- General advice to executors or beneficiaries
- Locating and interpreting Wills
- Assisting executors with their duties such as contacting financial institutions and notifying beneficiaries or obtaining valuations
- Preparing and filing probate applications
- Preparing beneficiary releases (confirming acceptance of inheritance)
- Preparing estate accounts in legal format (called "court passing" format)
Estate administration refers to the process of winding up the financial affairs of a person who as passed away. Every estate is a little different so the specific tasks will depend on what the person owned, their legal obligations and the terms of their Will if they had one.
Many estates may also require a probate application. Probate is the process of formally proving a Will, if there is one. It can also refer to the process of appointing an estate trustee (executor) where there is no Will making the appointment or the person named in the Will is not able to act.
Where there is a Will, the person who is appointed in the Will derives their authority from the Will and not the grant of probate. Why then is probate needed? The reason for probate is to protect third parties such as banks who are relying on a particular Will and estate trustee appointment. If the Will is probated, Ontario law protects third parties from liability in case it turns out later that the particular Will is not valid.
Ontario law does not mandate that all Wills be probated. The request for probate is at the discretion of third parties dealing with the estate. In some instances it may be possible to avoid probate but large deposits at financial institutions and brokerage accounts generally require probate. Also, land held in the Land Titles system requires a grant of probate in order for it to be transferred unless the property qualifies for the first dealings exemption. Avoiding probate can often require the estate trustee to provide a personal guarantee which is not ideal.
In the case where there is no Will, there is nothing appointing an estate trustee to wind up the estate. This means there is no representative to deal with third parties and provide instructions for the payment of bills or the transfer of assets. Therefore, probate is almost always needed if someone passes away without a Will. Occasionally, exceptions will be made but it is best not to count on this happening. Even if an exception is made, it may require the person to provide a personal guarantee to avoid probate.
As stated, estate administrations can vary but there are some common elements such as: making an inventory of assets and obligations; securing real property and other valuables; arranging for the payment of debts; finding and interpreting any Wills; arranging for tax filings; selling and distributions assets of the estate. Also, depending on the nature of a particular estate, there may be deadlines that have to be met to protect the value of property or avoid penalties.
Regardless of the complexity of an estate, estate trustees are personally liable for their actions. Fortunately, while estate trustees cannot delegate responsibility for decisions they can hire professionals to assist them in carrying out certain functions. This can include accountants, lawyers and financial advisors. Another consideration to help reduce the financial risk of acting as an estate trustee is executor's insurance which is now available in Ontario.
Being appointed as an estate trustee can be seen as an honour, but is not a task to be undertaken lightly since once you start to act, you can only stop by applying to court to be removed and the court does not have to grant the application. Therefore, before accepting an appointment and starting to act you should understand what is involved and your options.