Will Estates

1. Do you want to be buried? Cremated? A service? Where? Who should be notified? Often some of this information is included in the Will. It is better to put it down on a sheet of paper in with ‘Important Papers File”. You can save a lot of indecision by writing your intentions. No one can ask for clarification afterwards.
2. Generally all accounts held solely by the deceased are frozen until probate or letter of administration are obtained. You can alleviate this by having joint accounts with a spouse or child. Also, by holding assets in joint tenancy or giving away some of your estate prior to death, you avoid taxes.
3. To help your executor locate all your assets, make a list: properties, credit cards, bank accounts, stocks, bonds, mutual funds, RRSP’s, pension plans, life insurance policies. Let your executor know where you will is kept.
4. Your son/daughter may have turned out not to your liking, but be careful when you cut them out completely! The Wills Variation Act allows someone to dispute your wishes. . That is another reason to have a qualified lawyer/notary to assist you in drafting your will.
5. All real estate except your principal residence may be subject to income tax on its gain since time of purchase.[ approximately 25% of the gain] For example, the summer cottage or the shares bought 20-30 years ago…time to pay. Life Insurance can save the day. It provides a known sum of money at an unknown time and transfers the risk of when to pay on to the insurance company. It is the cash sent tax free that allows the other assets, such as the family summer cottage, or a valuable investment property to be passed to the next generation.

If your estate will have taxes to pay, consider using Life Insurance to fund the debt. A “Joint last to Die” or Single Life plan can very effectively guarantee cash when it is needed to pay CCRA. Guarantee Money to help pay for a Grandchild’s education. Create a Scholarship at a College or University. Help a hospital pay for new equipment If you have not yet made a will, do it now. If your will was drawn up a long time ago, it should be reviewed. One of the most famous cases of dying intestate (without a will): Howard Hughes. This was a man with billions of dollars, but no valid will. It took years to settle his estate with millions in expenses: The Governments of Texas, California, and Nevada all fought for the right of taxation. Much of this mess and expense could have been avoided .

Duties of an Executor Have you been asked to be an executor? Have you asked someone to be your executor? You'll want to know what this requires in the way of duties. The process takes some time but it is a step by step procedure Taken one thing at a time, it is a manageable task. Realize that it has been done millions of times before by others who were often more confused than you. They got through it, but you could make your job easier by knowing what to do.

 

What to do…

After a death, there are a lot of details to be dealt with, some immediately and some at a more measured pace:

1. Burial Arrangements: The final arrangements…service? Cremation? Notice in the paper; an obituary to write. A funeral home can help with the details, but it is a good idea to outline wishes ahead of time.
2. Where will the money come from to pay the bills? Generally all accounts held solely by the deceased are frozen until probate or letters of administration are obtained. A bank will usually transfer up to $10,000 into an “estate account” to allow payment for funeral expenses etc. Life Insurance policies with a named beneficiary can be paid without probate. The insurance company will provide forms. Usually payment is processed quickly, unless the policy has been in force for less than two years. Then the company may, at its discretion, investigate further to determine if any misrepresentation occurred.
3. Will Search: An executor must confirm that the current Will is valid. A Search of Wills notice is sent to Vital Statistics in Victoria, unless you're positive that you have the valid document.
4. Death Certificate: The doctor who attends and the Funeral Director can issue this certificate. Ask for six or seven certified true copies. You will need them; everyone you deal with will want a copy to confirm the death and allow them to act. HINT: When presenting this or other notarized copies in person, ask the recipient to make their own copy, thus saving you from having to get more copies.
5. Find all the documents: this is where an organized estate really saves the executor time. The affairs of the deceased need to be closed down. Cancel all credit cards. Find the bank accounts, mutual funds, RRSP's, property, pension plans. All must be notified and dealt with. Apply for probate as executor: Probate is in effect ‘proving the will'. It is the court's/government's process of validating the documents and allowing the estate to be distributed. It is a step by step process:

•  Notify Beneficiaries: You must certify that a copy of the will is sent to everyone who is a beneficiary: spouse, children, common law spouse, brothers and sisters, even if not named. This allows anyone who feels they should be entitled to a share to dispute the will if they feel unduly disinherited. .

•  Affidavit of Notice/Executor: You must submit a notarized declaration that you have notified all interested parties to the will. Next you must also submit an affidavit of Executor. This confirms that you have completed all the duties required.

•  Pay the Tax: As an list attached to your request for probate, a Statement of Assets and Liabilities must be prepared. This will enable the Province to apply its fee. All property must be listed on this form: land (the most recent Notice of Assessment comes in handy). The full legal description and appraised value of the property on the Assessment notice will satisfy the people processing the probate application. Don't forget to list bank accounts; cars, boats, planes, CSB's, Stocks, even the CPP Death benefit Before this process is approved, be prepared to pay the fee. On any estate of over $200,000, consider it 1.4%: a nice final “kiss” from Victoria to process the paper work. If you make an error and overpay, there are no refunds.

•  Obtain Letters Probate: Finally, the paper processors at the Probate Office will, when in receipt of a cheque (large or small, they don't care!) release to you the Grant of Letters Probate. With this in hand you may now officially act to wind up the estate: sell any property, redeem investments.

•  Income tax: Before the estate can be distributed, there is more bureaucracy to be served: Canada Customs & Revenue Agency (CCRA). As executor, you must file a Terminal Tax Return for one final accounting. At this point, Capital Gains Tax problems must be dealt with . After the tax returns are processed and any money owed is paid You will receive a notice of assessment with a zero balance., It is advisable to then obtain a Clearance Certificate from CCRA. This officially closes the file as far as they are concerned. You now can distribute the estate without CCRA coming back after all the assets are distributed saying: “Wait. We want more.” As Executor you are the one who is liable!

You may now transfer the property according to the will, barring any disputes from persons making a claim under the Will's Variation Act.

This is just a condensed version of the duties of an executor. Some people will have a lawyer do the work; others will do it themselves. Self Counsel Press sells a Probate Guide with the necessary forms.

I recommend you read the book so you can decide whether to pay a Lawyer or notary to handle it or do it yourself. One lawyer I know charges $225 an hour others do it for a flat percentage .. either way It can add up to a lot of $.