Being an executor isn’t an easy job. Firstly, it’s a title only given in the event of a death. The death of someone who trusted you to handle their affairs when they can’t. Second, you must deal with various professionals - funeral directors, lawyers, accountants, banks, insurance companies, wealth advisors, etc. Third, you must juggle the needs and wants of family and friends. And lastly, you may not get a thank you for your efforts. That said, if you are an executor, here is a step-by-step list of the items to complete:
1. Plan the Funeral - The first point of contact for most executors is the funeral home and they are a great resource. After the funeral, the funeral home often gives you a list of tasks to close the estate and copies of the death certificate - You will need several copies. Many even get the ball rolling by notifying Service Canada of the death for you.
2. Inventory Everything – Next, inventory the estate. List all the assets including accounts, bills, insurance policies, physical assets, and online accounts. Include contact information for businesses and/or professionals you will need to contact.
IMPORTANT: Get a logbook to track all your appointments and actions in case you're ever questioned.
3. Probate … or Not – Once you have a list of assets, it’s time to determine if probate is necessary. Probate is the last 'kick at the can’ for the government to collect taxes. Get a hold of the will and work with a lawyer and the deceased’s wealth advisor – they will help determine if you need to file for probate.
PROBATE GUIDELINE: Accounts or policies with a named beneficiary aren’t subject to probate. This includes TFSAs, RRSPs and insurance policies. Joint accounts/assets also generally bypass probate. Everything else may be subject to probate.
4. Notify & Plan – Give notice of the death to banks, investment companies, credit cards, insurance, etc. Ask for a written list of requirements to settle the accounts. Then start collecting these items and settling accounts as you obtain what you need. Please note that some accounts can only be settled once probate is complete.
5. File Taxes - The executor must file an income tax and benefit return and pay any owing taxes by April 30 of the year after the date of death. If the death was in November or December, the deadline is six months after the date of death.
6. Distribute Assets – Once probate is completed, income taxes filed, and bills paid, you can start distributing the assets. You want to ensure all expenses are paid first or you, the executor, will be responsible for any owing amounts.
7. Pay Yourself - Executors can take a fee from the estate. I recommend taking an amount to compensate for all your time and effort.
For more tips and assistance on handling estates contact KLT Wealth Management.
- Courtney Beach, QAFP
