Being named an estate trustee (commonly referred to as an executor) is often considered an honour; it reflects a high level of trust and confidence. However, many people are surprised to learn just how significant, risky and time-consuming the role can be. Acting as an estate trustee in Ontario involves legal, financial, and administrative responsibilities that can span years.
What Does an Estate Trustee Do?
At its core, the role of an estate trustee is to administer the estate of a deceased person in accordance with their will (or, if there is no will, in accordance with Ontario’s succession laws). This typically begins with arranging the funeral and securing the deceased’s assets, such as real estate, bank accounts, investments, and personal belongings.
From there, the estate trustee must determine whether probate, formally known as a Certificate of Appointment of Estate Trustee, is required. If so, they are responsible for preparing and submitting the necessary court application. The probate application is a formal application that is made to the Ontario Superior Court of Justice and requires an inventory of assets and affidavit evidence.
Once authorized, the estate trustee gathers and obtains appraisals of all estate assets, notifies beneficiaries, closes out government licenses, such as driver’s, boating, hunting, fishing, and firearms licenses, government-issued IDs such passports, as well as social benefits such as CPP and OAS. The estate trustee is also responsible for settling any outstanding debts and taxes. This normally includes filing final income tax returns and obtaining a clearance certificate from the Canada Revenue Agency. Only after these steps are complete can the remaining assets be distributed to beneficiaries.
How Much Time Does It Take?
The time commitment varies widely depending on the complexity of the estate. A straightforward estate with minimal assets and no disputes may take 12 to 18 months to administer. However, more complex estates, such as those involving multiple properties, business interests, or contentious beneficiaries, can take several years.
Estate administration is not simply a matter of paperwork. Estate trustees often need to coordinate with financial institutions, government agencies, real estate professionals, and beneficiaries.
Delays are common, particularly when waiting for tax clearances or court approvals.
Being executor is a job of a thousand discretionary decisions. Should a GIC be renewed? When should the real estate be sold? If the insurance company refuses to renew the home insurance on the deceased’s property, what insurance company should be used instead, and on what terms? If the mortgage is up for renewal, and the home cannot be sold immediately at the best possible price, what terms are best? Should the car be auctioned or sold back to the dealer? For how much? What is a fair and reasonable commission? Should an interim distribution be made to beneficiaries now? How much should be held back for unforeseen taxes and expenses? Every decision entails liability for the executor, and consequences for beneficiaries. And all decisions need to be made while doing the work of diplomacy with beneficiaries and other stakeholders. Importantly, estate trustees are expected to act diligently and in a timely manner. While they are not necessarily required to work full-time on the estate, they must ensure that the administration progresses appropriately and that beneficiaries are kept reasonably informed.
What Help Might Be Needed?
Many estate trustees rely on professional assistance to carry out their duties effectively. Retaining a lawyer is often essential, particularly for probate applications, legal advice, and ensuring compliance with Ontario laws. Accountants can assist with tax filings and financial reporting, while financial advisors or appraisers may be needed to value or manage certain assets.
In some cases, estate trustees may also hire real estate agents, auctioneers, or estate clean-out services. The costs of some professionals for certain types of work can be paid out of the estate, not personally by the trustee.
It is also worth noting that estate trustees are generally entitled to compensation for their work, though the amount must be reasonable and may be subject to approval by beneficiaries or the court.
A Role Not to Be Taken Lightly
While being an estate trustee can be a meaningful way to honour someone’s wishes, it is not without its challenges. The role carries legal obligations, potential liability, and a significant time commitment. For example, distributing the estate without paying a creditor, or an estranged child, who was unknown to the estate trustee, can result in extensive personal liability. Further, the question of whether an estate trustee made sufficient efforts to identify creditors, or put them on notice, or to search for estranged beneficiaries, is a question of law and fact for the courts to resolve. Anyone asked to act should carefully consider whether they are willing and able to take on these responsibilities.
Assistance for Estate Trustees/Executors in Ontario
Seeking guidance early can make the process more manageable and can help ensure that the estate is administered properly, efficiently, and in accordance with the law. Our lawyers in Ottawa and Perth are available to assist with any estate planning issues.
This blog post was written by Dylan McGuinty, Jr., a member of the Estate Administration and Wills and Estates teams. He can be reached at 613-369-0379 or at [email protected].
