ESTATE ADMINISTRATION AND PROBATE
An executor or administrator of an estate is responsible for all the assets of the deceased. An executor follows instructions in the Will and the Wills, Estates and Succession Act, whereas an administrator, because there is no Will, follows the guidelines of the Wills, Estates and Succession Act. The process is similar, however, and either can involve a great deal of your time and energy. If you agree to be an executor or apply to administer an estate, your tasks will include funeral arrangements; housekeeping matters such as securing the property and having mail redirected; taking care of financial matters such as cancelling credit and bank cards and dealing with a mortgage, if one exists; searching for the safety deposit box; creating an inventory of assets and liabilities; notifying government departments; and applying for death benefits, just to name a few. In addition, you must keep track of all reasonable and proper expenses incurred in dealing with the estate, and save copies of receipts, so that you can be reimbursed later and account to the beneficiaries. You may be entitled to a fee for your efforts.
Why You Need a Lawyer
Although inexpensive "Probate and Administration" kits exist, they are meant for small and very straightforward estates. Many times potential executors are not aware of hazards in apparently "simple" estates. Whether or not you believe the estate in question is small and straightforward, the most valuable thing a wills and estates lawyer provides you, and the kit does not, is understanding of the law and experience with what can go wrong.
You do not have to accept the job of executor unless you have undertaken the duties of the executor. Accepting the position means you have taken on potentially large liabilities. If you do undertake the job and do not follow the correct procedures, you may be liable for
- wasted estate assets,
- improperly insured assets,
- claims by creditors,
- claims and penalties by Canada Revenue Agency,
- improperly investing assets,
- claims by disgruntled beneficiaries who claim you have not acted fairly or according to the law.
At the very least, you should set up a consultation with a lawyer, who can review the Will (if there is one) and/or the estate and discuss with you any problems that could arise, explain your responsibilities to you, and advise you as to how to proceed with your tasks. You can then decide whether or not you will accept the job of executor or apply for the job of administrator and whether or not you need the assistance of the lawyer with some or all of the work involved. If you decide to hire a lawyer to help you, you will still have responsibility for the estate and some tasks to perform, and will, of course, be signing a number of documents throughout the process, but a lawyer can take on much of the burden for you. Lawyers' fees are generally a legitimate estate expense.
Petley-Jones & Co. has extensive experience helping executors and administrators. An executor usually must apply for a court order called "a grant of probate," and an administrator must apply for "a grant of administration," and at a minimum we can prepare everything required by the application. If you choose to do everything else yourself, we can also be available to answer any questions you may have during the process or provide help if you run into difficulty. Alternatively, we can take on the majority of the work and, for the most part, call upon you only to sign documents.
What to Bring to the Lawyer’s Office
Having the following documents with you at the time of your first appointment with the lawyer will expedite the process greatly:
- the original Will, any codicils (amendments), other testamentary documents (possibly computer records) if you have located them;
- any notes or memoranda regarding funeral arrangements or dealings with assets;
- the deceased's birth, marriage, and death certificates, and social insurance number;
- bank books or statements up to the time of death;
- a list of properties owned by the deceased, with the addresses and copies of the titles, if available, together with approximate values;
- details of any motor vehicles or boats, including model, year, and registration numbers;
- list of contents of the safety deposit box;
- details of any other assets not listed above;
- a list of liabilities of the deceased, including funeral expenses, as complete as you can determine, together with approximate amounts;
- an outline of the deceased's family tree, and relatives' names, ages, occupations, current addresses, telephone numbers, e-mail accounts, and any other significant relationships with people who may be listed in the Will; include husbands, wives, and common-law spouses, whether opposite or same sex
- a list of banks where the deceased may have had accounts, RRSPs, or other investments.
What is Probate?
Put simply, Probate is the process of "verifying" the Will, that is, getting the Court to rule that the Will is legally valid. A Grant of Probate or Grant of Administration by the Court allows you access to the deceased's assets. Various institutions, such as banks, that have control of the deceased's assets will not allow you access without it.
An application for Probate comprises a number of documents, including the results of a Wills Notice search (which confirms that a Will more current than the one you may have has not been registered), affidavits signed by the executor confirming his or her appointment and that all beneficiaries and other "interested" parties have been informed of the death, the original Will, a document disclosing the value of all assets, and a cheque to pay for the fee for processing the application (currently $200.00 in British Columbia). An application for Administration includes many of the same items, but also consents for the administrator to act from other people who might have a right to apply. An estate bond, other security, or restrictions on the power of the administrator might also be necessary. A lawyer can prepare all of these documents for you.
Once the Letters of Probate or Administration is granted, and applicable fees (about 1.4% of the asset value of the estate based on the value of the assets named in the Statement of Assets and Liabilities) are paid to the court, the executor or administrator is then free to deal with the estate according to the instructions in the Wills, Estates and Succession Act, respectively. This generally involves selling assets if appropriate, paying all creditors, filing income tax returns and obtaining tax clearance certification, and then distributing the remainder to the beneficiaries after they or the court has approved your accounts.
Must All Wills Be Probated?
A Will may not need to be probated under the following conditions:
- If all the assets of the deceased are jointly held with the beneficiary and the conditions on the assets are such that the beneficiary can access them alone, then you will not need to probate the Will. This often is the case for married couples. Issues arise when surviving joint tenants hold property on an implied trust for the deceased's estate (see Joint Tenancy).
- If the estate is small—the deceased did not own real property and had only a small amount of money in his or her bank account, the Will may not have to be probated. This depends however, on the willingness of the bank to release the funds to you, the executor. They may do a credit check on you or make you sign an indemnity agreement to protect themselves if others make a claim to the funds.
- Vehicles or other assets may likewise be transferred if transfer agents like ICBC agree and their procedures are followed.
- There are named beneficiaries (other than "the estate") to Life Insurance, Annuities, Pensions, RRSPs and RRIFs.
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