Duties of an Executor and Solicitor in winding up of Estate.
When a person dies, someone must be responsible for gathering in all of the deceased’s property and effects, for clearing up the legal problems which arise, for making sure that all debts, duties and taxes are paid, and for dividing the estate among the persons entitled.
Where the deceased leaves a will appointing an Executor, the Executor will bear this responsibility, but where the deceased died without leaving a will, someone must be appointed by the Court to carry out the above duties and such person is called the Executor Dative.
Duties of an Executor.
Contrary to what many people think the solicitor is not in charge of the estate – the Executor is in charge. The solicitor is merely there to perform the specific legal functions and to provide advice. The Executor’s responsibilities are:
Funeral:
- Make the necessary funeral arrangements.
Will and Notify Beneficiaries:
- Locate the last Will.
- Retain estate solicitors.
- Notify the beneficiaries of their bequests.
Immediate Needs:
- Consider the immediate financial needs of the family.
- Properly maintain, protect and insure all estate property.
Assets:
- Locate and be responsible for the assets until they are sold or disposed of. For example, if there is a house the Executor must ensure that the insurance is adequate, that the property is reasonably protected, and if it is going to stand empty during the winter that there is no burst pipes.
- In the case of an ongoing business, the Executor must arrange for continuing management of the business.
Confirmation:
- Arrange for the listing of the contents of any safety deposit box and deliver the listing to the estate solicitor.
- Prepare a thorough inventory of all the assets of the estate, including a valuation of each asset, and supply this inventory and valuation to the estate solicitor for the purpose of preparing the necessary application for a Certificate of Confirmation in favour of the Executor by the Court.
- Instruct the estate solicitor to prepare the application for the above Certificate.
- Advise all banks of your appointment as Executor when appointed.
Deceased’s Affairs:
- Cancel subscriptions, credit cards and memberships of the deceased, and advise all sources of income (for example, pension plans, trust companies, etc.) of the death.
- Apply for any Pension Plan benefits, if applicable.
- Obtain particulars of life insurance policies and obtain and file applications for the death benefit.
- Ascertain all debts and liabilities of the deceased and pay all proper debts.
- Arrange for the opening of an estate bank account and keep accurate records of all principal and interest received, and amounts expended.
- Pay legal fees and funeral expenses.
Realisation and Distribution of Estate:
- Realise or sell property if funds are needed for the payment of debts and legacies.
- Establish any trust funds as directed by the will.
- Prepare any documents necessary to transfer the assets, either to the named beneficiary or to the estate for the purpose of distribution. This includes withdrawing cash balances from deposit accounts, transferring securities, collecting life insurance proceeds, conveying heritable property, selling or winding-up a private business, and collecting income from investments.
- Distribute the residue of the estate to the proper beneficiaries after the estate accounts have been approved by either a Judge or the estate beneficiaries.
Income Tax:
- Assist the solicitor in settling valuation problems with tax authorities including supplying any further information required concerning the estate and the assets.
- Prepare and file an income tax return for the broken portion of the year of death.
- Prepare and file estate income tax return covering any period after the date of death.
- Arrange for any necessary funds to pay the income taxes arising from those returns.
Accounts and Compensation:
- Maintain and complete a precise accounting of all money received and assets under the control of the Estate Trustee, and of all money spent and assets disposed of, with a breakdown showing that the Estate Trustee has complied with the provisions of the will and how much each of the residuary beneficiaries is entitled to receive.
It is the common experience of most solicitors that Executors expect and require the solicitor to do a substantial portion of the administrative work, for example, ascertaining and obtaining valuations of the assets of the estate; selling or transferring the assets; receiving and disbursing funds; negotiating with creditors, tenants, etc.; paying outstanding debts; completing income tax returns; and frequently completing the statement of accounts, calculation of distribution, etc.
Solicitor’s Duties
When the Executor has completed an inventory and valuation of the assets of the deceased, the solicitor prepares the application to the Court for the Certificate of Confirmation of the Executor.
When the Certificate has been obtained, the Executor or the solicitor is in a position to administer the assets and pay the debts.
The solicitor, on the instructions of the Executor, will then complete all the necessary papers for transferring or liquidating the assets.
When all debts and legacies have been paid, the Solicitor will prepare a statement known as an Account of Charge and Discharge of his accounts showing all receipts and disbursements, what remains after all the payments have been made and the distribution of the residue among the residuary beneficiaries. The solicitor will prepare releases to be signed by the beneficiaries.
In all cases we invite Executor to discuss the matter of fees. After receiving instructions and identifying the size of the estate and the type of assets in it, we will be pleased to provide an estimate of our fees.