Life Stages: Retirement

When someone dies, all of their worldly possessions and all of the debts in their name go into a separate legal entity called an estate. If they die with a will, it will name one or more executors. An executor can be a trusted friend or family member who's willing and able to do the job, or a professional trustee.

Executor responsibilities

If you’re an executor, you are responsible for managing the assets and liabilities of the estate and making distributions to the beneficiaries, the people named in the will to receive an inheritance.

Your responsibilities include the following, which can be used as a checklist.

• Locating the will and notifying beneficiaries of their interest in the estate.
• Working with the deceased’s estate lawyer if they had one, or retaining a new lawyer if they didn’t.
• Securing and valuing the assets of the deceased.
• Arranging for management and/or wind up of the deceased’s business.
• Closing personal accounts of the deceased and opening estate accounts. You may need a notarized copy of the will and the death certificate as proof.
• Applying for probate, if necessary. Probate (also called estate administration tax) is the legal process that provides proof, as requested by financial institutions and government agencies, that you as an executor are authorized to represent the estate. Probate fees vary by province.
• Paying the debts of the deceased. Debts may include outstanding credit card balances, car loans, mortgages, unsecured and secured loans.
• Paying the taxes of the deceased and the estate. You will have to file a terminal tax return for the period from January 1 up to and including the date of death. Thereafter, you will be responsible for filing the estate’s trust return (T3) until the estate is wound up.
• Accounting to the beneficiaries by keeping accurate financial records.
• Obtaining a clearance certificate from the Canada Revenue Agency indicating that all taxes have been paid before distributing the assets of the estate to the beneficiaries according to the will.

Additional duties

You will also have additional duties and tasks as an executor, such as:

• Helping to arrange the funeral.
• Cancelling the deceased’s Social Insurance Number, passport, health card, and driver’s licence. Failure to do so can lead to identity theft and fraud.
• Cleaning out the fridge and arranging for care of pets.
• Paying any outstanding bills, property taxes and credit card balances and making rent or mortgage payments.
• Cancelling services like phone, internet, cable, alarm.
• Redirecting mail and cancelling unsolicited mail, magazine subscriptions, newspapers and any memberships, such as clubs or professional associations.
• Disposing of personal effects and distributing them according to the will. If unspecified in the will, after checking with family members, consider selling anything of value or donating items to charity.
• Giving the deceased’s landlord notice that the premises will be vacated or if they owned their home, preparing it for sale.
• Applying for any benefits payable on death like the CPP death benefit, life insurance proceeds and death benefits from pension plans or annuities.

Being an executor is not a job to be taken lightly as it involves a lot of work and responsibility. You will be entitled to compensation as an executor, so keep track of the amount of work done and the time spent administering the estate.