The Duties of an Executrix or Executor when Probating an Estate
The executor of an estate gets a raw deal. Films and television programs show them meeting the grieving family, reading the will, and disappearing into the night.
In reality, the executor of an estate takes on what may become the equivalent of a job depending on the size and complexity of the state.
When a person dies, he or she is no longer legally allowed to own any property. Stocks, real estate, businesses, and even animals must be transferred to another party. Those who create a will may choose to leave their remaining assets to their family, friends, charity, or a combination of the above.
Carrying out a person's last wishes isn't as simple as reading the will and handing out the items listed. That's why the will nominates an executor for the estate to guide the estate through the legal process and distribute all the assets.
What does an executor of an estate do? Keep reading to find out what's involved in the execution of an estate.
What is an Executor of an Estate?
The executor of an estate is the appointed person who takes over the affairs of a probate estate. You're not appointed randomly: the deceased nominated you when they made their will.
A probate estate is made up of all the assets the deceased person held, whether solely their own or held with other people as tenants in common (jointly owned property does not fall into the estate). The probate application is an application before the court to, in part, obtain a ruling that the will guiding the estate is genuine.
For example, if there's a question about the mental state of the decedent at the time they signed the will, it will be challenged here. If beneficiaries wish to contest the will, it will also be during this process
When the Order of Probate is issued, the person named to adminsiter the estate then begins following the instructions left in the will.
Executor, Executrix, Administrator, and Administratix
Executrix is a dated term referring to a female executor of a will. Administrator and administratix refer to the same thing in the event there is no will and an application for Letters of Adminstration is applied for rather than applying for Probate (when there is a will).
In simpler terminology, the primary difference occurs at the point of appointment. The deceased appoints an executor or executrix. If the decedent fails to name one in their will; or fails to have a will, then the court takes over. A person appointed by the court is an administrator.
Whether executor or administrator, each then take on the same roles. A more common term for this position is Personal Representative of the Estate.
An executor doesn't always act alone. They may choose to hire a probate lawyer to speed up the process, avoid claims made against estates, and avoid personal or legal complications.
What Does an Executor of an Estate Do?
Every will should include six essential parts:
- Nominated executor
- Powers granted to the executor
- Beneficiaries of the will
- How to distribute property
- Guardians for minor children
- Trusts for minor children
Becoming the executor of an estate is both an honor and hard work in equal parts. More importantly, your powers are granted and limited by the decedent in the will, so no two executors find themselves completing the same tasks in the same way.
If you want to avoid the chaos that inevitably comes with probating a will, it's best to follow a process. Rather than list the duties randomly, we chose them to present them in a useful order according to where to start.
1. File Your Copy of the Will with the Probate Court
Your first task is to obtain a copy of the will and file it with your local probate court as part of the Probate Application.
If the decedent owned property in other provinces, you must file probate proceedings in each state by having the Will "sealed" and brought into that jurisdiction.
Beyond this, you must read and understand the contents of the will.
2. Get in Touch with Financial Institutions and Government Agencies
A decedent can't hold a bank account or receive government benefits, so you'll need to report their death.
In most cases, the funeral home will report deaths to the government when they file a death certificate. If not, you'll need to report it to the relevant authorities.
You'll also need to contact all the banks the estate owner holds accounts with to let the bank know about the death.
In an ideal scenario, the bank accounts will be held in a trust, and everything will be rolled over. However, if the estate forgets an account, no one has access until the estate is settled.
3. Set Up a New Bank Account for Incoming and Outgoing Funds>
Start a new bank account for the estate to make life simpler. Any paychecks owed to the decedent are paid here. If there are any recurring bills like mortgage payments or other loans, pay these out of this account as the probate process continues.
4. Set Up Your Inventory, Appraise and File It
Your state may require you to create a detailed inventory of the estate. If it does, get started early.
An inventory is required in part because Alberta requires a full appraisal of the estate to ascertain the total cash value. Only when the real cash value is estimated can the court be sure the estate will be divided equally.
Appraisals also help the government assess the correct taxes.
Who completes the appraisal? It may be you. Executors and administrators may be required to estimate the cash value of the decedent's liquid assets. These assets include investments, bank accounts and valuable property like real estate.
Non-cash assets like art, antiques, or businesses may need a professional appraisal. Real Estate Appraisers are also required for all real estate holdings as well.
5. Obtain the Order For Probate
Once the Application is filed, the beneficiaries will be served with a copy of the application which will include a copy of the will, a copy of the inventiory; and, a copy of proposed distribution and name of Personal Representative. If no one contestes the will, after a short period, the Probate Judge will simply issue an Order of Probate determining that this is indeed the last will (no competing wills can be brought forward); the person named is indeed the Personal Representative (Executor/ Executrix); and, once they have disbursed the Estate, they are absolved of any further liability.
6. Pay Off Debts
When a person dies, he or she is de-registered from the tax system, and the government collects one final tax bill that encompasses any income, retirement funds, and re-captures assets that weren't previously taxed.
You'll file a final income tax return for the current year and pay income tax due. Income tax only needs to be paid from the first of the year until the date of death, but it includes many different parts.
Fortunately, Canada doesn't collect inheritance tax on an estate or a beneficiary. Some assets are taxable if they're cashed in: capital gains are assigned a rate of 50%. Additionally, the government de-register your registered retirement savings plans or income funds (RRSPs/RRIFs) and pays them to a beneficiary.
If the RRSPs and RRIFs are paid out to anyone but a spouse or common-law partner, the full value of retirement plans is reported on the final tax return.
Additionally, the estate must pay all mortgages, credit cards, auto loans, and any other debt before distribution.
How do you know what's due?
Start by publishing a notice that lets creditors know that the estate is in the process of finalization. You'll then receive claims from creditors to pay before closing the estate.
7. Keep an Eye on All Property
Many estates come with some form of property, and property requires maintenance.
If you're dealing with real estate, be prepared to participate in upkeep on the house to ensure it's ready to sell regardless of whether it will be sold in the end.
Personal property in the estate also needs to be protected. Valuable items should be moved to a safety deposit box if possible.
You're not just on the lookout for nature or crime. Complicated legal proceedings might see the family attempt to take matters into their own hands before the will is executed.
Even if a family member wants something the will entitles them to now, it's important to finish the probate process before distributing assets according to the will.
8. Distribute What's Leftover According to the Will or Law
After tax, distribution is carried out according to the wishes expressed in the will. You're required to follow these to the letter even if the family request and agree on an alternative.
For example, if the will left a primary residence to one heir and a second home to another, and they want to trade properties, you cannot legally do this. You must transfer the titles as directed by the will. Who owns each house after the beneficiaries receive the titles from the estate is up to the heirs.
If you have issues with distribution, you might consult a probate or estate lawyer.
9. Dispose of Leftover Property
It's common to find some property that is unwanted by those named in the will. In some cases, the decedent neglected some items and didn't provide specific instructions for them in the will. Anything leftover must then be disposed of in good time.
In most cases, you'll plan an estate sale. It's possible to handle this yourself or work with a full-service estate sale or auction agency.
To dispose of the property, you'll start by taking a full inventory of remaining assets and attempt to sell them. Any proceeds from the estate sale go back into the estate to be distributed to the beneficiaries.
Any items left over from the estate sale can be donated to charity or thrown away after the heirs have confirmed that they do not want them.
How Long Does It Take to Probate an Estate?
Probate takes weeks, months, or years depending on the complexity of the estate.
Larger estates featuring more debts, assets, and complex holdings tend to take longer to probate, especially if you must execute it in multiple jurisdictions or countries.
Each action often requires approval from the court before occurring. Thus, the executor is required to file a sometimes excruciating number of court filings.
The Duties of an Executor Depend on the Estate
Ultimately, the duties of an executor of an estate depend on the size and type of estate and how well the deceased planned for their death.
Whether you're the executor or the beneficiary, you can benefit from the services of an Probate Lawyer experienced in estate law. A lawyer will help with court proceedings, untangle complex legal issues, and help lift the weight of the probate from your shoulders.
Do you have a question about probates, wills, or estates in general? Visit our legal resources page to learn more about the process.