Five Things Estate Trustees Should Do Right Away

The estate trustee is the person who is primarily responsible for the administration of the estate. They have a fiduciary duty to hold the estate in trust for the beneficiaries unless a contrary intention is expressly provided in the will. As a general rule, estate trustees must act personally, i.e. estate trustees must act in the best interest of the estate. These are five things an estate trustee should do right away.

5. Identify and Secure the Assets

The estate trustee is responsible for locating, securing and protecting the assets of the estate. It is necessary for the estate trustee to keep a list of the assets of the estate to assist in completing the application for a “Certificate of Appointment of Estate Trustee”. Doing this ensures that the future preparation of the accounts and the completion of any income tax returns including the terminal tax return goes smoothly. Estate trustees should determine the following:

Did the deceased have any assets that were jointly owned with another individual? (This includes any joint bank accounts or real estate with spouses or children)

Did the deceased have any insurance policies with beneficiary designations?

Were there any jewellery, real estate, vehicles that would form part of the Estate?

4. Notify Others of the Death

The estate trustee is responsible for contacting all financial institutions where the deceased held accounts or securities and to notify them of the deceased’s death. If the deceased held interest in a business or was part of the management of a business, it would be the responsibility of the estate trustee to ensure business continuity and appropriate management.

3.Identify any Liabilities and Pay Taxes

The estate trustee can incur personal liability during the administration of the estate. Typically this occurs when the estate trustee distributes assets of the estate to the beneficiaries without making adequate provision for the payment of any and all estate debts. This is especially significant where taxes are concerned.

Estate trustees are required to file taxes with respect to the estate, including: any returns before the death of the deceased in which the deceased did not file a return, a return for the year of death covering the period from Jan 1st to the date of death and a T3 Income Tax and Information Return. A clearance certificate must also be obtained from the Canada Revenue Agency before making any final distribution to the beneficiaries.

2. Open an Estate Bank Account

Estate trustees are required to open an estate account after the deceased dies. This account is used to deposit the deceased’s money, pays the deceased’s debts and bills and to ultimately distribute the remaining funds to the beneficiaries of the estate. Banks generally require a notarial copy of the will with the estate trustee named, as well as a notarial copy of the Certificate of Appointment of Estate Trustee.

1. Consult a lawyer

It's up to the estate trustee to decide whether or not to retain a lawyer, but it's almost always a good idea. Estate trustees are performing a legal function. If the nature of the assets require you to probate the estate, lawyers generally assist with the information necessary to make an application to become an estate trustee. The lawyer acts as the lawyer for the estate trustee.

The lawyer will advise the estate trustee on matters that require immediate attention including the applicability of limitation periods, notifying beneficiaries, the disposition of assets and provisions for the needs of any dependents. Without the assistance of a lawyer, it's easy to get in over your head and even end up facing personal liability for a mistake.