The death of your spouse or a loved one can mean changes in your life and your life goals. Your advisors will be pleased to help you with strategies and advice for balancing your priorities and making progress towards achieving your financial goals.
On the death of your spouse or a loved one or friend, you may find that you have been named as the executor (or executrix) of a will.
The Executor could also be a trusted friend or an advisor or even a trust company. If the deceased did not have a Will or the Will did not name an Executor, then the Surrogate or Probate Court will have to be approached and the court will appoint an appropriate person as the representative. This person is called the Administrator and fulfills the same role as the Executor.
Disposition of an estate is a provincial/territorial concern and each jurisdiction has basic rules outlining what the Executor must do. Many properly drafted Wills will also lay out specific responsibilities or powers given to the Executor which actually makes the process simpler. Check the deceased’s Will to see the powers given to the Executor.
Executors are responsible for paying probate fees on the estate. These fees are essentially provincial/ territorial death taxes applied to the value of the deceased’s assets. They are calculated based on a percentage. Therefore, the larger the estate, the higher the probate fees. Probate fees are theoretically intended to pay the costs government incurs to settle a deceased’s affairs. These are a provincial concern and vary quite widely across the country. For example: In Ontario the probate fees (called the Estate Administrate Tax in Ontario) are $5 per $1,000 of estate value up to $50,000 and $15 per $1,000 of estate value over $50,000. Therefore, if an Ontario resident died with an estate value of $200,000, the probate fees would be:
$50,000/$1,000 X $5 = $250 plus, ($200,000 - $50,000)/$1,000 X $15 = $2,250 for a total of $2,500.
Depending on the nature of the estate, you may want to call in outside professionals to assist in winding up the estate. If the estate is complicated, your advisor will have trusting relationships with lawyers and accountants that you can work with. Also, your advisors will be able to assist you with respect to your insurance, estate plans and investments.
Although many family members who are named Executors choose not to be paid, provincial law does allow for reasonable compensation for the Executor. If the Executor is paid, there are guidelines established, but the court would have the final say on whether the compensation is appropriate. Any reasonable ongoing expenses incurred to wind up the estate would also be paid. For more information about the role of an Executor, please refer to the Executor’s Handbook. To complement the Executor’s Handbook with information specific to Quebec, please refer to the Liquidator’s Handbook.
Now would probably be a good time to update your own Will and review your own estate arrangements. This Will planning checklist will guide you through various things to consider before making your personal Will. As well, this estate planning checklist will provide insight to the areas you should give attention to when planning your estate.
Here is a link to a basic Will: Last Will and Testament
A lawyer should be consulted when a Will is being considered. There are legal and family issues that need to be addressed if this route is taken.
Talk to your advisors about lawyers and accountants that you can work with as well as your insurance, estate plans, and investments.