*This article is an opinion piece and not to be considered legal advice*
Tips for an Estate Trustee – Part One
What is an Estate Trustee?
(Executor, Estate Representative, Personal Representative, Estate Administrator, Will Administrator, Liquidator)
When a person makes their will, they usually name someone (or multiple people) to look after their affairs when they have passed away. It is this persons job to carry out the directions and wishes of the deceased. The Trustee(s) will have a lot of responsibilities. It is often a thankless job and taxing on your time and emotions. The tasks are typically:
- arranging a funeral (burial / cremation)
- managing finances and stopping payments
- cancelling SIN, drivers licenses, health coverage
- paying taxes and debts, filing returns
- distributing property to family or as will directs
- valuing all assets
- apply for probate if necessary
- overseeing the sale of property (including real estate)
- hiring people (Realtor, cleaner, auctioneer, appraiser, etc)
Step 1 – Locate the Will
Hopefully you were notified before the persons death that you were being named as a Trustee. And Hopefully you have a current copy of their Will. This must be located before you can take the necessary steps of dealing with their estate. If you don’t have their will – ask close family and friends, look for personal papers at home, a lockbox, or evidence of a safety deposit box. If there was a living Power of Attorney, ask them. Ask Professional Advisors they may have been in contact with such as Lawyers, Financial Planners, or Tax Accountants.
Step 2 – Decide if you can do the job
If you take on this responsibility, you will have a duty to respect the job and all its obligations. Often its easier in theory to accept these responsibilities than to execute the role at the time – especially if their passing is sudden and unexpected. Different stages in your own life could make taking on these responsibilities too burdensome, and it’s better to know in the beginning if you can’t make the necessary commitments. It takes one to two years to fully administer an estate, and complex wills with a large portfolio of assets or external circumstances out of your control can lengthen this process (think covid-19). Other factors that can make your job more difficult:
- living in a different city, province or country than the deceased
- they owned properties in more than one country
- family members are contesting the will
- there are claims by minors, step-children, married spouses, common-law partners
- outdated information in the will
- the estate has more debts than assets
- you aren’t knowledgeable enough to handle the complex issues at hand
- you aren’t financially literate or are in debt yourself
- complex, or hard to value assets such as original art, or farm properties
- you can not find a buyer for valuable assets
I don’t want to be an Estate Trustee
You can say no when someone asks you to be an Estate Trustee (and if you don’t want to be one, you absolutely should say no). You can also be named as an Estate Trustee in a will, and decline after their passing, even if you earlier agreed. You may be too overwhelmed to do the job upon learning that you have been named without your knowledge.
Perhaps you have been named alongside another family member who you’d rather not partner with in this role. Often existing family issues are intensified through administering a will. Feelings get hurt, and you may not want to put yourself in a position where family may question or criticize your actions. Speak to a legal professional regarding the duties and expected time frame in your case before you decide to proceed. Consider that quitting part way through may not be possible. Once you start steps as an Estate Trustee, you might not be allowed to quit unless you get permission from a judge. To quit you will be asked to ‘renounce’ or give up your rights on a legal form, thus allowing someone else to step in and apply to be the Trustee. Consider if you’re ok with stepping away and someone else at the helm of decision making.
Step 3 – Get Legal Help
Estate Lawyers can assist you by explaining your duties as an Estate Trustee and help you administer the estate. You’ll definitely want their help if family does not agree on some issues, or if the estate has more debt then assets. You’ll want the Lawyer to explain your personal liability and insurance. If you made a mistake in dealing with the estate, you could be on the hook for losses because of your actions. Your Lawyer can also explain Estate Trustee Insurance – an extra protection if you get sued from an honest mistake you have maid, although this comes with a cost to purchase.
The Parkhill Team of Realtors can recommend local, experienced Estate Lawyers to help you. Contact us at firstname.lastname@example.org for more information.
Step 4 – Make Arrangements
Some decisions must be made straight away upon a person’s death.
Funeral – arrange and pay for the funeral. You’ll have to make decisions according to the deceased’s wishes even if family members disagree. Decisions may be burial or cremation, donating their organs, a monument or headstone, a funeral service or memorial, who is going to speak, food and drinks and location, what charity you may wish to promote for gifts. These expenses are often paid from the estate.
Obtain a Death Certificate – this document will be necessary for closing their bank accounts, selling their house, etc. This document is also required for the Probate process. This can likely be issued by the Funeral Director or by Service Ontario. Not much headway can be made trying to call places on behalf of a deceased person if you don’t have their death certificate and the legal authority to act on their behalf.
Notify People of the death – Not just friends and family will want to know of the person’s passing. You’ll be obligated to notify:
- the Government for tax and insurance reasons and to stop payments
- insurers – registered investments, pensions, life insurance policies
- cancel driver license, OHIP, health insurance, social insurance, credit cards, bank accounts, and membership accounts
- landlord, condo board, employer, etc.
Step 5 – Probate the Will (Obtain a Certificate of Appointment as Estate Trustee)
This step can take some time and will likely hold up some of the processes you need to administer as it goes before the courts. You may be required to ‘probate’ the will, whereby you prove to the court (with the help of your lawyer) that the will is valid and you are the named Trustee and have the legal right to deal with the estate.
Not all wills get probated. If the estate is small and they don’t own real estate, the will itself may have legal standing as it is. Reasons you may have to probate:
- the bank requires probate to release the money from the deceased’s bank account
- the deceased was a sole-owner of real estate that needs to be sold
- family or friends disagree about weather the will is valid
Before you seek Probate, you’ll likely be asked to get a value for the estate’s assets. This is where the Real Estate Professionals come in. You will likely be asked by the Estate Lawyer to seek an Opinion of Value by one or more LOCAL Real Estate Professionals trained in valuations. Find a local Agent who has had specific, additional training on Property Valuations, and is experienced in working with Estate Sales. Clarify from your lawyer if you are seeing current market value, or the value at the time of death, as market conditions change. Your Lawyer may make referrals to Agents they know have the experience to do this quickly for you. Some Agents may charge you for their Opinion of Value, but most don’t, so don’t feel obligated to hire ones who charge. The Real Estate Agents will likely be hoping to get hired to sell the property later, so often they’ll do it for free. Ask to see the comparable sales they used to come to the valuation, and get their valuation in writing, signed and dated. Expect that the market value may change if the time to complete probate is longer than 30 days, which it often is. They may suggest an alternative asking price to the valuation figure. See a professional Realtor for more information.
|For a Free, no-obligation Opinion of Value from the Parkhill Team of Realtors, email us at email@example.com Our Team of Real Estate Agents can provide you with a valuation for Vacant Land, Residential Properties or Cottages in as little as 48 hours. Call 705-741-9193 for questions regarding selling an Estate property in Peterborough County or Cottage the Kawartha Lakes Region. We’re experienced in Estate Sales and are here to assist you.|
Tip – Often a Property will be listed for sale even before a Certificate of Appointment for Estate Trustee has been received. In many cases, a firm sale on a property can “put a rush on” the Probate process. It is important to work with a Realtor who is familiar with Probate Estate Sales as clauses will have to be added to an Agreement of Purchase and Sale saying the closing date is pending Probate proceedings, and the Seller only can extend closing until they’ve officially been appointed the Trustee. Often this is done to get a home on the market during the spring or summer months when sales are higher and the property is easier to show.
Will I get paid for my time?
Usually you are paid for accepting this role and responsibilities, but you must take the responsibilities seriously. The burden often outweighs the pay. The pay will come out of the estate, and the law says this amount will be “fair and reasonable”.
The amount will depend upon:
- what the estate is worth
- how much work you have to do
- a rough idea is approximately 5% of the estate’s value
- and sometimes includes additional management fees of 2/5 of 1% of the average annual value of the assets administered (source: stepstojustice.ca)
CONTINUED… See next article for more –>