to carry out the necessary duties. The executor’s duties involve certain legal and accounting formalities – it is usual for the executor to engage a lawyer and a financial representative to act for him in these regards.

The first matters to be attended to are (1) probating the will and (2) paying the death duties, where applicable.

Probating the will means the proving of the execution and authenticity of the will with the courts. Once this is done, a Judge grants the letters of probate and then the executor can proceed with the distribution of the assets as outlined in the will.

No distribution of the estate may take place until the funeral arrangements have been assessed and paid. When the governmental departments have been satisfied in this respect, they will forward releases which permit bank accounts, etc., to be released to the custody of the executor for distribution.

The order of distribution of assets is as follows:

  1. Funeral expenses. As previously mentioned, no distribution of the estate may take place until the funeral arrangements have been assessed and paid.
  2. Costs of the administration. The executor is entitled to a fee as determined by the Surrogate Court Judge.
  3. Debts of the testator. In order to inform creditors, it is customary to give public notice of the distribution of the estate by advertising three times in successive weeks in the local newspaper. The usual notice includes a clause to the effect that after a specified date (from two to four weeks from the date of the final insertion) the assets of the estate will be distributed having regard only to those claims that have been received.
  4. Distribution of the remaining assets to beneficiaries under the will. In case of estates where cash and personal belongings comprise the only assets, few if any legal difficulties may be encountered. In the case of an estate including such assets as real property, securities and partnership equities, the legal and accounting work involved may be considerable.

Personal Representative’s Checklist:

  1. Make all funeral arrangements and attend to burial of the deceased.
  2. Locate all bank accounts of the deceased. Obtain information about the balance on deposit and notify the bank of the death.
  3. Locate all insurance policies and obtain information about the amount payable on each. Notify the insurer of the death.
  4. List the contents of the deceased’s safety deposit box.
  5. Completely review all personal papers of the deceased in order to locate all assets and debts.
  6. Prepare a detailed inventory of deceased’s assets and debts.
  7. Arrange for the storage of any assets requiring it. Advise insurers of any physical assets of the deceased. Arrange any insurance coverage required.
  8. Notify beneficiaries of the death, if necessary and advise them of their entitlement under the will.
  9. Arrange with the Post Office for mail to be re-addressed.
  10. Cancel any subscriptions and charge accounts. Return or destroy charge cards.
  11. Obtain all unpaid wages and other benefits from former employer. See all service or veteran’s clubs for death benefits that may be payable to the estate.
  12. Apply to Surrogate Court for Letters Probate.
  13. Advertise for creditors, if necessary (see Sample).
  14. Prepare and file tax return for year of death and any prior years not filed by the deceased. Obtain release from further personal income taxes.
  15. Make all reasonable enquiries for persons who may be entitled to a share of the estate by reason of an illegitimate relationship.
  16. Apply for Canada Pension Plan benefits, if any.
  17. Apply for any amounts payable to the estate under insurance policies.
  18. Pay funeral expenses, income taxes payable and all debts of the deceased.
  19. Obtain tax refund, if any.
  20. Sell any estate assets which must be sold or those which the personal representative chooses to sell if he or she has the power.
  21. Pay money bequests and distribute other property in accordance with instructions in the will (being sure to retain sufficient cash to carry out the final steps, 22 through 24).
  22. File the estate’s income tax return and pay any tax owing (i.e. if the estate earned any income following the death of the deceased.) Obtain release from further estate taxes.
  23. Pay legal and accounting fees and any outstanding fees relating to the administration of the estate, including compensation for the personal representative.
  24. Obtain releases from all beneficiaries or pass estate accounts before a judge of the Surrogate Court.
  25. Distribute the balance of the estate assets to the rightful beneficiaries.

The previous checklist may be of value in administering the estate. The list is by no means comprehensive. It should merely serve as a guideline to anyone involved in the task of administering an estate. Each particular estate situation will vary and new considerations will enter the picture. The number of items in this list and the complexity of many of the items will illustrate the value of legal and accounting assistance in the administration of an estate.

Sample Notice to Creditors:

NOTICE TO CREDITORS AND OTHERS
IN THE ESTATE OF JOHN ADAMS SMITH, late of (complete address) All persons having claims against the estate of JOHN ADAMS SMITH, late of (complete address) who died on or about the 1st day of June, 201_, are hereby required to send full particulars of such claims to the undersigned executor on or before the 28th day of July, 201_, after which date the estate’s assets will be distributed having regard only to claims that have been received and the undersigned will not be liable to any person of whose claim shall not then have notice.
MARY MATILDA SMITH (executor’s or personal rep’s name)

Fees of Executors, Lawyers, Financial Representatives
The executor and any solicitor retained to act for him or her in handling the estate are entitled to a fee from the assets of the estate. Each is entitled to be reimbursed for any money spent in performing his or her duties, as well, including the engaging of a financial representative to assist with the preparation and filing of applicable tax returns, etc.

A personal representative (executor) is generally entitled to a fee of 5% of the value of the estate. If the administration of the estate involves holding and investing assets over a period of years, he or she is entitled to 5% of the income earned by investment of estate assets. On occasion a further 2.5% of the value of that portion of the estate being held and invested is also allowed as additional compensation by way of a management fee.

These fees are allowed to the personal representatives as a group if there is more than one. It is up to the group to decide how the compensation should be split between/among them. The court will assist them if dispute arises.

The fees for normal legal services rendered by a solicitor in the administration of an estate will depend on the aggregate value of the estate. If you feel a lawyer is over-charging, it is always possible to have the account “taxed.” This is a legal proceeding whereby a court official confirms the fairness of the account or reduces it to an amount s/he feels reasonable. Legal fees may also be reviewed by the Surrogate Court judge at the time the personal representative puts the accounts before the judge for approval.

Fees to financial representatives for advice and assistance in the preparation and filing of requisite tax returns is normally based on the time required to be spent reviewing the legal, estate and tax documents and preparing the returns and dealing with estate assets, liabilities and taxation laws relating to each.

Hourly rates charged by all representatives should be determined by the Personal Representative (executor) so they may have a reasonable estimate of the cost for the various duties to be performed.