Co-Executor of Estate

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frustratedwithex

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Anyone have experience with this?

I am co-executor of my fathers estate. My brother is executor.

A lawyer we contacted has advised us to advertise for creditors in the local papers. He has indicated that this needs to be done to protect us as executors so that we will not be personally responsible for any debts.

Is the estate not responsible for the debts?

How long after the estate is settled can a creditor make a claim?
 
I am thinking that the reasoning is you may not know all the creditors. If the estate is settled and everything divided then a creditor comes out of the woodwork then how do they get their owed money? If they can prove you didn't do what you could to find creditors then maybe the executor is on the hook. Not sure but that's the only reason I can think of

here is a link to a site that may answer some questions.

http://estatelawcanada.blogspot.ca/2010/10/whats-executors-role-with-respect-to.html
 
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Thank you. That link has a wealth of information.

I am trying to be as informed as possible before entering the lawyers office.

My dad appointed me as co-executor not intending me to actually be the co-executor, but for my ex., (married when my dad drew up the will), to work with my brother as co-executor. My dad valued my exs business abilities. I remember my ex being really pissed about this at the time. Anyways, I am okay doing this. I think I am better prepared to deal with a lawyer now then I would have been a few years ago.

The lawyer on this web-site indicates we can decide to advertise or not. If we are certain there are no other creditors, I suppose we don't need to advertise.

However, she goes on to say we are personally liable for any mistakes made. So I guess it is a case of cover all our bases.
 
frustratedwithex said:
Thank you. That link has a wealth of information.

I am trying to be as informed as possible before entering the lawyers office.

My dad appointed me as co-executor not intending me to actually be the co-executor, but for my ex., (married when my dad drew up the will), to work with my brother as co-executor. My dad valued my exs business abilities. I remember my ex being really pissed about this at the time. Anyways, I am okay doing this. I think I am better prepared to deal with a lawyer now then I would have been a few years ago.

The lawyer on this web-site indicates we can decide to advertise or not. If we are certain there are no other creditors, I suppose we don't need to advertise.

However, she goes on to say we are personally liable for any mistakes made. So I guess it is a case of cover all our bases.
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your welcome. I have saved the link to it as when my mother passes (hopefully not any time soon) I will be in the same boat as you except its just me. A little knowledge is always a good thing instead of depending totally on lawyers.
 
I thought family (divorce) was expensive.

Considering estate law rarely requires court attendance by lawyers, I was absolutely HORRIFIED at the cost of estate lawyer after my mother passed away.

Probably the biggest rip off I've ever encountered.
My mistake is that the lawyer gave me a verbal estimate. When the bill came it was 10x more and everything was very simple.

Horrifying to say the least. I would have preferred the money to have gone to charity. Absolutely disgusting.

Expect it to take a few years, even if there is a will, etc. Like everything else, if there is money you can expect a lawyer who handles the estate to extract every cent they can from it.
 
To further vent, I would add that perhaps estate lawyers are those lawyers who couldn't handle the court appearance required frequently while handling divorces?

Disgusting breed of lawyers in my opinion.
 
arabian said:
I thought family (divorce) was expensive.

Considering estate law rarely requires court attendance by lawyers, I was absolutely HORRIFIED at the cost of estate lawyer after my mother passed away.

Probably the biggest rip off I've ever encountered.
My mistake is that the lawyer gave me a verbal estimate. When the bill came it was 10x more and everything was very simple.

Horrifying to say the least. I would have preferred the money to have gone to charity. Absolutely disgusting.

Expect it to take a few years, even if there is a will, etc. Like everything else, if there is money you can expect a lawyer who handles the estate to extract every cent they can from it.
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How expensive?

We have asked three different lawyers, including my divorce lawyer, all of them are estate lawyers, and they are all pretty close in pricing.

They have quoted a flat rate plus a % of the estate. This is consistent with what I know. Essentially the fee is based on the value of the estate as per the Surrogate Rules. Two of the three lawyers attached a copy of these rules.

  • So what was the rip off?
  • What were you horrified at? and why was the bill 10x more?
  • Did you not check what the lawyer was doing?
  • Is there some stuff that can be done without a lawyer?
The lawyer needs to apply to the court for Grant of Probate, how much did that cost and what else did your lawyer do?
 
My husband and I just signed for the final clearance certificate for my father-in-law's estate. He passed almost 2 years ago in December.

We did not advertise in the newspaper, but we had handled his finances for a couple of years, so knew there wouldn't be anything outstanding.

We did most of the work ourselves. We took care of calling in all of his investments and setting up the estate account and sold his house and land. We kept very detailed financial records.

We found the accountants charged more than the lawyer did. She did not take a percentage... told me to keep the paperwork simplified because she charges by the page.

If you miss a debt owed, or CRA comes back with questions on taxes, then you the executors are responsible to repay that debt. Once you have the final clearance certificate, then anything that has been missed is the responsibility of the beneficiaries.

Hope that helps.
 
paris said:
My husband and I just signed for the final clearance certificate for my father-in-law's estate. He passed almost 2 years ago in December.

We did not advertise in the newspaper, but we had handled his finances for a couple of years, so knew there wouldn't be anything outstanding.

We did most of the work ourselves. We took care of calling in all of his investments and setting up the estate account and sold his house and land. We kept very detailed financial records.

We found the accountants charged more than the lawyer did. She did not take a percentage... told me to keep the paperwork simplified because she charges by the page.

If you miss a debt owed, or CRA comes back with questions on taxes, then you the executors are responsible to repay that debt. Once you have the final clearance certificate, then anything that has been missed is the responsibility of the beneficiaries.

Hope that helps.
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Thank you. That is great information.

What did you have the accountants do?

Did you set up the estate account first, then sell the house? and why did it take 2 years for the final clearance?

My dad was in his 90s, he did not have a lira, life insurance, and I believe there are no other investments. Not sure if that will simplify things.

How long did it take to get the grant of probate?
 
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I'll try to recall without digging out paperwork.

My father-in-law was 93. He died in January 2012. (I know, I said December... his twin brother died in December after him). The estate account was opened in February, but we couldn't access it until probate was established in March. We then proceeded to cash in the investments. That took some time... there were several, and we did most of that ourselves.

There were 3 tax returns to file, and then the estate return. Some took longer to come back. We didn't sell the house until May of 2013 (there had been provisions made in the will for my husband and I to remain in the home).

The accountants did all of the tax returns. They also had to deal with some tricky tax issues.

Our biggest holdup was one of the beneficiaries taking their sweet time about replying to paperwork. But we are past that now.

Hope that helps.
 
Frustrated, sorry for your loss.

Are you sure you need to probate this estate?

If your dad didn't own real estate, and if his bank will release his funds to the trustees without probate, then you shouldn't need to apply ~a notarial copy of his will and a release/indemnification in favour of the bank, signed by the trustees, might very well satisfy the bank [particularly if the 2 trustees are the 2 beneficiaries].

If he did have real estate/investments that require probate, I've found in our region the turn around time is about 2-3 weeks following application (but that timing varies by region).

Once probate is granted, the trustees can cash/draw the funds from all sources and make an initial distribution to the beneficiaries.

You'll prepare a proposed distribution statement that lists the expenses/assets of the estate [which will include trustee compensation if you decide to take it], and have each beneficiary approve the statement in writing, and provide a preliminary release in favour of the trustees, before any funds are distributed.

From the initial distribution, you should holdback (and this holdback would be set out in the above distribution statement): your estimate of any taxes payable by your late dad/his estate; any legal fees/accounting fees payable to wrap it up.

You'll need to file a T1 return (for the year of death), and then a T3 return (tho I think a T3 is required only if the estate has earned more than $500, but that figure might have changed = if the estate has earned less than $500 than I believe a beneficiary can claim that smaller income on his/her personal return).

Once you receive the NoA, you can apply for the clearance certificate and once you have that certificate, you complete your final distribution statement, send it out to beneficiaries again for their final approval and request final releases in favour of the trustees.

If you can ascertain if probate is not required, you can pm me and I can send you a draft form of distribution statement/ releases. If this is a smaller estate, it should be fairly simple for you and your brother to handle without a lawyer involved.
 
As mcdreamy said... when my father-in-laws brother died he didn't own any property, so his will was not probated. His only 2 children were his beneficiaries.
 
for some simple estates 2 yrs is not unusual.

Keep cash somewhere for your children to access in the event of your death (to pay urgent bills, etc.). Once you die everything gets frozen.

An uncomplicated estate can take 2 yrs before money is distributed.

This is rule-of-thumb sort of advice from many people I know.
 
arabian said:
for some simple estates 2 yrs is not unusual.

Keep cash somewhere for your children to access in the event of your death (to pay urgent bills, etc.). Once you die everything gets frozen.

An uncomplicated estate can take 2 yrs before money is distributed.

This is rule-of-thumb sort of advice from many people I know.
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E.g. Belize, Virgin Islands and the Isle of Man?
 
A joint account may be immediately accessed by your children. In our family this is intended for use in the time leading up to death (if it were an illness, not an accident) , to cover immediate expenses like a hotel.

A life insurance policy will generally pay out very quickly, intentionally to cover funeral expense. Of course make sure that the children know about the policy, which company, the agent's contact information, etc.

Speaking of a simple estate, it can drag out for two years easily because of CRA. It may take some time cash out some investments, and this can cross the calendar year, meaning that taxes on the estate will have to be paid the following taxation period. It is possible to pay out the body of the estate beforehand, and retain some cash to pay the last tax bill, but oftentimes an executor will want to settle all liabilities first, and pay out when the final tax bill is settled.
 
Because my father-in-law died in January 2012, we had to do a personal tax return for 2012, and then do one for 2013. Then there was an estate return, and then a small one after the sale of the house.

We couldn't access his bank accounts, but the bank did pay out any bills we took to them. I know we took them the funeral bill and a hydro bill.
 
Thanks to all for this info.

mcdreamy;

There will need to be a grant of probate. My dad owned his condo so we will need the probate to sell. Other than his condo, there really is nothing else to the estate. A small amount of cash in the bank and a Manual Life mortgage he took out on the condo in the last few years. No investments, lira, pension, other than government. Should be simple.

From what I understand from all the posts is;

  1. Apply for probate first. What will this entail? Supply the lawyer with what documents?
  2. Open estate account after probate is granted.
  3. Prepare proposed distribution statement.
  4. File tax return for 2013, year of death.
Arabian;
Any suggestion on how to keep the cost down? Lawyer cost and accounting cost?
 
You don't need to use a lawyer. I used one because I thought I would get a deal (wrong) and I have to admit I was lazy and after divorce crap I didn't want to have to deal with any legal things at the time.

I found out afterwards that it wouldn't have been a big deal to do it myself.

Do some research (online) about what steps you have to take. Believe me, if you do something incorrectly, CRA will point it out to you. Actually, CRA will likely be able to help you do what you have to do. I'd check out all of the free resources available to you.

Many, many people do not have money to hire lawyers and, like family law, have to do it themselves.

I know I was totally stupid to have hired a lawyer, particularly when it was a simple, straightforward estate that had to be settled.
 
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