An estate trustee, the person most people call the executor, is personally responsible for collecting everything the deceased owned, paying what the estate owes, and giving the rest to the right people, with records to prove it. The role carries real liability, but it is manageable when it is done in the right order.
The first week
- Arrange the funeral. The estate trustee has the legal authority over funeral and burial arrangements, and reasonable funeral costs are paid from the estate.
- Locate the original will and any codicils. Check with the deceased's lawyer, safe deposit box and papers at home.
- Secure the home, vehicles and valuables. Tell the home insurer the property is vacant; most policies require notice.
- Obtain proof of death from the funeral director and order several death certificates from ServiceOntario.
- Tell close family and the named beneficiaries that you are the trustee and that you will be in touch.
The first month
- Make a complete list of assets and debts, with each asset's value at the date of death. This list drives the probate application, the tax, and your accounts.
- Notify banks, investment firms, pension providers, insurers, the Canada Revenue Agency, Service Canada, and the deceased's employer.
- Apply for the Canada Pension Plan death benefit and any survivor benefits.
- Cancel subscriptions, driver's licence, health card and passport, and redirect the mail.
- Decide whether probate is needed. Do you need probate in Ontario?
- Open an estate bank account. Never run estate money through a personal account.
Probate
If a certificate is needed, the application is prepared, the beneficiaries are served, the Estate Administration Tax is calculated and the file goes to the Superior Court of Justice for the region where the deceased lived. How the probate application works, and how long it takes.
After the certificate
- File the Estate Information Return with the Ministry of Finance within 180 calendar days of the certificate.
- Present the certificate to each institution and move the assets into the estate account.
- Consider advertising for creditors. A published notice protects the trustee from claims by creditors who did not respond.
- Pay valid debts, including the funeral, from the estate.
- Sell or transfer real estate, vehicles and investments as the will directs. Selling an estate property.
- File the deceased's final income tax return and any returns for the estate itself, and pay the tax owing.
- Request a clearance certificate from the Canada Revenue Agency before the final distribution. Distributing without one leaves the trustee personally exposed to unpaid tax.
- Distribute to beneficiaries, obtain releases, and keep a full set of accounts showing every dollar in and out.
Compensation
A trustee is entitled to fair compensation for the work unless the will says otherwise. Ontario courts commonly test a claim against a guideline of 2.5% of capital and income received and 2.5% of capital and income paid out, roughly 5% of the estate over the whole administration, plus an annual care and management fee of two-fifths of one percent where an estate is held for a long period. The amount must be reasonable for the size of the estate, the care and skill required and the time spent, and it can be reduced by the court. It is taxable income to the trustee. Many family trustees waive it, particularly where they are also the main beneficiary.
Mistakes that create personal liability
- Paying beneficiaries before debts and taxes are settled
- Distributing before the clearance certificate, without holding back a reserve
- Mixing estate funds with personal funds, or using estate money for personal expenses even temporarily
- Favouring one beneficiary, including yourself, in timing or in kind
- Selling estate property to yourself or a family member without full disclosure and consent
- Losing track of receipts and payments, so that accounts cannot be passed if challenged
Each of these is avoidable with ordinary care, a separate estate account and advice at the two or three points where the decision is not obvious.
Common questions
Nothing in practice. Estate trustee is the term Ontario's court rules use for the person who administers an estate, whether appointed by a will or by the court. Executor is the traditional term and is still used in most wills and in everyday speech.
Ontario courts commonly use a guideline of 2.5% of the value of capital and income received, plus 2.5% of capital and income paid out, which works out to roughly 5% of the estate over the whole administration, plus an annual care and management fee of two-fifths of one percent in longer administrations. The amount must be reasonable for the work done and can be adjusted by the court. Family trustees often waive it. Compensation is taxable income.
Yes. A trustee who distributes the estate before paying its debts or taxes, who fails to file returns, who mixes estate money with their own, or who favours one beneficiary over another can be required to make good the loss personally. Keeping records and taking advice before each significant step is the protection.
Yes, as long as you have not started dealing with the estate. You sign a renunciation and the alternate named in the will, or the next person entitled, applies instead. Once you have begun acting, you need the court's permission to step down.
No, and many trustees do parts of the work themselves. Most retain a lawyer for the probate application, for the sale of real estate, and for advice at the points where personal liability is highest, such as before paying debts and before the final distribution. The lawyer's reasonable fees are an expense of the estate, not of the trustee personally.