This is a basic checklist to provide general guidance on the duties of an executor of an estate. It is recommended that you seek professional advice from lawyers, accountants, etc. as require to ensure you have dealt with all items.
(NB If you have been appointed as executor, it is important that you take care in everything you do. The executor is responsible for properly handling of the affairs of the estate including paying the debts and taxes of the estate from its assets and to protect the interests of the beneficiaries.)
‒ determine if there is will and locate it;
‒ check with financial institution (look for bank statements if location isn’t known) for safety deposit box. If there is one arrange appointment to get a listing of the contents and copy of any will;
‒ ascertain what the wishes are for the body (which may be listed in will), i.e., organ donations, gift it to science, cremation, etc.;
‒ make funeral or memorial arrangements;
Tip Canada Revenue Agency and others normally accept a Funeral Directors certificate in place of the official government form.
‒ ascertain all the assets and liabilities which belonged to the individual including: bank and investment accounts, private stock holdings, mutual funds, real estate, vehicles, mortgages, loans, credit cards, leases, etc.;
Tip there is not a listing of assets, information on assets is often available from looking at previous income tax returns. Information may be found on income sources which issued T3, T4, T4A, T4AP, T5, etc and other slips will be attached.
‒ secure any property. This includes ensuring necessary utilities are on, e.g., heat as required for buildings; properties and vehicles are locked and checked on a regular basis as required by insurance;
‒ contact insurance company to change coverage to the estate for vehicles, homes, etc.
‒ cancel all credit cards, Alberta Health Care card and contact Service Canada to cancel social insurance card;
‒ retain a lawyer to advise on the administration of the estate and any other legal matters. Determine if it is necessary to apply for probate as it is not always required;
‒ retain an accountant to advise on income tax matters for the estate. The accountant should be consulted before any action is taken on sale or transfer of property and assets to ensure it is done in a manner which will minimize any taxes payable;
‒ there may be multiple tax returns to be filed and accountant can inform you of the filing deadlines;
‒ arrange for continuing operation of any businesses owned. This may be done by the staff if they are able, but may require the assistance of someone from outside the business;
‒ check any life insurance policies and notify insurance companies. Many people have small policies issued by their banks, credit cards, employers, etc; you should confirm if there are any policies in place and what are the terms of the policy;
Tip there may be up to $ 10,000 in tax free death benefits which may be paid by an employer to qualifying beneficiaries.
‒ apply for any pensions or other benefits which may be available including CPP death benefit, CPP survivor benefits, life insurance, annuities, etc.;
‒ if there are any Registered Retirement Savings Plans (RRSPs) – notify financial institution(s) of the death. RRSPs may be automatically rolled over to the surviving spouse, which includes common-law spouses, if the spouse has been named as the beneficiary under the plan itself.
If there is not a surviving spouse, the value of the plan is included in the income of the deceased. But, if there are dependant children or grandchildren the RRSP may be paid to and taxed to them;
Tip In the year of death or within sixty days following that year, the executor may make a contribution to a RRSP, up to whatever the contribution limit was for the deceased.
‒ if there are any Registered Retirement Income Funds (RRIFs) – notify financial institution(s) of the death.
NB RRIFs may be automatically rolled over to the surviving spouse, which includes common-law spouses, if the spouse has been named as the beneficiary under the plan itself.
If there is not a surviving spouse, the value of the plan is included in the income of the
deceased. But, if there are dependant children or grandchildren the RRIF may be paid to them, if the deceased left the RRIFs to them. They may be able to continue the tax deferral on all or part of the money;
A surviving spouse continues to receive payments from the RRIF subject to the same payment plan as elected by the deceased when the plan was established. The spouse may convert the RRIF to another RRIF or an annuity, should they wish to do so;
‒ if there are any Registered income annuities – notify financial institution(s) of the death. Treatment depends largely on the terms chosen when the annuity was established;
‒ advise beneficiaries of the death;
‒ make arrangements to pay any debts of the deceased and of the estate;
‒ place legal notices, as required, to notify any creditors of the death and who they are to contact if they have a claim against the deceased or the estate;
Tip it may be cheaper to place legal notices in a smaller circulation paper rather than one with large circulation.
‒ confirm any claims are legitimate prior to making any payment;
‒ have terminal tax return prepared. This is for income received from January 1 to the date of death. It is deemed that all assets owned have been sold for tax purposes by the deceased on the date of death, at whatever the fair market value was on that date. There are various rules which may allow for the transfer of some things tax free and you should consult with an accountant to ensure the best income tax treatment;
‒ it may be possible to file a “Rights and Things” tax return. This is a special tax return which may be used if there are certain income items. The time limit within which you may file a “Rights and Things”return is one year of the date of death or within ninety days of the assessment of the regular tax return, whichever date is later. Allow time for the accountant to see if there are any qualifying income items and file a return, within the allowable time period;
‒ trust tax returns may be required if the estate has earned income. The most common item on these trust tax returns is the Canada Pension Death benefit.
If the estates takes over a year to wind up, annual estate tax returns may be required until this is completed;
Tip it may be possible to pay out the income earned by the estate to the beneficiaries in which case the estate does not pay any taxes. However, if one or more of the beneficiaries is in a higher tax bracket than the estate, it is generally better to have the estate pay the taxes and distribute the income tax free to the beneficiaries.