INTRODUCTION xiii
PART 1: TO BE, OR NOT TO BE, AN EXECUTOR 1
1 FINDING OR CHOOSING AN EXECUTOR 3
1. It's Tough to Choose a Good Executor 3
2. It's Tough to Be an Executor 3
3. How I Discovered What Being an Executor Was All About 4
4. The Need Will Never Go Away 6
5. Who This Book Is For 6
2 THE FAQS OF LIFE FOR EXECUTORS 7
1. What Is an Executor? 7
2. What Are Sole, Joint, and Alternate Executors? 7
3. To Whom Am I Responsible As Executor? 8
4. The Will Says I'm Executor, So I Am, Right? 8
5. What's Probate, and Why Do I Need It? 10
6. When Does My Authority As Executor Begin? 11
7. What Do I Have to Do As Executor? 13
8. What Liabilities Do I Face As Executor? 14
9. What Are the Attributes of a Good Executor? 15
10. What If I Don't Want to Be Executor? 15
11. How Do I Decide to Be an Executor or Not? 15
12. Can I Change My Mind after I Start? 17
v
13. Can I Get Help? 18
14. Who Can Help Me and How Do I Find Them? 18
15. Lawyers 18
15.1 Advantages of using lawyers 18
15.2 Lawyers' fees 19
15.3 Finding a good estate lawyer 20
15.3a Step 1: Get the names of five good lawyers 20
15.3b Step 2: Work the phone 21
15.3c Step 3: Visit the prospects 22
16. Accountants 22
16.1 Advantages of using accountants 22
16.2 Accountants' fees 23
16.3 Finding a good estate accountant 23
17. Trust Companies 23
17.1 How trust companies become executors 23
17.2 When to consider a trust company 24
17.3 Advantages of a trust company 24
17.4 Trust company fees and fee agreements 24
17.5 Finding a good trust company 25
18. The Challengers: Paralegal Services 25
18.1 Advantages and disadvantages of paralegals 26
18.1a Clarify what they will do 26
18.1b Keep control of the estate assets yourself 26
18.1c Be clear on fees 26
18.1d Finding paralegals 26
19. Specific Services 26
19.1 Tax-preparation services 26
19.2 Real estate agents 27
19.3 Personal property appraisers, evaluation specialists,
and auctioneers 27
vi SO YOU'VE BEEN APPOINTED EXECUTOR
PART 2: THE EIGHT DUTIES OF THE EXECUTOR 29
3 DUTY NUMBER 1: MAKE REASONABLE FUNERAL
ARRANGEMENTS 31
1. The Executor Makes Decisions about the Funeral 31
2. The Costs Must Be Reasonable 32
3. What If the Deceased Made Arrangements? 32
4. Be Careful with Headstones 33
4 DUTY NUMBER 2: FIND AND TAKE CONTROL OF THE
ASSETS OF THE DECEASED 35
1. Putting on the Rubber Gloves: My Trust Company
Experience 35
2. Securing the Residence 36
3. Perishable Items 36
4. Valuables That Can Walk 37
5. Important Papers 37
6. Credit Cards 38
7. Safety Deposit Box Key 38
8. Mail 38
9. Insurance Policies 38
10. Household Furnishings 39
11. Lists and Memoranda 39
12. Unspecified Items: To Sell or Not to Sell? 40
13. Vehicles 41
14. Contacting Banks and Financial Institutions 42
15. CPP, GST, and OAS 43
16. Businesses, Land, and Rental Properties 43
17. Collections 44
18. Loans Owing to the Deceased 44
5 DUTY NUMBER 3: PREPARE AN INVENTORY,
VALUE THE ASSETS, AND KEEP AN ACCOUNT 45
1. Open an Estate Account 45
2. Start an Estate Inventory 45
CONTENTS vii
3. Take Pictures 46
4. Evaluating Estate Assets 46
4.1 Real estate 46
4.2 Vehicles 46
4.3 Household goods 47
5. Five Reasons to Keep an Inventory and Accounts 47
5.1 For probate fees 47
5.2 For taxes 48
5.3 For the beneficiaries 48
5.3a Who are the beneficiaries? 49
5.3b Per capita and per stirpes 49
5.3c What if there are no alternative beneficiaries
in the will? 49
5.3d Special status for spouses and children 50
5.3e The expanding definition of spouse 50
5.4 For the creditors 50
5.5 For your own protection 51
6 DUTY NUMBER 4: FIND AND PROBATE THE WILL,
IF NECESSARY 53
1. What If You Don't Have the Will? 53
2. Calling the Lawyer 53
3. What If the Lawyer Didn't Keep the Will? 54
4. Looking for the Will 54
5. What If You Don't Find a Will? 54
6. What If All You Have Are Copies of the Will? 55
7. You Have the Will but Do You Need Probate? 57
8. Two Kinds of Assets That Do Not Need Probate 57
9. How Probate Protects the Executor 60
9.1 Advertising for creditors 60
9.2 Issuing notices 60
9.3 Passing accounts 61
viii SO YOU'VE BEEN APPOINTED EXECUTOR
10. Probate Confirms the Will Is Valid 61
11. Avoiding Probate in Small, Cash-Only Estates 61
7 DUTY NUMBER 5: DEAL WITH DEBTS AND CLAIMS
AGAINST THE ESTATE 63
1. Debts Relating to the Death 63
2. Debts of the Deceased 64
2.1 Looking for debts 64
2.2 Business or partnership debts 64
2.3 Medical bills and claims by caregivers 65
2.4 Insured debts 65
2.5 Advertising for creditors 65
2.6 Challenging claims by creditors 66
2.7 Child or spousal support 66
2.8 Leases and mortgages 66
2.9 Lawsuits against the deceased 67
2.10 Unenforceable debts 67
2.11 Claims by spouse or children for more of the estate 67
2.12 Paying debts 67
2.12a Enough for the debts but not for the beneficiaries 68
2.12b Not enough for the debts 68
2.13 One creditor always comes first 68
2.14 Keeping the house going 68
3. Debts Incurred by the Executor 69
8 DUTY NUMBER 6: PAY ANY TAXES OWING BY THE
DECEASED AND THE ESTATE 71
1. Capital Gains Tax 71
2. Tax Deferrals and Rollovers 74
3. Tax-Free Assets 75
4. Tax Returns at Death 76
5. Returns for the Deceased 76
5.1 The terminal return 76
CONTENTS ix
5.2 Three optional returns 82
5.2a Optional return 1: The rights and things return 83
5.2b Optional return 2: Business income return for
partner or proprietor 83
5.2c Optional return 3: Testamentary trust
income return 84
5.3 Claiming credits on optional returns 84
6. Unfiled Returns for the Years before Death 84
7. Returns for the Estate 85
7.1 T3 return for the estate 85
7.2 T3 return for any trusts in the estate 85
8. Tax and the Beneficiaries 86
9. Clearance Certificates and Holdbacks 86
10. Goods and Services Tax at Death 88
9 DUTY NUMBER 7: ACCOUNT TO, AND GET RELEASES
FROM, THE BENEFICIARIES 91
1. Why You Must Keep Accounts 91
2. It's a Self-Policing System 91
3. What the Beneficiaries Want 92
4. What the Executor Wants 92
5. What Unhappy Beneficiaries Can Do 92
6. Protect Yourself with Good Accounts 93
7. Beneficiaries Hate Silence 93
8. The Beneficiary Who Won't Sign but Does Nothing Else 94
9. Your Executor Fees 95
10. Avoiding Trouble over Executor Fees 95
11. Calculating Your Fee 96
12. Setting a Reasonable Fee 96
13. Some Executors Don't Charge a Fee 96
14. Can You Charge a Fee If You Also Receive a Gift? 97
x SO YOU'VE BEEN APPOINTED EXECUTOR
10 DUTY NUMBER 8: DISTRIBUTE TO THE BENEFICIARIES 99
1. Conversion to Cash or Distribution in Specie 99
2. Missing Beneficiaries 99
3. Deceased Beneficiaries 100
PART 3: TWO TYPICAL ESTATES 101
11 APPLYING THE EIGHT DUTIES TO TWO TYPICAL
ESTATES 103
1. Estate 1: Mary Smith - Sam's Wife and Mother of
Their Children 103
1.1 The eight duties of an executor and the estate of
Mary Smith 110
1.1a Duty 1: Make reasonable funeral arrangements 110
1.1b Duty 2: Find and take control of the assets
of the deceased 110
1.1c Duty 3: Prepare an inventory, value the assets,
and keep an account 110
1.1d Duty 4: Find and probate the will, if necessary 110
1.1e Duty 5: Deal with debts and other legitimate
claims 111
1.1f Duty 6: Pay any taxes owing by the deceased
and the estate 111
1.1g Duty 7: Account to and get releases from the
beneficiaries 111
1.1h Duty 8: Distribute to the beneficiaries 111
2. Estate 2: Sally Smith - Sam's Mother, an Elderly Widow 111
2.1 The eight duties of an executor and the estate
of Sally Smith 123
2.1a Duty 1: Make reasonable funeral arrangements 123
2.1b Duty 2: Find and take control of the assets
of the deceased 124
2.1c Duty 3: Prepare an inventory, value the assets,
and keep an account 124
2.1d Duty 4: Find and probate the will if necessary 124
CONTENTS xi
2.1e Duty 5: Deal with debts and other claimants
against the estate 125
2.1f Duty 6: Pay any taxes owing by the deceased
and the estate 125
2.1g Duty 7: Account to and get releases from the
beneficiaries 125
2.1h Duty 8: Distribute to the beneficiaries 126
APPENDIX 127
GLOSSARY 133
SAMPLES
1 Income Tax and Benefit Return CRA T1 General 2006 78
2 TX-19 Asking for a Clearance Certificate 87
3 Indemnity 109
4 Renunciation 116
5 Initial Inventory for Estate of Sally Smith, Deceased 117
6 Final Inventory, Estate of Sally Smith, Deceased 122
7 Account for Distribution Purposes, Estate of Sally Smith,
Deceased 123
8 Release 126
TABLES
1 Dependant Relief Laws 51
2 Names of Intestate Succession Laws by Province 55
3 Summary of Intestate Succession Laws 56
4 Probate Tax Rates by Province 58
