If you have been named as the executor of an estate, here are 4 things to keep in mind.
You Can Pay for Funeral and Other Expenses Even if Accounts Are Frozen
The death of a person is like the death of a star; in both cases, the light continues to travel for generations. While this is true from the point of view of the impact and memories a person leaves behind, practically speaking a person’s estates – including their expenses – continue and need to be paid by the executor until the estate is administered.
But when executors learn that the deceased’s bank accounts are frozen until probate is granted, they often worry about being unable to pay the bills. While some services such as cable and internet can be cancelled immediately, others, such as hydro, home insurance and gas, need to remain in place until the home is sold. Another expense that needs to be paid is the funeral.
Generally speaking, Canadian banks allow executors to pay a deceased’s persons bills if the executor presents him or herself at the bank in person with a) an invoice for the services to be paid and b) the deceased person’s original Will, or a notarial copy of the deceased person’s Will. A notarial copy of the Will is a copy that is certified by a Notary Public to be a true copy of the original. It is not recommended that executors travel with the original Will, in case it gets lost, damaged or destroyed, so having a Notary Public prepare a notarial copy is recommended as a first order of business.
Apply for Probate
Applying for Probate is not just good administrative practice, allowing executors to unfreeze bank accounts and carry out their responsibilities; it is also good legal practice. When a probate certificate is granted by the court, the date on the certificate provides clarity about the beginning of the limitations period. For executors, who can be held liable for a number of actions or inactions, the limitations period provides a level of certainty and predictability about how far into the future their potential liability extends. Therefore, probate can provide peace of mind to executors.
Get Tax Documents in Order
One of the most important responsibilities of executors is to file for taxes for the deceased person and his or her estate. Mishandling an estate can result in the executor being held personally liable to pay for the taxes of the deceased person and his or her estate. Another of the first orders of business for executors is to retain a tax accountant and file for taxes.
Invest Prudently
Another important responsibility of executors is to invest the deceased’s assets prudently. While putting the deceased person’s investments in a non-interest bearing account is necessary for a temporary period of time to end tax liability and wind up the estate, the executor has a duty to invest the estate prudently and safeguard against the argument that he or she oversaw the devaluation of beneficiaries’ inheritances due to inflation. Retaining investment counsel is another important first step in estate administration.
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If you have questions about estate planning or need assistance with an estate administration matter, please reach out to a member of our team.
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].
