Whether you are planning your estate or have been appointed executor, you may wish to know the executor’s duties. Although these duties vary according to the circumstances of the deceased, this short article explains what the executor usually should do in Alberta. This article is not exhaustive and does not constitute legal advice, for which you should consult a lawyer.
Understand the duties of an executor
An executor, technically known in law as a personal representative, has a number of important duties, including the following:
- Making final arrangements, including any funeral or memorial service
- Preserving and managing the estate’s assets until they can be distributed
- Obtaining the final will
- Identifying the estate’s assets and liabilities
- Managing the estate in accordance with the will
- Notifying the beneficiaries of the death and of possible benefits from the estate
- Paying any debts of the estate
- Preparing and filing tax returns
- Distributing the estate’s assets
You become the executor by being designated as such in the deceased’s will and accepting the rôle. There will be no executor if the deceased died intestate (without a will), the will does not designate an executor, or no designated executor is able and willing to act. In that case, an administrator must be appointed instead. Typically a beneficiary applies for what is known as a grant of administration, which appoints that beneficiary as administrator, but the Public Trustee can be appointed if noöne else is available.
You do not have to accept an appointment as executor. Serving as executor is not an honour but a real burden, not only because it often requires a great deal of work but also because the executor can be held personally liable for mismanagement. If you do not wish to act as executor, make your wishes known before you involve yourself in the administration of the estate.
As executor, you are entitled to compensation from the estate. The will may state the amount of your compensation; if not, it can be set by agreement with the beneficiaries or else, upon your application, by the court. For most estates, a fair range of compensation is around 3% to 5% of the value net of liabilities. Keep track of the time that you spend on your work as executor, in case you need to justify your claim for compensation. Bear in mind that your compensation will generally be taxable.
In addition, you are entitled to reimbursement from the estate for all reasonable expenses that you incur as executor. These frequently include filing fees, postage, banking charges, costs for obtaining documents such as death certificates, professional fees, transportation, and the cost of final arrangements. Generally it is better to pay any such expenses directly from the estate’s funds; however, you may incur expenses out of pocket, especially before you are able to open an account for the estate. Keep receipts or other records and reimburse yourself from the estate’s funds as soon as possible.
You should keep careful records while acting as executor. The beneficiaries are entitled to demand an accounting for your administration of the estate. Your records will help to support the compensation and reimbursements that the estate owes to you and will also be useful in the event of litigation against the estate or against you as executor.
Make final arrangements
The deceased may have left instructions to donate organs, tissues, or even the entire body for use in transplants, scientific research, or medical education. Those instructions must be honoured.
Final arrangements include any funeral or memorial service, disposal of the body (such as through burial or cremation), and any marker such as a gravestone. In law, the executor alone decides on the type and style of final arrangements. The executor does not have to respect the wishes of relatives or even of the deceased. Of course, a reasonable executor will strive to respect any wishes that the deceased may have expressed concerning final arrangements and will consider advice from people who were close to the deceased.
The executor also sets the budget for final arrangements. The estate is responsible for the expenses. It is prudent to keep the budget reasonable in light of the size of the estate, unless the deceased asked for lavish arrangements (and preferably provided in the will for the executor to make lavish expenditures), because disgruntled beneficiaries might later accuse the executor of depleting the estate. Nonetheless, the executor need not make the arrangements as cheap as possible; indeed, they must be appropriate and dignified, to the extent that the resources of the estate allow.
Consider publishing an obituary in one or more newspapers. Again, the costs are chargeable to the estate. Also notify friends and relatives, the deceased’s employer, and schools, clubs, or other organisations with which the deceased was affiliated. You may ask others to assist with preparing an appropriate obituary and notifying people who would want to know about the death.
Take possession of assets
Since the executor may be held personally responsible for any losses or damages to the assets of the estate, the executor should immediately take possession of those assets. Unfortunately, even people close to the deceased may steal assets or otherwise interfere with property. I have seen this sort of shameful behaviour. People who are unscrupulous enough to steal from the deceased are likely to act opportunistically while others are busy with final arrangements or their own grief.
Therefore, immediately after the death, collect the deceased’s purse, wallet, keys, jewellery, and other items on the deceased’s person. Go promptly to the deceased’s home and take all valuable items that can easily be moved, such as cash, credit cards, cheques, important papers, and jewellery. Take any mail and arrange to have future mail forwarded to an address within your control.
Usually it is a good idea to have the locks changed, since other people may have keys. If the deceased was renting the residence, notify the landlord promptly.
Of course, you should arrange for the care of any pets or plants, dispose of perishable food, turn appliances off, adjust thermostats, and otherwise take reasonable immediate measures to preserve assets.
Consider opening an interest-bearing bank account in the name of the estate. Only you should have access to it. Since other people may have access to the deceased’s accounts, it is often wise to close those accounts promptly and put the money into an account for the estate. Do not commingle the deceased’s money with your own; use a separate account and keep good records.
Take assets that the deceased may have in a safe or a safe-deposit box. Make sure that the deceased’s assets are adequately insured. Bear in mind that regular insurance may not cover a dwelling left vacant; you may have to arrange regular inspections in order to preserve coverage.
Find and read the final will
Find the final will and any codicils to it or memoranda cited in it. It is important to search for the final will rather than accepting the first will that you find, which may have been revoked by a subsequent will. You may have to search the deceased’s papers in different locations (home, office, safe-deposit box) and also contact the deceased’s former lawyers, friends, and relatives. Lawyers sometimes advertise in professional periodicals in an attempt to find an old will.
Make copies. The court will want the original will; however, if there is a good reason (such as loss or accidental destruction) for which it cannot be produced, the court may ratify a copy.
Once you have found the will, read it. You must administer the estate in accordance with the testator’s directions, so understand what they are. The will may empower you to hire lawyers, accountants, or other specialists at the estate’s expense. If so, consider speaking with a lawyer before taking further steps. Often it is best to consult a lawyer on the validity and interpretation of the will, especially if these appear doubtful or likely to be contentious.
The deceased may have wills in jurisdictions outside Alberta, particularly if the deceased had assets in those jurisdictions. Find these wills as well. You may need legal advice, possibly from several jurisdictions, in this complex situation.
It is often necessary, and usually advisable, to apply to the court for a grant of probate. You may wish to seek a lawyer’s assistance. Alberta charges a filing fee that is quite low compared to those of many other jurisdictions, such as British Columbia.
Arrange care for dependants
The deceased may have designated people to act as guardians for minor children; however, the authority to appoint guardians rests with the court.
Dependants may have a right to financial support from the estate. The will may authorise you to make payments. A dependant may also apply to the court for support if the will makes inadequate provisions or none at all.
People who were living with the deceased may have a right to stay in the dwelling for a period of time after the death. You may wish to seek legal advice on this issue.
Obtain the death certificate
You will need several copies of the death certificate, possibly more than you expect. As usual, the estate is responsible for the costs. If the deceased died outside Alberta, special efforts may be needed to obtain adequate proof of death.
The funeral director typically provides several copies of a Statement of Death. Usually this document is adequate, but some financial institutions or other parties may want the official death certificate from the Government of Alberta.
Notify interested parties
The beneficiaries have a right to know of the death and of the possibility of receiving a benefit from the estate. You must notify every beneficiary named in the will. You may also have to give notice to family members of the deceased and sometimes other parties.
Also notify any creditors—people to whom the estate may owe money. Often it is necessary to publish an advertisement in one or more newspapers in an effort to find any creditors or others with claims on the estate.
If the deceased gave a guarantee for anyone else’s debt, give notice of the death and advise that the estate will not accept responsibility for any further advances made against the guarantee.
Keep copies of the notices and proof of service.
Identify assets and liabilities
Find and list all assets that belong to the estate. These include personal possessions, bank accounts, securities (stocks, bonds, and the like), benefits from pensions or insurance, houses and other land, automobiles, interests in companies, the contents of a safe-deposit box, and debts owed to the estate. You may need appraisals of valuable assets such as land, jewels, works of art, antiques, or interests in companies. You may also need financial advice.
Also determine any liabilities that the estate may have, such as mortgages, loans, and other debts. Since you must pay the liabilities before you distribute the assets to the beneficiaries, you should make serious efforts to determine what the estate owes to whom.
Administer the estate
You must preserve the estate’s property. Your specific duties will depend on the nature of the property and the circumstances of the estate. The situations described below commonly arise.
Apply for any death benefit from a pension, an insurance policy, and the government. Collect any final payment that may be due on a pension, including the Canada Pension Plan. Give notice of the death to the providers of any pensions.
Cancel credit cards, subscriptions, leases, memberships, and the like. Collect any refunds that may be available.
Preserve business assets, such as companies that the deceased owned. It is best to get advice on this delicate subject before taking action.
Ensure that the estate’s assets produce income to the extent that they can. For example, collect rent on any rental property. It may be appropriate to rent the deceased’s house out.
Take reasonable action on any financial assets that may need attention—particularly those that are time sensitive, such as derivatives and other assets that may mature or expire. Invest spare cash. You may need advice on the management of financial assets.
You may have to address outstanding lawsuits or even commence new ones. If so, most likely you will want legal advice.
You may also have to make provisions for temporary financial support of dependants or others from the estate’s assets.
Determine whether assets should be sold or kept as they are. Sometimes it may be appropriate to spend money to improve an asset: for example, you may need to have a house renovated in order to sell it at a better price. Typically you will do this on the advice of an appropriate professional.
Eventually you will have to pay any legitimate debts from the assets of the estate. Bear in mind that some debts, such as mortgages, may be covered by life insurance.
You must file any final tax returns that are required and pay any taxes due (or collect any refunds owing). Usually it is best to have an accountant prepare the tax returns.
Before distributing the estate’s assets, you must obtain tax-clearance certificates from the fiscal authorities. These prove that the estate does not owe taxes.
Distribute the estate’s assets
Once all taxes and other debts are satisfied, you may—and should—proceed to distribute the estate’s assets. You must prepare an accounting of the assets and a plan for their distribution, including a proposal for the compensation owed to you as executor. (It is well to include a sum estimated to cover any final reimbursable expenditures that you may have to make.) Show the accounting and the plan to the beneficiaries. Ideally you and the beneficiaries will agree on the distribution; if so, obtain signed releases from all beneficiaries. Otherwise you will have to apply to the court for directions on distribution.
As soon as you have obtained releases or a court order, distribute the assets. Probably you will distribute money by writing cheques. Assets such as real estate and cars can often be transferred into the name of a beneficiary. It is prudent to obtain receipts from the beneficiaries when distributing assets to them.
Some assets will have to go into trust, either because the will says so or because the law requires it (as in the case of money left to minor children). You yourself may be the trustee, in which case you must administer the assets in accordance with the conditions of the trust. If another trustee is appointed, you will transfer the assets to that trustee instead.