When a loved one passes away, their affairs need to be properly managed and settled. In Ontario, an estate trustee plays a vital role in ensuring the smooth administration of an individual's estate. Also known as an executor, the estate trustee is entrusted with the responsibility of carrying out the deceased person's wishes as outlined in their will. This introductory guide aims to shed light on the duties and responsibilities of an estate trustee, providing a comprehensive understanding of their role in the estate administration process.
The Five Major Duties of an Estate Trustee
The following are the five more important duties of an Estate Trustee:
1. To obey the directions of the Will;
2. To act impartially between beneficiaries;
3. To exercise ordinary care and prudence;
4. To place trust duties before his or her own;
5. To be ready to account.
Estate Accounting
One of the first things an estate trustee should do is to establish a special bank account for the estate. A bank will require a Notarial copy of the Courts Certificate of Appointment of Estate Trustee, photo identification and a signature card.
Debts and Taxes
The estate trustee must make sure that all of the deceased’s creditors are paid. Similarly, it is technically illegal for the estate trustee to distribute the estate before satisfying all income taxes owed by the deceased and by the estate trust.
Estate Inventory
The estate trustee must, as soon as possible, look into the deceased’s documents and papers to determine the condition of the estate. Since the estate trustee must obtain fair market value for any assets to be sold, we recommend full appraisals where there is any potential for disputes by the estate beneficiaries. In most cases, however, a “letter of opinion” from an independent qualified real estate agent will suffice for the valuation of real estate.
Executor’s Year
The Estate Trustee generally is allowed one year from the date of death of the deceased to realize the estate assets and prepare a proposed distribution. No beneficiary can insist on an earlier distribution.
Investments
While in control of an estate the trustee has a duty to manage the assets as would any reasonably prudent person. Again, there are rules to trustee investments. If there are assets of any significant value, we recommend the estate trustee invest the estate funds in conservative investments.
Distribution of the Estate
Before distributing the estate, the estate trustee should provide an accounting to the beneficiaries and obtain from them a Release confirming they are satisfied with the account and the proposed distribution to them. If the estate trustee is satisfied that there will be no complaints or disputes in regard to the delivery of specific legacies, we recommend the estate trustee payout specific legacies as soon as possible after the date of death so as to avoid claims for interest on those legacies.
Passing of Accounts
If even one of the beneficiaries is dissatisfied with the account and proposed distribution of the estate, the estate trustee has little choice but to prepare accounts in a special format and arrange for a “passing of accounts” by a Judge of the Superior Court. For most simple estates we can assist in the preparation of this type of account; but for complex estates we will direct the estate trustee to an Accountant who is experienced in preparing this format of accounting for a passing of accounts.
It is important to note that estate administration can be a complex and time-consuming process, requiring careful attention to detail and adherence to legal requirements. Estate trustees often seek professional advice from lawyers, accountants, and other experts to fulfill their obligations diligently. This guide aims to serve as an informative starting point, but it is not a substitute for professional legal advice.
At Carson Law, we can help guide you through the process of being an Estate Trustee.
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905-336-8940 x 1000
info@carsonlaw.ca
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The content on this web site is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this web site are advised to seek specific legal advice by contacting members of Carson Law, Carson IP, or their own legal counsel regarding any specific legal issues. Carson Law does not warrant or guarantee the quality, accuracy or completeness of any information on this web site. The articles published on this web site are current as of their original date of publication, but should not be relied upon as accurate, timely or fit for any particular purpose.