The 10 Things to Do First as Ontario Estate Trustee

Published on 29 August 2022, 07:22:56 AM

Business Law Family Law Notary Public Probate Law Real Estate Law Uncategorized Wills & Power of Attorneys

The funeral is over, you have the death certificate and the final will is approved by an Ontario probate court. You’ve been confirmed as estate trustee and have a court-issued certificate of appointment to prove it. Where to from here? Here are the 10 things to do first as executor or personal representative for the deceased.

1. Set up an estate bank account. 

Keep the deceased’s money separate from your own. Retain receipts and records for all transactions so you can show what money the estate received, where it came from and where it went. Invoices for your fees and expenses and those paid to professional advisors are especially important. 

2. Cancel obligations and collect benefits.

Notify employer and government pension plans and Canada Revenue Agency (CRA). Request CPP death benefits and other survivor’s benefits. Cancel utilities, credit cards and credit lines, health insurance, SIN, passports and insurance coverage that’s no longer needed. 

3. Identify beneficiaries and spousal obligations.

Collect copies of separation, divorce or support orders, marriage contracts, adoption orders, names and contact information for beneficiaries, children outside of marriage and charities named in the will. A surviving spouse has a right to elect an equalization payment, instead of gifts left to them in a will. Wait at least six months before distributing the estate to heirs to give the spouse time to exercise their options.

4. Sell assets.

Presumably by now, you have a list of assets and their approximate values. Antiques and collectibles dealers can help you organize a private sale or auction. Be sure to clear any liens, such as outstanding amounts owed on a car or other vehicle, before you sell secured assets. Look out for unexpected liabilities, such as house insurance that has lapsed or a lake cottage that needs closing up for winter. If the deceased’s home hasn’t passed to a surviving spouse, you are responsible for charging ‘occupation’ rent at fair market rates, even if the occupant is a family member. Likewise, a family member who wants to purchase a family home must pay the going rate. A real estate agent or appraiser can help you set a price.

5. Maximize income.

Since estate administration can take some time, executors are expected to maximize any investments by earning income in the meantime. You are liable if the estate is disadvantaged by your decisions. Fees for accountants or investment advisors can be paid from the estate, provided they are reasonable. Be prepared for surprises. For example, bank accounts or real estate held jointly with adult children (but not minors or spouses) belong to the estate. The onus is on the account holder to prove the proceeds were gifted to them and not all the estate beneficiaries.

6. Pay debts and taxes.

Avoid creditors and taxes at your peril. You are financially liable for any debts or taxes you fail to pay out of the estate. Before you distribute any property or possessions to heirs, be sure income taxes, property transfer taxes, capital gains, estate fees, penalties and creditors are paid in full. If outstanding debts come to light afterwards, you could be forced to pay the cost yourself. You can place a notice to creditors and claimants in local newspapers to give fair warning. Canada Revenue Agency (CRA) requires a tax return for the estate once your job is done.

7. Dispense with assets not in probate.

Assets with named beneficiaries, such as life insurance policies and investments that are left to specific heirs and not the estate, do not have to go through probate. The beneficiaries can usually collect these by producing a death certificate and their I.D. 

8. File the estate information return.

Gathering up assets quickly is important. You have 180 calendar days after your appointment to file an estate information return with the Ontario Ministry of Finance. The return includes information about you, your certificate of appointment, the deceased and the estate assets.

9. Keep accurate records.

Naturally, the court and heirs want to know how you spent the deceased’s money. Keeping accurate records is a must. While you can dispense with the formalities if the heirs agree, anyone who objects to the way you handled the estate could force you to provide the accounts. If , expect to be asked by the court for your records.

You could be asked by the court for your accounts if:

  • heirs are concerned you mismanaged the estate
  • you fail to communicate with heirs
  • your compensation or fees are disputed
  • you take too long to distribute the estate
  • you sold assets for less than they were worth or favoured some heirs over others
  • or minors, adults with disabilities or unborn grandchildren are part of the estate.

Costs to have a professional assist you with the records can be charged to the estate. But the court could order you to return money if you can’t prove you used it for legitimate purposes.

10. Pay yourself last.

After all is said and done, pay yourself and any other estate trustees. Oh, and pay your own taxes or expect a visit from the CRA.

Get Advice to Probate an Ontario Estate

Axess Law’s Ontario probate lawyers can arrange a certificate of appointment of estate trustee. Dial 1-877-522-9377 or in Greater Toronto 647-479-0118 or use our online booking form to make an appointment for a remote video call. We’re available 7 days a week, day or evening, at your convenience. In-person meetings can be arranged in Ottawa, Toronto, Scarborough, Vaughan, Etobicoke, Mississauga Winston Churchill or Mississauga Heartland.

Click here to learn more about Axess Law’s probate law services.

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