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ESTATE ADMINISTRATION: Why, and what is done once someone passes?

In law, an estate can be defined as the personal, real, tangible and intangible property of an individual along with things of value to which the person (now dead) could lay a claim while s/he was alive. All such property can be given to others by a will through the process of probate, which could be a somewhat lengthy and costly affair. In order to avoid the probate process, people arrange to place their properties under trusts, joint accounts, accounts with rights of survivorship, or special vehicles, which in turn transfer the assets and properties to the intended beneficiaries. Normally, trust estates are looked after by the trustees chosen by the deceased when alive, and named thus in the will and/or trust declaration.  To administer the estate, trustees (sometimes also called executors, if simply acting in accordance with a will and no trust) take the help of experts, such as lawyers and the like. To help with your estate administration it would be wise to speak with the lawyers at Levy Zavet PC.

Duties of the Trustee

At the outset, it is imperative to be clear about who does what. It may be the lawyer’s responsibility to inform the estate trustee of her/his duties as well as receive instructions. If there are more than one trustee, it follows that the lawyer has to take instructions from all of them. Nonetheless, one of the trustees may be designated for this purpose; when the lawyer interacts with that person alone, given the consent of the others. Generally, the estate trustees are of two types, a corporation and/or an individual person(s). The corporate variety carries out work, like preparation of the inventory of the estate, insuring and collecting assets, recording of and keeping accounts, and preparation of tax or trust returns; leaving the lawyer to perform only the legal administration. The individual person(s) trustee will need the lawyer’s help in almost everything. Although there is no prohibition against the trustee taking help from someone else, the lawyer should make it clear that all discretionary matters (such as choosing who gets what?) are to be dealt by the trustees personally. However, with regard to investment  management of estate assets, recent amendments to Ontario’s Trustee Act, allow a trustee to engage an investment manager for help and to delegate certain duties to him/her.

Problems in hand

The most immediate task of the family, the trustee and the lawyer (who may not be the one writing the will) is to find the will. In that event, the said lawyer (who helped prepare the will) would perhaps get in touch with the family upon reading obituary notices in local papers (hence it is always a good idea to provide notice in the obituaries). Anyway, it is quite possible that the family members would take the initiative to contact the lawyer. The next matter of concern is the funeral arrangements, which in all probability would be started by the family members. There is no bar on the estate trustee to inform the funeral home, and to pay a reasonable amount as a priority expense for the funeral, keeping in mind the prestige and status of the deceased. If the deceased has donated the body or some parts thereof, the lawyer has to tell the family about it and refer to the Trillium Gift of Life Network Act; a legislation governing the donation of body parts/organs or the whole of the body. It specifies that the consent of a deceased donor is required for use of tissue, and that family does NOT override such consent. It is also imperative that the trustee keeps all the beneficiaries informed so as to avoid uncalled for suspicion and resulting anger and frustration. With regard to assets, it is for the lawyer to advise the trustee to take appropriate care of the properties, and to make arrangements for insurance (if what is currently in place inadequate). Actually, it would be necessary to look into the private dealings of the deceased to get a fair idea of the assets. In this connection, it is good to refer to the income tax returns filed in the past by the decease so as to obtain a clear picture. This category of items requiring a thorough examination includes moneys on deposit, personal effects and household goods, insurance policies, business interests, armed forces benefit, employee benefit, real estates and the like.

Certificate of Appointment

Now an inventory or inventories of assets are to be made so as to, certify the will (ie. probate the will declaring it as the last will and testament of the deceased by the court), make an application for a Certificate of Appointment of an Estate Trustee (ie. certifying the individuals or corporation as the estate trustees by the court as per the will or otherwise if without a will), and to complete the final income tax return. As stated earlier, a will diligently written contains the name or names of the trustees. Deriving their power from the will itself, the trustees face no difficulty in deciding on the matter of assets and distribution thereof immediately after the death of the person making the will. Problems occur when the will is not clear about the trustees, or when the person has died intestate (without a will). In the latter instance, an application has to be made to the Ontario Superior Court of Justice by a person of interest (a dependant etc…) to be appointed as estate trustee. This process is called obtaining a Certificate of Appointment of Estate Trustee Without a Will; a court order outlining the authority granted to the estate trustee. The Ontario Superior Court of Justice grants many appointments of this nature, even when there is a properly drafted will and the trustees named therein are able and willing to act. In that instance, it would be a Certificate of Appointment of Estate Trustee With a Will; and be also applicable where the trustees are unwilling to act or when they are all dead. Incidentally, the estate administration tax (probate tax) has to be paid before the Ontario Superior Court of Justice grants the Certificate.

There are many such issues including the instance where a lawyer acts both as estate trustee and as the lawyer for the estate. Subsection 61(4) of the Trustee Act apparently has nothing against it. Administering the estate of someone who passed is not an easy task, and carries with it the difficult burden of prudency and legitimacy, as well as legal and financial ramifications, it is of your best interest to contact the lawyers at Levy Zavet PC to assist in such matters.