How long does an executor have to settle an estate in Alberta?

How long does an executor have to settle an estate in Alberta?

The executor, also known as the personal representative, is the person responsible for carrying out the wishes of the deceased as set out in the will. In Alberta, the executor’s responsibilities are set out in the Estate Administration Act. While the legislation does not set a deadline by which an estate must be settled, it does require an executor to “distribute the estate as soon as practicable.”

Estates vary greatly in complexity and in the number of tasks that an executor will need to accomplish before the estate will be considered settled, therefore it is impossible for the province to set a hard deadline for executors. Generally, the Alberta courts expect an executor to distribute the estate to the beneficiaries within a year of probate being granted.

Whether you are an executor or a beneficiary, our wills and estates lawyers can help analyze your particular situation and determine how long an executor has to settle an estate in Alberta in your case.

Responsibilities of an executor in Alberta

The executor's most pressing responsibility after the death of the testator is to make funeral and burial arrangements. After that, the executor's responsibilities include:

  • identifying, collecting and preserving the assets of the estate
  • probating the will, if necessary
  • advertising to inform potential creditors of the testator's death
  • paying any debts and taxes owed by the estate
  • distributing the estate to beneficiaries
  • accounting for the administration and distribution of the estate.

Depending on the complexity of the estate, some duties may be unnecessary. Probating a will, for example, is only necessary if the executor needs to prove the validity of the will to the Land Title Office or to a financial institution. It is often not required for a small or simple estate as the title to certain assets may pass directly to beneficiaries.

What affects the length of time an executor takes to settle an estate in Alberta?

The size and complexity of the estate will be the primary factor affecting how long an executor has to settle an estate in Alberta. An estate with many assets and liabilities may:

  • require the will to be probated, which may take several weeks or months
  • be more likely to be the subject of disputes or even litigation relating to the will, taxes or other liabilities
  • include assets that are more difficult and time-consuming to liquidate and distribute, such as a business or multiple properties
  • require the creation or dissolution of a trust.

While there is a general expectation that a relatively straight-forward estate should be settled in approximately one year, the executor can only do their best and that is all that the courts expect.

Contact our Edmonton Estate Administration Lawyers Today

If you are the executor or the beneficiary of an estate and you have concerns about the amount of time that has passed since the testator's death without any distribution to the beneficiaries, our wills and estates professionals can help. Contact us today to get advice from an Edmonton wills and estates lawyer.

Disclaimer: Please note the content in this article is not intended to act as legal advice. For more specific legal advice please consult with a family lawyer.

9 Costly Mistakes to Avoid as Executor of an Estate

9 Costly Mistakes to Avoid as Executor of an Estate
Have you been named executor of your deceased loved one's will? This is a critically important role. To avoid any missteps along the way, here are 9 costly mistakes to avoid from the start.

When a loved one dies, you know that planning the funeral and dealing with the emotions associated with the loss is only part of what you need to think about.

You'll also need to understand how to settle the estate and distribute the assets out to any beneficiaries.

If you've been declared as the executor of an estate, this will be your responsibility.

This can sometimes be an involved process -- and it's easy to make a mistake.

This post will tell you what you need to look out for so that you can avoid some of the most common mistakes made when estate planning.

We'll also let you know where you can find proper legal help to make things easier.

1. Not Moving Quickly Enough

We know that the emotional pain of losing a loved one can make it hard to move forward with the probate process.

But as an executor of an estate, it's important that you understand time is of the essence -- and that waiting too long to begin will make the process even harder.

Remember that the longer you wait to begin, the higher your taxes will climb. Creditors will start to hound you, and of course, those who stand to inherit something from the estate will begin to get frustrated.

Plus, the faster you move, the better that you'll be able to protect all the assets of your estate. If you're inheriting something like a home or another piece of property, you need to make sure the home and the things in it aren't left vulnerable.

Additionally, you might be subject to nonpayment penalties when it comes to taxes or mortgages on the home.

Above all, ensure that you get control over the accounts, debit/credit cards, and other financial records as quickly as possible.

You don't want to cause any strain between yourself and your family members, and you also don't want to be taken advantage of.

2. Jumping the Gun on Distributions

While you're of course aware that there can be a penalty or other problems if an executor fails to distribute, taking those distributions too early can also cause you some serious problems.

You'll need to hold off on making those distributions after liabilities and taxes have been paid. If you make those distributions before then, you as the executor of the estate will be held responsible.

Making these types of early distributions is often referred to as "at risk distributions."

If you end up with a sudden claim but have already made distributions, you don't want to have to pay penalties and fees.

Even if you miscalculated even slightly, the fact that you made early distributions could land you in hot water.

So, in short: when in doubt, wait it out.

3. Not Working to Create a Detailed Asset Inventory

One of the best ways to not only keep the peace between heirs of the estate, but to also ensure that the process goes as smoothly as is possible?

Making sure that you've worked to create an asset inventory of the estate. This is especially key if you have real estate to deal with.

Be aware that this inventory list should have only what's been gathered and given to an administrator to take control over.

You should also consider things like jewelry, cash found in the home, specific family heirlooms, pieces of furniture, and much more.

What about royalties, bank accounts, or investment accounts?

And will these assets be given to estate heirs by the will, or through the process of intestate succession?

These are all important things to consider -- and if you have older relatives who are still living?

You might want to think about sitting down with them now and going over the assets that they have.

Though the conversation may be awkward and even emotional, it will increase the chances that things go the way your relative would have wanted once they've passed away.

4. A Failure to Hire a Lawyer

The truth is that the probate process can get incredibly complicated very quickly -- especially if you're the executor of an estate.

You might think that you're familiar with the process in general, but find that the specifics of the estate you're controlling are simply too tough for you to handle.

Even if you don't hire a lawyer to guide you through the entire process?

It's a smart idea to at least schedule a consultation with a lawyer before you begin.

This way, you'll be able to figure out the next steps to take, and whether or not your case will be complicated enough to hire a lawyer.

Remember that, in addition to a lawyer, you may also want to speak with a financial planner or a CPA. The same goes with real estate professionals in the local market, as well as estate planning professionals.

We strongly suggest that if the estate is located outside of the city where you live, that you rely on a legal professional to help you.

5. A Lack of Detailed Records

Earlier in this post, we spoke about how it can sometimes take several years for an estate to be settled completely.

But when beneficiaries want a quick payout?

They can put pressure on you to speed up the timeline.

They may even become suspicious about what you're "really doing" with the money and the assets.

To help them to understand the process -- and to clear your name of any potential wrongdoing -- it's important that you keep as many records as possible. This becomes even more essential if the investments made in estate financial accounts have dropped in value.

You need to create a paper trail that proves that you as the executor have done your due diligence when it comes to communicating with lawyers, financial planners, and more.

The more transparent that you're able to be, the less likely you are to have serious problems on your hands down the line.

We recommend that you begin the entire estate process by reading the will out loud to all of the beneficiaries.

This will cut down on the potential for misunderstandings and will prevent beneficiaries from making untrue or unfair claims down the line.

6. A Lack of Understanding of an Executor's Responsibilities

You also need to make sure that you can answer the basic question, "What is an executor of an estate?"

Many people think that they understand the responsibilities they will need to take care of -- but often, there's a lot more to the process than they realize.

They also fail to understand how they'll legally be held responsible for the estate and the assets within it.

In other words, it's not just about getting the money out to any beneficiaries.

You'll need to make sure you've listed and taken care of the cost of administrating the estate, that you have the ability to remain impartial, and that you're doing things as the deceased would have wanted.

You'll be responsible for making sure you allocate any taxes between the beneficiaries, and that you liquidate securities if needed.

You also need to make sure that you pay any taxes on properties owned by the deceased.

You also need to work to make sure you don't miss any of the estate's mortgage, car, or other forms of insurance payments. Even if you hire a lawyer to help you, know that, as the executor of an estate, you'll still be held responsible.

7. Problems with Digital Assets and Records

You know that our dependence on technology is greater than ever -- but did you know digital records also play a serious role in the probate process?

Even if you have the login names and passwords to the deceased's accounts?

You will need to make sure you're not committing a crime by going into them.

Be aware that some provinces don't allow you to access those digital accounts because this is seen as a violation of privacy laws.

We strongly suggest that you have a lawyer on your side if you'll need to deal with digital accounts. The last thing that you want to have happen is for you to end up being charged with hacking.

8. Waiting Too Long to Put Real Estate up for Sale

We understand that it can sometimes be a challenge to put up a loved one's home for sale after they've passed on.

But as an executor of an estate, it's essential that you act as quickly as you can in order to make the greatest possible gain on the property.

Try to take your emotions out of selling the home.

If needed, hire a professional organizer, home staging company, or cleaning service to come in and help you to speed up the process. Dedicate a weekend with other family members to meet and go through the items in the home.

You'll need to decide whether or not the home is in need of renovation or any repairs. If so, be aware that this will add to the overall timeline of the sale.

You might even consider selling your home for cash, especially if you need access to capital as soon as possible. A cash home buyer is also an excellent option if the deceased's home is in particularly bad shape.

Also, be aware that as soon as you're made the executor of an estate, you have the ability to list the property for sale.

The sooner you move on this, the better.

This is because you'll be able to field multiple offers, which will often lead you to getting a much higher one than you would if you're in a rush to sell.

Remember that you can't actually close escrow until you have letters of administration in hand. Just be upfront about this fact when you communicate with any potential buyers.

9. Improperly Closing the Estate

What happens if an estate is not settled?

In short, nothing good.

Many unaware executors think that, as long as the money has been distributed to the beneficiaries, their work is done.

This couldn't be further from the truth.

First, you'll need to pay off any of the debts associated with the estate -- which means you'll need to let creditors know that you're now in charge.

You should have filed tax returns and made tax payments and made a file final accounting agreement with your probate court. This is essentially the list of all the assets and expenses associated with the estate.

If you want to avoid a hearing, you'll need to have all of the beneficiaries sign this file final accounting. Then, you'll need to actually make the distributions themselves.

Finally, you must file a closing statement to the probate court. Essentially, this document proves that you've made all the required distributions as directed by the will.

Need Legal Assistance as an Executor of an Estate?

We hope that this post has helped you to understand the mistakes you're likely to make as an executor of an estate.

You need to make sure that you're as transparent as your family members as is possible, and that you fully understand what the responsibilities of acting as an executor of estate actually entail.

Above all, you need to hire the right kind of legal assistance to make sure that everything goes as smoothly as is possible.

Especially when you're dealing with the emotions of the loss of a loved one, it's easy for things to get lost in the process.

We want to be the ones to help you.

Spend some time on our website to learn more about the services we offer.

When you're ready to begin the estate planning and execution process, reach out to us.

The Duties of an Executrix or Executor when Probating an Estate

Estate law regulates the will, probate and other topics related to the death of a loved one. An executrix or executor of an estate is expected to perform specific duties in accordance with this law. Here's an outline of what's involved.

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.