“I’ve been asked to be an executor. What does it mean to be someone’s executor?”
What is an Executor?
An executor is a person who is responsible for managing the estate and carrying out the wishes of the deceased.
What If There is No Executor?
When someone dies without leaving a will, certain individuals can apply to become an administrator of the estate. If approved, the court will issue a grant of administration without will annexed. The person who is issued a grant of administrator will have a legal authority to settle the estate according to the rules of the Wills, Estates and Succession Act, the Trustee Act, and the Supreme Court Civil Rules.
When there is a will that doesn’t appoint an executor or the person appointed as an executor is unable to act, someone must apply to become an administrator of the estate as well. Whoever is applying to the court will be applying for a grant of administration with will annexed. The person applying to be the administrator must give notice to the beneficiaries in the will, spouse, and children of the will-maker.
What Should the Executor Do When Someone Dies?
Acting as an executor may involve taking many steps.
♦Locate the will
If you were appointed as the executor, one of the first things you should do is locate the will. Locating the will gives you a chance to review the will to ensure that the will is valid and to confirm you are the executor. Many people will keep their wills in their homes, safety deposit boxes, or their lawyer’s offices. If you have trouble locating the will, try searching for a wills notice. Once you have successfully located the will, confirm that it is the most recent will of the will-maker.
♦Secure the Assets
As the executor, you must go through the will carefully to ensure the assets listed in the will actually exist and safeguard them. This step may involve taking a visit to the deceased’s home, which may be vacant, to make sure everything is okay for the time being. Is the deceased’s house vacant? If so, you may need to notify the insurer and update the insurance (Many house insurance policies are void if the property is left vacant for more than 30 days.) The executor may also need to gather up the credit cards and cancel them (to make sure no additional fees get charged to the credit cards), locate any items that belong to the deceased, make arrangements for the pets, and keep any valuable items in a safe place.
♦Make Funeral Arrangements
The executor is responsible for arranging a funeral for the will-maker. Most people will either have a prearranged funeral agreement or mention their funeral wishes in their wills. You should review the terms in the will and set up a funeral accordingly. If the will doesn’t mention funeral wishes, you can always discuss it with the family members. The executor is also responsible for paying for the funeral costs from the deceased’s estate. If you had to pay for the funeral expenses out of your pocket, keep a record of the payment so you can be reimbursed for the payment.
♦Locate the Beneficiaries
Go through the terms of the will carefully and find out who the beneficiaries are. This step is essential because you must notify all the beneficiaries when you apply for probate.
♦Talk to the Beneficiaries
Although not required, getting together with the beneficiaries to review the terms of the will may be a good idea. If you are applying for probate or grant of administrator, the beneficiaries will be provided with a copy of the will anyway. Having a meeting with the beneficiaries to speak to them about the expected process and what will happen to the estate will help to prevent anyone from feeling anxious about the whole event. It is common for beneficiaries to wonder about the status of an estate and what is happening. Having open communication with beneficiaries from the start may make it easier to deal with them over the course of administering the estate.
♦List the Assets and Liabilities
The executor should make an inventory of the deceased’s assets and debts. Not everything a person owns at the time of death becomes part of their estate. For example, benefit plans with designated beneficiaries or RRSPs will not form a part of the deceased’s estate. If you are unsure about what can be listed as an asset and what cannot, it is always a good idea to talk to a lawyer.
If you are going to apply for probate, then you will need to know the value of all of the assets in the estate as of the date of the deceased’s death. You will also need to know the amount of any debts that are attached to those assets, such as a mortgage that is on the house owned by the deceased.
♦Apply for Probate
Probate is a legal process to verify that a will is real under B.C laws. Applying for probate is not always required, but the executor may be required to probate the will in many cases. The application is made to the Supreme Court of British Columbia. The probate process includes giving notice to the beneficiaries in the will as well as notifying the Public Guardian and Trustee (“the PGT”) for minors. If successful, the Court will issue a grant of probate. The grant of probate is a legal document that proves the executor is entitled to handle the estate. You may not be able to transfer certain kinds of assets, such as real estate, without a grant of probate.
♦Deal with Creditors and Taxes
The executor must notify the creditors of the deceased’s death. This step includes notifying credit card companies and cancelling credit cards. If the deceased or the estate owes money, you must pay out the debts. The assets of the estate must be used to pay for the debts first before they get distributed to the beneficiaries. It is also your responsibility as the executor to file taxes for the deceased and, if applicable, for the estate. After you pay for the taxes of the deceased and the estate, you must obtain a clearance certificate from the CRA.
♦Liquidate the Assets If Necessary
Some assets such as real estate or vehicles may need to be sold and turned into cash so that the cash may be divided among the beneficiaries.
♦Keep Records of the Estate Administration
Keep records of any payments made or income received during the administration of the estate. As the executor, you must provide accounts of the estate to the beneficiaries. Once you have provided the beneficiaries with the accounts, they have the opportunity to review and agree with them. If you are claiming any executor’s fee or reimbursements for the out-of-pocket expenses, those amounts must be included in the accounts. If any of the beneficiaries refuse to agree with the accounts, the court has to be involved to review the estate accounts.
♦Distribute the Estate
Once you have obtained the clearance certificate from the CRA, you can make a final distribution to the beneficiaries. When you distribute the estate, it is never a bad idea to get a receipt from each of the beneficiaries.
Can I Get Paid for Being an Executor?
Yes. Unless the will provides a gift to the executor, which will then presumed to be the payment to the executor, you can claim a fee. Under the Trustee Act, an executor can claim up to 5% of the estate’s gross value plus 0.4% of the average market value of the estate for the care and management of the assets on a yearly basis. However, the fee should be reasonable based on the amount of work done by the executor himself or herself. For example, if the executor hires someone to carry out the work of an executor, then they should not also claim a fee on top of paying that person for the work. If there is a dispute about the amount you claim as a fee, there can be a court hearing, and the court will decide the fee.
Dealing with one’s estate is not easy, especially when you are still grieving from the death of the loved one. Settling an estate requires several steps, and the executor can be personally liable for mistakes he or she makes. An experienced estate lawyer can guide you through the probate process.
Brennan J. Clarkson has helped clients with family law and estate law cases since 2008. He practices in Port Moody, British Columbia at Clarkson Law Corporation.
Contact Clarkson Law Corporation today for a free 30 minute consultation.