BUSINESS | LITIGATION | REAL ESTATE | WILLS & ESTATES

First Steps for Executors When Someone Passes Away

When someone passes away, the person named as an executor or executrix (female) will often be uncertain as to what steps they should take. If there is no will or if the executor has passed away, someone will need to take on that role. This brief outline will apply to them as well. To keep this article simple, I will only refer to an "executor" even though the proper phrase for a woman appointed to that duty is "executrix".

Funeral Arrangements

The executor or executrix is the person in charge of funeral and arrangements for burial or cremation. They should also consider making newspaper announcements. Of course, it is always best to work with the appropriate family members to ensure that the proper interests of everyone involved are respected. Funeral homes are very helpful on all of these matters, and they will typically help arrange the newspaper advertisment if the family wants one.

Legal

  • The executor is entitled to possession of the will. Take steps to locate it.
  • Find a lawyer and bring the will to the lawyer they have selected. Remember that some lawyers may not practise in this area very often. You will want someone that is familiar with this type of work.
  • The lawyer selected represents the estate. It's not common for a beneficiary to need their own lawyer. However, if a beneficiary or person interested has a dispute with the will or the estate, they should find a different lawyer at a different law firm. The estate lawyer / law firm is not able to represent both sides.
  • Gather as much information about the income, assets, debts and insurance policies of the deceased. The estate lawyer will need this to begin his or her work. They will give you more specific directions.
  • Sometimes, in a very simple estate, it may not be necessary to apply for probate. The lawyer can help determine whether it is necessary. Even if it is not a legal requirement, the lawyer may recommend it in some cases. For example, there may be a dispute as to who the executor should be, a dispute as to whether a document is the last will or is valid or how to interpret it, etc.
  • From this point, the executor can rely on the assistance of their laywer to apply for probate and guide them through the process of administering the estate.
  • The executor should remember that they can be personally liable if they distribute estate assets without first paying debts or taxes of the deceased. They can also be personally liable to beneficiaries if they distribute improper amounts or assets to the wrong person.

    Government

  • Apply for the Canada Pension Death Benefit for the estate.
  • There may be survivor benefits under the Canada Pension Act that the surviving spouse or infant children can apply for.
  • Notify the Canada Pension office and the Old Age Security office of the death. The estate will not be entitled to cash their cheques. Often they are being deposited to the bank account of the deceased directly.
  • A tax return will need to be filed with the Canada Revenue Agency covering January 1 to the date of death of the deceased. Depending on the date of death, it can either be due by the following April 30th but it may be due 6 months after the date of death if, for example, the date of death was in November or December. Check with the CRA to be certain instead of relying on this article as requirements may change. You will want to verify everything with the CRA as there are penalties and other charges for late filing and late payment of taxes.
  • Another tax return must be made for the estate of the deceased running from the date of death to December 31st. The estate lawyer can put you in contact with an accountant if you don't know one. Again, ensure you meet the CRA's filing and payment deadlines to avoid penalties and other charges.
  • Estate tax returns must be filed every year afterwards until the estate is finalized.
  • When the last estate return is complete, the lawyer will apply for a Clearance Certificate from the Canada Revenue Agency. The government is in effect closing their books on the deceased's social insurance number.

    Banking

  • Gather information about bank accounts.
  • Let the bank know about the death so that they can ensure no one attempts to make improper withdrawals. They should also cancel credit cards and lines of credit.
  • If there are loans or debts owing, arrangements will need to be made to see these paid off. They may have to wait until assets are sold.
  • Typically once probate is granted, the lawyer would ask the banks to close the deceased's bank accounts and send the funds to the law office to be deposited in their trust account. Alternatively, the executors may prefer to open their own estate account. This is something to be discussed between the estate lawyer and the executors.
  • If there are other investments such as savings bonds, etc. the law firm acting for the estate will arrange to redeem them.

    Other Matters

  • Ensure that the deceased's home and other property is secured, insured, properly maintained and that utilities are connected. Arrange for periodic inspections to ensure nothing is damaged, heat is on in the winter and there are no breakins. Consider shutting off the water heater output valve and outside taps or whatever is prudent under the circumstances. Speak with your insurance agent. There are likely special insurance requirements to maintain valid coverage when a house is vacant. Otherwise there may be no coverage.
  • Motor vehicles of a deceased can usually be operated for a short while after the date of death, but check to be certain. The consequences of operating an unlicensed or uninsured vehicle can be devastating.
  • If there is an insurance policy with a named beneficiary other than the estate, that beneficiary will be entitled to the insurance proceeds. In that type of case, the proceeds will not form part of the estate.
  • Check if there are life insurance or pension benefits through the deceased's employment. Remember depending on who the beneficiary is ... the estate or someone else, this may not be estate property. The appropriate owner of the benefit should initiate the applications.
  • There are often other accounts that need to be located and cashed in. For example, there may be a Co-op membership that can be cashed in or possibly transferred over to a surviving spouse beneficiary.
  • If the deceased owns a business or rental property, you will need to ensure that they carry on as necessary.
  • If the deceased was a farmer, someone will want to ensure that crops are sprayed or harvested, etc and possibly the land is rented out so it does not sit idle and deteriorate with weeds. If there are tenants on the land, details of the lease should be obtained and plans made to collect the cash rent as it falls due or share of the crop. Arrangements also need to be made for incoming payments with the Canadian Wheat Board or other similar matters. Check if the deceased had committed to advance crop sales so cash crops are not sold and delivered to the wrong party. If the executor is not fully familiar with the farming business, consult with someone who is to ensure nothing is overlooked.


    This is only a very brief summary of some initial steps to be considered by the executor of an estate. Funeral Homes have developed very good checklists over the years and typically they will give them to the spouse of a deceased and/or executor as part of their information packages.


    Notice: The information on this website is general in nature only. It relates to Saskatchewan, Canada and may not be applicable in your jurisdiction. It does not constitute legal advice to you and no solicitor client relationship will be established. You should seek specific legal advice regarding your circumstances from a lawyer entitled to practise law in your jurisdiction.

    www.rickcarlson.com | Mon, 25 Sep 2017 19:17:43 CDT1