Companion Advisor: Taxes
Estate Planning: Being an Executor
What are your responsibilities and obligations?
Being named as an executor of an estate is a big undertaking requiring a considerable amount of time and knowledge. You have been entrusted to handle the financial affairs of the deceased in their absence and owe it to them to make sure you know what is required of you.
Ascertain immediate cash requirements of beneficiaries.
Acquire funeral director's statement of death or apply for provincial death certificate.
Terminate lease or arrange for a sublet if deceased lived in a rental property.
Cancel driver's license, magazine and newspaper subscriptions, cable television, club memberships and telephone, and request refunds if applicable.
If applicable, ask Health and Welfare to cancel old age security cheques and Canadian Pension Plan.
Cancel health insurance coverage.
Obtain information on outstanding credit card balances and cancel cards.
Contact Canada Post to reroute deceased's mail, if necessary.
Complete or cancel outstanding broker's orders.
Gain access to and list contents of safety deposit box.
Arrange for safe storage of valuable items.
Determine assets and liabilities of deceased by writing to financial institutions, insurance companies, brokers, employer, and RRSP/RRIF trustees for information.
Organize a review of all investments in portfolio.
Inquire to determine entitlement to and apply for Canada Pension Plan Death Benefits, Survivor's Benefits and Orphan's Benefits.
Review tax returns from past years and complete and file any previous outstanding T1 returns
Acquire all title documents for property, mortgages, share certificates, bonds, debentures, and guaranteed investment certificates.
Obtain evaluations of all real estate, securities, automobiles, and any personal property.
Review insurance to determine adequacy of coverage and make changes if deemed necessary.
Ensure that each beneficiary receives a copy of the Will.
Compile a complete list of assets and liabilities, listing them by their class and value. Ensure that you include certificate numbers, registration particulars, maturity dates, interest rates, and payment frequency.
With assistance of a solicitor or estate professional, apply for grant of probate or administration.
After probate has been granted, acquire notarized copies in order to transfer assets.
Keep in contact with the beneficiaries, reporting on the progress of the estate administration and provide each with a copy of the complete inventory of assets and liabilities.
Organize to have Advertisement to Creditors published before distributing estate assets.
Settle all debt and outstanding claims.
Arrange to have safety deposit box closed and obtain contents.
Complete the closure of all bank accounts, transferring balance to estate account. If joint bank accounts exist with right of survivorship, supply financial institution with death certificate and request that they transfer to surviving joint tenant.
Invest cash surplus according to terms of the Will.
Organize sale of securities if converting to cash. Otherwise arrange for the re-registration and transfer of securities.
Examine Will for details regarding the distribution scheme of assets. If necessary, discuss distribution of assets in kind with beneficiaries.
With solicitor or estate professional, review any restrictions or time periods imposed on the distribution of estate assets.
Prepare cheques for debt payments, legacies and interim distributions.
If distribution in kind is required, provide beneficiaries with securities and obtain receipts for them.
Provide beneficiaries with personal effects and obtain receipts for them.
Provide beneficiaries with legacies and obtain receipts for them.
If the deceased held foreign assets, complete and file the necessary tax returns.
Complete and file a Terminal T1 Tax Return and any other required returns with Revenue Canada and request a Clearance Certificate. Note that Terminal period returns have to be filed by April 30th of the year following the year of death, or by six months from the date of death, whichever is later.
Determine if the Will provides for outright distribution. If so, acquire a release for distribution and transfer assets or funds to beneficiaries. Be sure to keep enough funds in a reserve for any outstanding accounts and debts as well as income taxes.
the Will provides for trusts. If so, arrange for testamentary trusts
and organize an ongoing review of investments. Also arrange a review
to ensure an ongoing compliance with the rest of the terms of the
Ready accounts for approval or passing by beneficiaries and prepare releases.
When accounting has been completed, write to beneficiaries to request their approval.
Calculate executor's compensation.
Confirm that all releases have been received once account approval has been given by beneficiaries.
beneficiary or court approval, take executor's compensation, maintain
holdback/reserve pending the receipt of clearance certificates,
and distribute and deliver any remaining funds or assets.
If accounts need to be audited by the Court, request that the solicitor or estate professional prepare an application and all necessary notices and make an appointment.
Apply for a
tax clearance certificate.
that all written cheques have cleared, organize the closure of the
Estate bank account.
Write a detailed report regarding all aspects of the estate administration and send it to beneficiaries.
- GETTING ADVICE A will requires
careful planning to ensure all essential matters are covered. It
should also be reviewed periodically and discussed with a qualified
adviser or team of advisers to incorporate any changes in your personal
Agents Financial Services Group are not engaged in rendering tax, accounting
or legal professional services or advice. The comments in this article are not
intended, nor should they be relied upon, to replace specific professional advice.
Before acting on material contained herein. Readers should seek advice that
is appropriate to their personal circumstances from a professional advisor.
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