Get advice and help with respect to the administration of the deceased's estate.
The executor of an estate has a number of responsibilities. These responsibilities vary depending on the circumstances, but typically including making funeral arrangements (practically, this is often done by the family), locating and reading the will, locating and preserving the deceased's assets, notifying beneficiaries, preparing a list of assets and liabilities, applying for a certificate of appointment, preparing and filing income tax returns, notifying creditors and paying debts and distributing the estate.
Certificate of Appointment
One of the first steps of an executor is to determine whether a certificate of appointment of estate trustee is required. Under the Rules of Civil Procedure, the definition of "estate trustee" includes an executor. This certificate is issued by the Superior Court of Justice and evidences the validity of a will and the executor's authority to administer the estate or, where there is no will, the validity of the executor's appointment.
If there is a will, a certificate of appointment of estate trustee with a will may need to be obtained. The certificate may be required where title to real property must be transferred, as well as where other persons or financial institutions require the certificate. If possible to do legally, the certificate of appointment (formerly probate) should be avoided as an estate administration tax is levied on the value of the assets governed by the will. The estate administration tax is currently payable at the rate of .5% on the first $50,000 of assets governed by the will and 1.5% on the value of the assets over $50,000. The use of multiple wills is a tax minimization strategy which can be used to reduce the amount of estate administration tax which is payable. In simple terms, two wills are made. The first will deals with assets that require a certificate of appointment. The second will deals with assets that do not require a certificate of appointment, such as shares of a private corporation. Estate administration tax is only payable on the value of assets under the first will.
If the deceased died without a will, a certificate of appointment of estate trustee without a will must be obtained to appoint an estate trustee for the deceased's estate.
Payment of Debts
The executor is responsible for the payment of the estate's debts. The executor should publish a public notice for creditor claims. The protects the executor against personal liability from the claims creditors of the estate.
Filing of Taxes
The executor is responsible for the filing of any unfiled income tax returns within six months from the date of death, as well as the final income tax return for the deceased's final year. The final return is due on the later of April 30th following the date of death; and six months from after the date of death. If the estate earned income, a T3 return will also have to be filed.
As of January 1, 2015, an Estate Information Return must also be filed with the Ontario Ministry of Finance by anyone who receives a certificate of appointment of estate trustee. The return must be filed within 90 days from the date the certificate of appointment is issued.
Passing of Accounts
Unless provided otherwise in a will, an executor is generally entitled to be compensated for the services which they perform. In determining an executor's compensation, the following tariff is used as the guideline:
- 2.5% of capital receipts
- 2.5% of capital disbursements
- 2.5% of revenue receipts
- 2.5% of revenue disbursements
- 0.4% of the average value of the capital of the estate
These amounts may be increased or decreased as appropriate.