It’s no secret that the population is aging. Over the next decade, baby-boomers will be inheriting substantial amounts of money and it is estimated that they, in turn, will leave behind a trillion dollars in estate property to their loved ones.
In addition, estate administration consists of a number of duties entrusted to an executor (often referred to as an estate trustee or where there is no will, an administrator) when someone deceases and last until the assets of his or her estate are distributed to the beneficiaries. This includes managing the assets or the estate and attending to legal and tax requirements.
As an individual, these roles can represent a daunting set of tasks. At a time when we are grieving as well as managing our own day-to-day roles, piling on these additional responsibilities may be more than someone may wish to take on. If you’re planning your will, consider alleviating this burden by naming a trust company together with a family member (or friend) to act as co-executors. By doing this, the grunt work is executed efficiently by the trust company that has access to a team of legal, trust and tax professionals, while your family member takes on a consultant role in the process. Also, the fees charged by the trust company may be negotiated in advance, which would eliminate any concerns over egregious fees.
Also, if you’ve been named as an executor, you may elect to hire CIBC Trust to professionally perform some or all of the tasks on your behalf to alleviate the stress and risks of executing a will.
If the deceased has not appointed an executor or the appointed executor has renounced the position, is unable to fulfill the responsibilities or has died, or if no will exists (called ‘in testate’), the court must appoint someone to act as the administrator or estate trustee.
The following is a helpful guide for executing a will. It is by no means exhaustive, however it can help to get you started. Feel free to share, and if you’d like any assistance or a referral to a qualified trustee through CIBC Trust, please contact our office at 1-800-798-0044.
Documents to collect:
- Will and codicil
- Death certificate
- Deceased’s birth certificate
- Driver’s license, passport, healthcare card, social insurance card or number
- Last 3 years income tax returns
- Expense receipts, medical expenses, charitable donation, and income documents for tax preparation
- Car, home and life insurance policies
- Bank books and account statements (paper or electronic)
- Mortgage and loan statements
- Investment Statements (paper or electronic)
- Credit cards
- Property titles & tax bills
- Any outstanding bills to be paid
- Name, address & phone number of related parties (beneficiaries, executors, guardians, immediate family members, trustee, accountant, lawyer, investment advisor, banker, insurance broker, healthcare provider,
- Social Insurance Numbers of beneficiaries
Steps to take (by a trust company or the individual executor)
- Read the will and provide explanations
- Collect information and documents (above)
- Obtain death certificates
- Probate the will:
- Complete inventory and valuation of assets
- Identify and locate beneficiaries
- Determine and pay probate fees
- Apply to court to obtain probate
- Notify beneficiaries
- Advertise to creditors
- Settle any claim under family law or dependents’ relief
- Payment of general and specific gifts
- Convey real property
- Obtain releases
- Analyze taxes and undertake recommendations
- Prepare income tax return (T1)
- Prepare terminal tax return (T3)
- Receive notice of assessments
- Request discharge certificate
- Contact financial institutions, life insurance, credit card companies, employer, CPP, OAS, etc.
- Verify insurance coverage and update as required
- Calculate expenses for funeral, taxes, debts, gifts, claims
- Assess assets
- Recover assets from various institutions
- Transfer registered accounts
- Transfer or sell vehicles
- Sell property, as required
- Establish a trustee account
- Analyze financial consequences & recommendations
- Collect interest, rents, and accounts receivable
- Temporarily invest cash
- Pay funeral costs, income taxes, property taxes, outstanding bills and debts, executor fees, gifts, claims, etc.
- Interim distribution of residue
- Establish testamentary trusts
- Final distribution of residue