Estate Trustees: Role and Responsibilities

An Estate Trustee or Executor is responsible for handing the property and financial affairs of a person after his or her death.  This involves a number of steps, including:

  • Reading the Will – direction as to what will happen to all property must be taken from the Will.
  • Determining that the Will is the last Will of the deceased.
  • Preparing documents necessary to apply for a Certificate of Appointment of Estate Trustee with a Will or Letters Probate.
  • Locating the beneficiaries – determining names, addresses and ages of the beneficiaries and give notice to beneficiaries. Sending a Notice of Application to all beneficiaries.
  • Determining the nature and value of the assets and debts of the deceased and compiling a detailed inventory.
  • Setting up and administering any trusts established by the Will.
  • Managing and, where appropriate, investing the funds in the estate prudently.
  • Opening an estate bank account (where necessary). Estate money should not be mixed with any other money. A separate account should be maintained for all estate funds.
  • Advertising for creditors.
  • Dealing with liabilities and arrange for the payment of debts.
  • Preparing and filing the necessary tax returns on time and paying any tax owing.
  • Dealing with claims against the estate.
  • Distributing specific bequests.
  • Issuing interim distributions to residual beneficiaries according to the terms of the Will and obtain releases from all residual beneficiaries. When an interim distribution is made to a registered charity, a receipt for income tax purposes will be issued and this can be used when submitting the final income tax return. A sufficient amount of a holdback should be set aside to ensure funds are available for final taxes.
  • Issuing final distributions to the beneficiaries along with final accounting once the Clearance Certificate is received from Revenue Canada.
  • Maintaining accurate accounting records in relation to all estate assets. The estate trustee will need to have these accounts approved by the beneficiaries periodically and at the conclusion of the administration of the estate. The accounting must include a full report and disclosure of capital and revenue receipts received, disbursements made, and investments made.
  • Ensuring receipts, cancelled cheques, bills, etc. are maintained in order to prove the accounts, if that should be necessary.
  • Submitting the amount of executor’s compensation being requested for work done in the administration of an estate to the beneficiaries for their approval during the final states of the administration of an estate. If the amount of compensation is pre-determined by a compensation agreement, send a copy of the agreement to each beneficiary. If the amount of compensation is outlined in the Will, then there is no requirement to have the compensation amount approved by all the beneficiaries.