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Alona    An executor's duty: The legal vs. the personal

 

When an individual decides to make a will, one of the most important decisions they will have to make is who to appoint as their executor. The executor, or trustee, is the person who will be responsible for gathering all the assets after death, paying off all the debts and distributing the estate according to the terms of the will. They are also legally responsible for arranging and paying for the funeral. In light of the importance of this position, it is very important that any individual named is reliable, trustworthy and organized. I also advise my clients to name more than one individual so that there are alternates available in the event that their first, or even their second choice, is unavailable for whatever reason.

For anyone who is asked to be an executor, it is very important that you give this some serious thought before agreeing. As an executor, you will be legally responsible for the estate. Do you have the time to take on this task? If you do have the time, do you have the necessary organizational skills to complete this task? Will you be able to act as referee between the beneficiaries if a dispute arises? Aside from all these considerations, in my opinion, the most important question you need to ask yourself is: When the time comes, will you be able to get the job done, despite the emotions you may be feeling as a result of the death of your loved one?

I have only ever performed the duties of an executor once in my lifetime. As an estate lawyer, I can tell you without hesitation all the duties and responsibilities that are involved with the position. I have assisted my clients as they performed these duties many times in the past. However, when the time came for me to perform these tasks, I found it much more difficult because this time the tasks were very personal.

For anyone who has ever had to perform these duties for a loved one, I am sure you understand the emotions involved. When my aunt passed away on the morning of May 12th, 2008, my family and I were devastated. The last thing I wanted to do was “work” but things needed to get done. Since my aunt passed away at home, it was my responsibility to contact the funeral home and arrange for her body to be picked up. It was one of the hardest phone calls I’ve ever had to make.

Later that afternoon, I accompanied my uncle and cousins to the funeral home to make all the necessary arrangements. The number of decisions that needed to be made within the span of a few hours was mind numbing – where and when will the funeral service take place, what kind of casket did we want, who will write the obituary, should we buy the flowers from the funeral home or from a flower shop, how many memorial cards did we want to order, how many family cars did we want to rent for the day of the funeral, did we want to pay the funeral home to prepare a memory board or did we want to take the time to prepare it ourselves, where would the reception take place after the funeral, did we want to make food for the reception or simply hire a caterer?

For most families, when a death occurs, the first real decision that needs to be made is where the burial will take place. In my situation, that decision had been made for us because my aunt instructed me to pre-purchase burial plots for her and my uncle months before she died. In fact, some individuals not only pre-purchase their plots but they also pre-purchase and pre-arrange their entire funeral service. This was not the case in my aunt’s situation. She simply asked me to arrange for the purchase of the plots but she told our family that it was up to us to make the funeral arrangements.

After the funeral is done, the more “normal” tasks of an executor must be done – insurance companies must be notified in order to collect the benefits; CPP death benefit applications need to be completed and filed; the Canadian government must be notified in order to cancel any benefits such as pensions, disability benefits, old age security, GST, etc., and the death certificate needs to be ordered. The government must also be notified to cancel the Social Insurance Number of the deceased. In addition, a determination needs to be made if the Last Will and Testament of the deceased needs to be probated at the Court of Queen’s Bench. The need to probate a will is determined by the type of assets the individual owned at the time of their death. Please consult a lawyer when making this determination.

Once a will is probated (or not), the executor then needs to deal with the assets of the estate. All debts must first be paid off and this includes the funeral. Once the debts have all been dealt with, the assets can then be distributed to the beneficiaries in accordance with the will. However, executors need to keep in mind that they must file the deceased’s year of death tax return and an estate tax return. Consequently, the executor should hold back a certain sum of money in order to ensure that there are sufficient funds to pay any income tax liabilities. Generally, it is prudent to distribute only a portion of the assets early on and then distribute the rest of the funds once all the tax returns have been filed. It is for this reason that most estates take approximately one year to finalize. Executors also have the option to request a tax clearance certificate from Canada Revenue Agency to ensure that the estate owes no further taxes before distributing the remaining assets of the estate.

For those who decide to take on this very important role, my advice would be to make sure that you keep very detailed records. Once you take on this role, keep a ledger of all your activities. If you spend half an hour meeting with the estate lawyer and giving her instructions, write that down. If you spend 2 hours talking to a couple of the beneficiaries about the assets, make a note of that. If you spent five minutes on the phone with the bank, write that down. Keeping very careful and meticulous notes of everything you have done for the estate will ensure that if you are asked to appear before the court because a beneficiary has asked for a formal reporting (which is called “passing the accounts”), you will be prepared. On a personal note, depending on how close you are to the deceased, you must also be prepared to put your emotions aside in order to get the job done.

I would like to take this opportunity, on behalf of the Senaris, Mercado and Monton family, to extend our appreciation to our relatives and friends who joined us as we mourned the passing of Marina Mercado Senaris, a beloved wife, mother, sister, aunt, cousin and grandmother. Please join us as we commemorate her death anniversary on Tuesday, May 12, 2009 at St. Peter’s Roman Catholic Church at 7 p.m. A reception will follow the mass at the church hall.

Disclaimer:

The content of this article is not intended as legal advice and is for information purposes only. Should you require legal advice on a specific issue relating to the contents of this article, please seek the services of a legal professional. Alona C. Mercado is a lawyer practicing in Winnipeg with the law firm of MONK GOODWIN LLP. She was called to the Manitoba Bar in 1999 and the Ontario Bar in 2003. Her preferred areas of practice include wills and estates, committees, real estate, business and commercial transactions, and immigration law. Alona can be reached at (204) 956-1060 ext. 233 or amercado@monkgoodwin.com.

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