This post has been a struggle for me to finish. It’s been sitting in my drafts for awhile now getting edited and added to now and again. Usually, that happens when a post is personal, but this one’s not. Instead, I’m talking about death, and that’s never an easy subject to tackle. We’re going for it today though because it’s important. And if you find yourself assigned executor duties for a loved one’s estate, then I really hope it will be helpful.
First of all, I’m sorry. If you are in this role, then it’s because someone close to you has passed and it’s now your job to get things handled. It’s a crap job but someone has to do it, and someone thought you were the best person for the job. I’m going to try and walk you step by step through what you need to accomplish.
What is an Executor?
An executor is the person (or multiple people) previously chosen by the deceased to fulfil the terms of their will. They will be in charge of the money in the estate and take a role in planning and paying for funeral arrangements, taking inventory of assets and belongings, and distributing those assets and belongings as laid out in the will. All this while dealing with the grief of losing a loved one.
In most cases, you will know beforehand if you are going to be the executor of someone’s estate. Most commonly the role will fall to a surviving spouse or adult children. If those aren’t available options, then it might be another relative or a close friend.
My parents are still around, and I hope they are for many years, but I know one day this role will fall to me. I’m an only child which means I have to take on the burden alone, but it also means their estates will be straightforward. It’s a discussion I’ve had numerous times with my parents. I know they have updated wills and POAs and I know at least the basics of their financial situation. I know where they bank and where they hold their investments, I know they have pensions and where they come from, and I know where they keep their relevant documents. If you haven’t already, do yourself a favour, and have the talk with your parents. It sucks, but it will make your life 100% more manageable in the event of their passing.
I want to lay this out as straightforward as possible and go step by step through the duties you’ll be responsible. Being an executor is not an easy job, and it can feel downright overwhelming. You won’t be doing it alone though. It’s a good idea to use the services of a lawyer to ensure everything is completed correctly and timely, especially if it’s complicated estate.
Check out this printable checklist that I think is also helpful.
Locate the Will
If you knew you would be the executor, then there’s a good chance you already know where the will is. If not, then good places to look are in a home safe, safety deposit box or with the deceased’s lawyer.
Once you have the will you will need to review it have an idea of how assets are to dispersed.
As executor, you are in charge of the estate’s finances, which means you’ll play an important role in planning the funeral and paying for it. You will also need to get copies of the death certificate from the funeral home or the government.
You need to inform anyone who is listed in the will and advise them that they are in fact beneficiaries and of the timing of the estate settlement. If you are concerned this won’t be a smooth process, or there will be a conflict then it’s not a bad idea to have a lawyer present.
This can include not only people but any charities named in the will.
Locate Important Documents and Inform Companies of the Death
You’ll need to get access to bank account statements, investment statements, life insurance documents, etc. The goal is to determine what bills the deceased was paying and what sources they were receiving money from. You will need to inform these companies of the passing and likely provide a death certificate as proof. Any unnecessary payments should be stopped immediately, and continuing payments should be redirected to an estate account. Forwarding mail to your address to ensure nothing is missed is also helpful.
Payments from a pension can sometimes redirect to a beneficiary, depending on the selected option. You’ll again need to contact the pension administrator to figure out next steps.
Companies each have their own set of rules for dealing with an estate settlement. Be prepared to spend a significant amount of time on the phone and take detailed notes of what you need to provide. Spreadsheets will be your friend.
To avoid identity theft, you should also cancel drivers licenses, passports, health care cards, social insurance numbers and any other forms of personal identification.
Set-Up An Estate Bank Account
As an executor, you are in charge of the deceased’s money. You will need a bank account to deal with any incoming or outgoing payments. This can include current balances in other bank accounts, cash you find in the home, income from CPP death benefit, outgoing expenses for the funeral or the care of dependents, bills for the maintenance of property, etc.
The estate account will act as a regular chequing account for use by the executor. If there are multiple executors, they will all need to sign off on transactions.
Take Inventory of Assets
You will also be in charge of taking inventory and securing any material goods (including property) until they can be dispersed to the beneficiaries. This can include vehicles, jewellery, and other personal possessions. If there is no surviving spouse, then you will also need to ensure any dependents (including pets) are cared for and that the housed is cleared of perishables.
Assets and belongings that are not designated in the will can be sold. It’s a good idea to do this in discussion with other beneficiaries or relatives to limit disputes.
If the deceased owned a home, you would need to maintain insurance on it. If they rented then the lease will need to be terminated, or a sublet arranged.
Ad for Creditors
Debts held by the deceased have to be paid off before payment of the beneficiaries. If they’re not, the executor may be on the hook for those overdue bills.
Likely you will dig up records of the majority of owed debts (credit cards, a line of credit, mortgage, etc.) but if you are concerned about missing something you can make a public announcement. An ad for creditors is usually placed in a local newspaper and will provide contact information for anyone who is owed (or believes they are owed) money from the deceased. A deadline to contact would also be included, usually 30 days. This can limit the liability of the executor.
You’ll need to weigh the importance of this based on what you know of the deceased. It’s not cheap, but it can be worth it to avoid additional costs and delays to the estate settlement. The last thing you want is an old business associate crawling out of the woodwork the day before settlement claiming the deceased owes them $2,500 from a decade ago.
If there was an active life insurance or mortgage insurance policy in place, you would need to contact the insurance company. They will let you know what is required to initiate the payout process to the listed beneficiary.
Remove Social Media Accounts
Today almost everyone is on social media. If you happen to have passwords for the deceased’s account, you can log in and delete the accounts. If not, you will need to contact the respective companies, inform of the passing and request the accounts be shut down.
Probate is the process of getting the will declared valid. Assets are not supposed to be distributed until probate is granted, and it can be a lengthy process. Small estates may be able to avoid probate altogether, but that is rare. What will help the process run smoothly is having a legally valid will and assigned executor.
The executor submits an application with all relevant documents to the courts and waits for the verdict. As simple as that sounds, it can still take three to four months to get a grant of probate.
Terminal Tax Return
Hopefully the deceased is up to date on their taxes as this will simplify the process for you. If not, you’ll need to file any previous years returns within six months.
The terminal tax return needs to be filed by April 30th the following year or six months from the date of death; whichever is later. Income earned between January first and the date of death will be included on the T1 Final Return, and any income earned post-death will need to be filed on a T3 Trust Income Tax and Information Return.
Distribution of Assets
Now that all debts have been covered and all assets accounted for, everything can be distributed to the relevant beneficiaries. You will again want to keep precise records and receipts of when and how the delivery was made.
Properties owned by the deceased can be sold (if they weren’t stipulated in the will), as can any leftover assets like vehicles and household belongings. There are companies you can hire to hold an estate sale if that’s not something you want to tackle yourself.
Once you have received probate, filed the final tax return and distributed assets according to the will you are done. Duties as executor fulfilled.
Do you get paid?
Good question and the answer is yes. Executors are allowed to charge a fee to the estate for their work. It does need to be approved by the court, and the amount will depend on the size of the estate. It’s an extremely challenging role so do not feel bad for taking a cut.
The best thing you can do if you’re the executor of an estate is be prepared. Gathering information before you are forced into the role will save you a lot of headaches when the time comes and ensure the process runs smoothly and as efficiently as possible. Know that it will be challenging and don’t agree to it lightly if you are asked.
Questions? Feel free to post them in the comments below. And if you have any experience as an executor I would love to hear about the good, the bad, and what you learned.
This post was proofread by Grammarly.