Executors
You may have been asked to act as the executor ("executrix" is the female form but is dropping
from usage) for someone else's estate.
Perhaps you are considering making a will and need to name someone to act as executor
for your own estate. Whether you are considering acting as an executor under a will or
naming someone to act as executor under your will, there are some factors to consider.
An executor is a person named in a will who is entrusted with the duty of carrying out the
provisions under a will. An executor's duties may include determining the assets and debts
of the estate, paying outstanding debts, ensuring tax returns are properly filed, selling
property if necessary, and distributing the remaining property according to the deceased
person's will.
If you are making a will you should make sure that the person you plan to name as executor
is willing to act. A person cannot be forced to act as an executor if they do not wish to
do so. If a named executor chooses not to act they must sign a document indicating that they
are giving up the right to act as executor. Then another person must apply to the court for
the right to administer the estate. It is important that a person making a will has talked the
matter over with their nominee(s) for the job and that the executors are prepared to do the job.
If a nominee is not willing don't press the point. This is an important job and your nominee
should be completely willing to do the job
In most cases an executor must obtain a will before dealing with the estate. Probate
means to prove that a will is valid. The executor must file a Petition for Probate with
the appropriate. If everything is in order, the court will make an order granting
Letters of Probate (or Administration depending upon the legal jurisdiction) to the executor.
The Grant of Probate shows that a court has accepted the validity of
the will and the executor's authority to deal with the estate. When dealing with the estate it
will be necessary to show the grant as proof of the executor's ability to deal with such things as
bank accounts, the transfer of shares, registration of real estate transactions and so on.
If an estate has no real property, it may be possible to deal with the estate without
probating the will. An executor can determine whether this is possible by contacting the
places that hold the deceased’s assets. Will they release the assets to the executor without
Letters of Probate?
An executor may be reluctant to act because of a fear that they might become responsible for
the deceased's debts. An executor is not responsible for debts that exceed the value of the
estate. However, if an executor distributes the estate improperly, they may become responsible
for losses that occur as a result. An executor cannot distribute the estate to the
beneficiaries before the debts of the estate are paid. Executors can protect themselves
from liability by putting notices in local newspapers to find out if there are any outstanding
debts.
Executors must also make sure that all necessary income tax returns are filed and that
income taxes are paid. Executors should get a clearance certificate from Revenue Canada
before distributing the estate. After an executor receives a clearance certificate Revenue
Canada cannot come back to the executor personally to pay any unpaid tax.
When distributing the estate to beneficiaries, an executor prepares a report for the
beneficiaries showing how their shares were calculated. Beneficiaries must sign a release
indicating that they accept the executors accounting. If beneficiaries do not accept the
accounting, an executor can apply to the court to approve the accounting.
A person chooses an executor because they have confidence in that person’s ability to
carry out their wishes honestly and in the best interests of the beneficiaries. Some
estates are more complicated than others. Many people choose to see a lawyer to assist
them in their role as an executor. Sometimes other professionals, such as accountants,
are involved. In most jurisdictions executors are entitled to compensation for their efforts
in administering the estate. Executor fees vary according to the difficulty of the estate
and the amount of work they handle. Executor's fees may be determined by agreement with all
beneficiaries, or a court may determine them if no agreement can be reached. Executors may
waive their fees or may agree to just be paid for actual out-of-pocket expenses.
