Ask the Money Lady,
Last week we had a question about choosing an executor for a Will and to follow that up I wanted to go through some of the duties your executor would have to do. It is not a simple task. The laws vary wildly from one province to another and I can’t stress enough, that if you are tasked with this job, you should always seek professional guidance. Here are some of the basic duties bestowed on an executor and some things to keep in mind when choosing one.
1. Arrange the funeral, cremation or burial (you will need 8-10 original death certificates). Obtain the ID, credit cards and most recent Will of the deceased (need 8-10 copies of the Notarized Will). Cancel the following on behalf of the deceased: driver’s license, cable, telephone, memberships, credit cards, subscriptions, or leases. Determine if there are any pre-authorized payments coming out of the deceased bank accounts. These accounts will need to be closed and a new bank account opened specifically for the estate (may need Probate). Close out their safety deposit box if they had one. The FOIP Act in Alberta protects the privacy of an individual even after death so it is necessary to seek professional advice when organizing their affairs.
2. Provide the beneficiaries named in the Will with a copy. Arrange storage of valuables and important documents. If the deceased had private insurance, advise the company of the death and arrange payment of any amounts owing under their policies. Life insurance proceeds should be paid to the beneficiary or the estate account. RRSPs will need to be rolled over to a spouse or eligible dependants.
3. Collect all debts or payments owed to the deceased, including promissory notes, corporate accounts, or accounts receivables. If the deceased was a business owner, obtain a copy of the partnership or shareholders agreement to determine the estate’s rights, responsibilities, entitlements and liabilities.
4. Review the Will with a professional and determine if the estate is solvent and if probate is required. In Quebec, a declaration of heredity is required in most cases. At a minimum, a preliminary valuation of the estate should be done.
Determine the adjusted cost base for tax purposes of each capital property. If you do not live in the same province as the deceased, you may need to post a bond before taking over the estate to protect creditors or beneficiaries. This bond would be for the full value of the estate. In Quebec, you will need a “register of personal and movable real rights” by registration of a notice which will need to be publish in a newspaper circulated in the locality where the deceased resided at the date of death. Please seek professional advice to assist here.
5. Redirect the deceased’s mail to your address. All real estate should be transferred to the executor and any mortgagees will need to be notified. Contact all financial institutions to have investment accounts transferred into the executor’s name. Consider which assets should be sold or liquidated. Keep impeccable notes and run everything through the new estate bank account. Advise (CPP/QPP) Canada/Quebec Pension Plan and OAS-Old Age Security. Apply for and fill out the application for the survivors’ benefit for eligible dependants. Determine the deceased income for the year until death, capital gains/losses and tax obligations in or outside Canada. Prepare and file all necessary income tax returns to the date of death. Request clearance certificates from all relevant tax authorities. You may also need to file an estate income tax return. Please seek professional advice since rules vary by province.
Death is not a nice topic to discuss, but one that is necessary. If you are a business owner, have specific wishes, or simply feel that your estate would be better handle by a professional, you could choose a trust and estate service that are available at most financial institutions. Without the stress, grief and emotion, a trust company can carry out all necessary executor duties.
Good Luck and Best Wishes,
Written by Christine Ibbotson, Author of “How to Retire Debt Free and Wealthy” Follow on Facebook & Instagram