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Being an estate executor is a job in itself, but there is help

In January we presented a list of duties for estate executors in Ontario. Although the list is not exhaustive, it begins to illustrate just how overwhelming the job of an estate executor can be -- because, make no mistake, it is a job.

In fact, an estate trustee's obligations increased significantly at the beginning of 2015 when Ontario's new probate-filing rules went into effect. Now, to determine the Estate Administration Tax, a person named as the estate executor must file an Estate Information Return that details, with a list of assets, how the value of the estate was calculated. Prior to the rule change, the estimated value of the estate could be reported without a detailed explanation.

There is also a time frame for the filing. If you have been named as an executor, then you must file the Estate Information Return within 90 days of receiving your Certificate of Appointment of Estate Trustee.

With these new obligations, audits and penalties are more likely, and executors face a greater possibility of being held liable for mistakes. And while it may be possible to set aside estate funds in case auditors find a discrepancy, beneficiaries may be unwilling to allow those funds to be reserved for the purpose of limiting an executor's liability.

These and other concerns underscore the importance of choosing the right person as an estate trustee. For example, someone local is likely a better choice than someone who would have to look after the estate from another province or country. Depending on the circumstances, it may also be a good idea to choose joint executors to split the duties.

In any case, to prevent costly mistakes, estate planners and executors alike would be wise to seek guidance from a professional who is familiar with the legal and financial aspects of estate planning and estate administration.

To learn more, please see Hagel Lawfirm's overview of Estate Administration and Probate.

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