If you have been named as the executor of someone’s estate, you may be wondering where to begin.
There can be a surprising amount to do. You may need to locate the will, secure property, deal with banks, identify debts, communicate with beneficiaries, apply to court, arrange tax filings, and eventually distribute the estate. These processes are generally referred to as estate administration.
At Verhaeghe Law Office, our Edmonton estate administration lawyers help executors and other personal representatives understand their responsibilities and work through the estate one step at a time.
Contact us online or call (587) 410-2500 to arrange a consultation. We serve clients across all of Alberta.
Key Takeaways For Executors And Personal Representatives In Alberta
- Estate administration is the full process of handling a deceased person’s estate.
- Probate may be part of that process, but probate and estate administration are not the same thing.
- Executors and court-appointed administrators are both commonly referred to as personal representatives.
- A personal representative may need to identify assets, protect estate property, deal with debts and taxes, communicate with beneficiaries and make distributions.
- Not everything owned or used by the deceased necessarily forms part of their estate.
- Executors should be cautious about distributing money before they understand the estate’s debts, taxes and possible claims.
- Clear financial records and regular communication can help reduce disagreements with beneficiaries.
- An estate involving a business, real estate, missing beneficiaries, significant debts or a dispute may require additional professional assistance.
What Does An Executor Actually Have To Do When Administering An Estate?
Estate administration covers much more than reading the will and giving property to the beneficiaries.
Alberta law describes the main responsibilities of a personal representative as:
- identifying the estate’s assets and liabilities;
- managing and administering the estate;
- satisfying the estate’s debts and obligations; and
- distributing the property and accounting for the administration.
The exact steps will depend on what the deceased owned, what they owed, and what the will says.
A relatively simple estate containing a bank account and a few personal items may look very different from an estate containing a corporation, several properties, and beneficiaries living in different countries.
What Should An Executor Do First After Someone Passes Away?
You do not usually need to solve everything immediately when administering an estate.
If you have been named as a personal representative, useful early steps can include:
- locating the original will and any codicils;
- identifying the person named as executor;
- securing the deceased person’s home and valuable property;
- arranging care for pets where necessary;
- locating financial and tax records;
- notifying appropriate institutions;
- identifying urgent bills or property expenses; and
- beginning a list of assets and debts.
It can also be helpful to start a dedicated estate record from the beginning.
Keep copies of:
- bank statements;
- receipts;
- invoices;
- correspondence;
- tax documents;
- property records; and
- notes about significant decisions.
Good records can make the later accounting process much easier. If consulting with an estate administration lawyer, it can also be helpful to have these documents on hand.
Which Assets Are Actually Part Of The Estate?
One of the executor’s first jobs is determining what property falls into the estate.
Possible estate assets can include bank accounts, investment accounts, real estate, vehicles, businesses, personal property, and more. However, not every asset associated with the deceased necessarily becomes part of the estate.
Some property may pass directly to another person because of joint ownership, a valid beneficiary designation, or another legal arrangement that was entered into prior to the deceased’s passing.
That distinction can affect both probate and the amount available to beneficiaries under the will.
Executors should therefore confirm ownership rather than making assumptions.
What Happens To The Deceased Person’s Debts?
An executor does not normally distribute the estate first and deal with debts afterward.
Valid estate debts and obligations generally need to be identified and paid before the remaining property is distributed.
Possible liabilities that must be handled during estate administration can include:
- mortgages;
- credit cards;
- personal loans;
- unpaid bills;
- tax debts;
- funeral expenses;
- professional fees; and
- valid legal claims against the estate.
Alberta states that a personal representative who administers an estate must satisfy the estate’s debts and obligations where estate funds are available to do so.
This is one reason an executor should be careful about distributing money too quickly.
Does An Executor Always Need To Apply For Probate?
Not necessarily. Some estates require a court grant before estate administration can begin and others do not.
Whether probate is necessary often depends on:
- what assets the deceased owned;
- how those assets are registered;
- whether there are surviving joint owners;
- whether beneficiary designations exist; and
- what banks or other institutions require before releasing property.
For example, a financial institution may ask for a court grant before releasing an account held only in the deceased person’s name.
Our Edmonton probate lawyers can help determine whether a grant appears to be needed and prepare the application where appropriate.
How Are Tax Returns And Tax Debts Handled During Estate Administration?
Taxes are an important part of the estate administration process.
Depending on the circumstances, an executor may need to deal with:
- the deceased person’s final income-tax return;
- earlier unfiled returns;
- income earned by the estate after death;
- tax arising from investments or property; and
- tax documentation before a final distribution is made.
Executors should be cautious about distributing all available cash while tax liabilities remain uncertain. Accountants and tax professionals may work alongside an estate lawyer when the tax issues are significant.
The legal and accounting roles are different, but both can be important in a complex administration. Our Edmonton estate administration lawyers can connect personal representatives with accountants and tax professionals to ensure all financial aspects of an estate are considered.
When Can An Executor Start Giving Property To Beneficiaries?
There is no one date that is right for every estate. Before making a final distribution, an executor should generally understand what property belongs to the estate, whether a court grant is needed, what debts need to be paid off, whether all tax obligations have been addressed, and who is entitled to receive the property.
Giving away estate assets too soon can cause problems if the executor later discovers a substantial debt or tax obligation. This is because funds from the estate itself may need to be used to pay off liabilities.
In some circumstances, a partial or interim distribution may be considered while the executor keeps enough property in the estate to address unresolved matters. Whether that is appropriate depends on the specific estate.
What Happens If A Beneficiary Is Demanding Their Inheritance Right Away?
A beneficiary may believe the executor is taking too long to distribute the estate.
Sometimes that concern is reasonable. In other cases, the executor is waiting for a legitimate step to be completed.
For example, the estate may still be dealing with:
- probate;
- the sale of a home;
- income-tax matters;
- creditor claims;
- locating another beneficiary; or
- litigation.
An executor should not distribute property simply to relieve pressure if doing so could leave the estate unable to meet its obligations.
Where disagreements become serious, legal advice can help clarify what information should be provided and whether the executor’s timeline is reasonable.
What If The Estate Does Not Have Enough Money To Pay Every Debt?
An estate with more debts than available property needs to be handled carefully.
The executor should not simply pay whichever creditor contacts them first or distribute assets to beneficiaries before understanding the estate’s financial position.
Questions can arise about whether debts are valid, what taxes are owed, and the order in which obligations should be addressed. In some cases, after settling debts, there may no longer be funds available to distribute to beneficiaries.
An executor dealing with a potentially insolvent estate should speak with an Edmonton estate administration lawyer before making significant payments.
What If The Beneficiaries Or Family Members Start Disagreeing?
An executor should try to remain focused on the estate rather than becoming part of the family conflict. However, disputes often arise, and they might involve:
- whether the will is valid;
- who owns particular property;
- how a clause in the will should be interpreted;
- whether an executor is acting properly;
- whether someone has a claim against the estate; or
- how estate accounts should be handled.
Once there is a genuine legal dispute, ordinary estate administration may no longer be enough.
Our Edmonton estate litigation lawyers can assist executors and beneficiaries with contested estate matters.
How Our Edmonton Estate Administration Lawyers Can Help Executors
You do not need to know how to administer an estate before agreeing to speak with a lawyer.
Our estate administration lawyers can help at individual stages or throughout the administration.
Depending on the estate, we may assist with:
- reviewing the will and identifying the executor;
- explaining the executor’s legal responsibilities;
- identifying assets that may form part of the estate;
- determining whether probate or another court grant is required;
- preparing a grant application;
- communicating with beneficiaries;
- addressing estate debts and claims;
- coordinating estate-related real estate matters;
- helping organize distributions;
- reviewing executor compensation issues;
- preparing or reviewing estate accounting; and
- identifying when a matter has become contentious and requires litigation advice.
For example, if an estate includes a house, investment accounts, and several beneficiaries, we can help determine whether a grant is required, what steps should occur before the house is transferred or sold, and what should be completed before the beneficiaries receive their final distributions.
Our role is to help the personal representative move through the administration in an organized way while understanding the decisions they are being asked to make.
Frequently Asked Questions About Estate Administration In Alberta
What Is The Difference Between An Executor And An Administrator?
An executor is generally named in a will. An administrator is generally appointed through the court where there is no executor able to act, including many estates where there is no will.
Both can fall under the broader term personal representative.
Can I Refuse To Be An Executor?
A person named in a will does not necessarily have to take on the role.
However, it is wise to obtain legal advice before taking significant steps with estate property because what you have already done may affect your options.
Can Two People Be Executors Together?
Yes. A will can name more than one executor.
Co-executors should understand how they are expected to make decisions and what happens if one of them cannot or does not want to act.
Can An Executor Be Paid?
Personal representatives may be entitled to compensation in appropriate circumstances.
Compensation is not simply whatever amount the executor wishes to charge. The work completed, complexity of the estate, and applicable rules can matter.
How Long Does An Estate Take To Administer?
This depends heavily on the estate and the amount of assets and liabilities that exist.
Factors that can add time include:
- probate;
- selling real estate;
- business interests;
- complicated taxes;
- missing beneficiaries;
- creditor claims; and
- estate litigation.
What If I Make A Mistake As Executor?
Executors have responsibilities and can face consequences for improper administration.
That does not mean every honest administrative error automatically creates personal liability.
Obtaining advice from an estate administration lawyer before making a decision you are unsure about can help reduce avoidable problems.
Speak With Our Edmonton Estate Administration Lawyers For Legal Help
Administering an estate can feel overwhelming, particularly when you are doing it while grieving. You do not need to work out every step on your own.
Contact Verhaeghe Law Office online or call (587) 410-2500 to arrange a consultation with an Edmonton estate administration lawyer.
Please note, the information in this article does not constitute legal advice. It is intended as a general overview of an area of wills and estates law. For legal advice, please consult with a lawyer.