Estate Executor Duties

The Executor of an Estate (an Individual or Trust Company), must obtain a copy of the Last Will and Testament of the Deceased immediately after the death of the Testator, if they are not in possession of the Will already.

The executor duties are to ensure that the Testator's immediate wishes after his/her death are properly executed. If no such instructions are left, the Executor may consult with the immediate Family.

You must obtain a Death Certificate from the Funeral Home Director. The Death Certificate is a necessary document to prove the death of the Testator.



Duties of an Executor of a Will - The Will must be carefully read in order to determine certain aspects such as:

* notice to heirs and next of kin
* security of property and other goods
* assessment of cash needs for administration of Estate
* steps to be taken to meet the immediate financial needs of dependents - assets are immediately frozen until the Grant of Letters Probate is received. For immediate funds one should turn to any assets that pass outside of the estate which are not frozen such as joint bank accounts, properties held in joint tenancy or assets passing to a designated beneficiary.

If the deceased had a life insurance policy the designated beneficiary can immediately apply to have the benefits of the insurance policy paid directly to that beneficiary. Consult with a lawyer on these steps.

If there are no funds immediately available and the banks are unwilling to make alternate arrangements to help the survivors, the executor may have to arrange a loan for the survivor until the estate assets can be distributed.

The Executor is responsible for filing the Income Tax Return(s) for the Testator, including any assets that must be sold and become taxable after the Death. Payment of any income taxes owing are paid by the estate.

The deceased's capital gains or losses as of the date of death must be determined. If the surviving spouse or spouse trust receives the entire estate, it is possible that no capital gains tax will be payable until that spouse dies.

It is imperative that all debts, fees, services and incomes taxes be paid prior to distribution of the proceeds of the Estate to the Beneficiaries.

The executor's duties are to arrange the Funeral, take possession of all documents to ascertain assets and liabilities, take interim possession of all property, have the Estate Probated, if necessary, pay all debts and distribute the property and all other assets of the Estate to all Beneficiaries in a timely fashion.

Consult with a lawyer. This may be the lawyer who drew up the Will; otherwise it may be necessary for the executor to retain a lawyer.

The duty of executor is to prepare a complete list of all the assets and liabilities as well as their value at the time of death including cash, securities, jewelry, real estate and other valuables such as contents of safety deposit boxes.

Request that the estate lawyer search the title to all real estate in which the deceased had an interest. Determine the value any real estate, such as cottage property, farm, commercial, or investment property; this might entail hiring a Real Estate Appraiser. Check leases, mortgages and taxes. You will be responsible for payment of all mortgages, taxes, utility bills, etc. until the property is sold, including realtor and legal fees related to sale of property. Provide for continuing management and insurance of investment properties.

Notify all relevant financial institutions about the death and obtain statements about cash balances on deposit and loans outstanding. In most instances these institutions will require a copy of the Death Certificate along with a copy of the Will.

Only assets and liabilities that make up the estate must be listed. Assets that pass outside of the estate by right of survivorship under joint tenancy or designation of a beneficiary do not have to be listed. You are responsible at all times to account for the estate assets.

Executor Duties: You are responsible for the protection of all assets under the Estate including real estate. This includes theft, fire, loss and any other destruction. If you fail to preserve the assets you can be held liable. One way to protect the assets of the estate is to take them into your possession. This should be done with any valuable assets including important documents. Secured storage and or insurance for these assets are recommended. If the deceased owned a business you must arrange for continued, proper management as well as review any investments and collect any income from such items as stocks, bonds, rents or other investments.

It is recommended that an Executor hire legal counsel, however, if the estate is relatively simple and the Executor has some past experience and feels he/she does not need to probate the estate, then it may not be necessary to hire a lawyer. One can obtain books on how to avoid probate and how to execute an estate.

If it is felt the Estate is too complicated to handle, it is recommend that the Executor obtain legal counsel for:

* advice on Executor duties
* opinions about the meaning of the Will
* advice and execution of means to locate a Will, if there is no apparent Will
* drafting legal documents ie. deeds and other conveyance documents
* probating the Will, if necessary - the sooner the Will is probated the sooner you have legal access to distribute the estate. Applying for probate includes completing a number of documents to be filed with the courts.
* preparing documentation with regard to distribution of the Estate

All reasonable legal fees are paid by the Estate.

Executor Fees in United States and Canada:

All of this should be explained to you by the attorney, but for information purposes I have included this information.

I have shown the allowable executor fees for California, Florida and Ontario, Canada as a reference. For other states do a Google Search for - Probate Codes and add your State name to refine the Google Search.

The Executor Compensation information below is a guideline only.

California:

(1) Four percent on the first one hundred thousand dollars ($100,000).
(2) Three percent on the next one hundred thousand dollars ($100,000).
(3) Two percent on the next eight hundred thousand dollars ($800,000).
(4) One percent on the next nine million dollars ($9,000,000).
(5) One-half of one percent on the next fifteen million dollars ($15,000,000).
(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.
Source: Probate Code California.

Florida:

(a) At the rate of 3 percent for the first $1 million.
(b) At the rate of 2.5 percent for all above $1 million and not exceeding $5 million.
(c) At the rate of 2 percent for all above $5 million and not exceeding $10 million.
(d) At the rate of 1.5 percent for all above $10 million.
Source: The 2008 Florida Statutes

Ontario, Canada: Guideline only ~

The guideline applies percentages to various categories of the Estate receipts and payments and is expressed as follows:

* 2 ½ % of the total value of capital receipts of the Estate.
* 2 ½ % of the total capital disbursements of the Estate.
* 2 ½ % of the total revenue receipts of the Estate.
* 2 ½ % of the total of revenue disbursements of the Estate.
* Annual fee of 2/5 of 1% of the average annual market value of the capital of the Estate.
Source: An Overview of Estate Executor's Fees in Ontario.

The government in Canada pays CPP Survivor Benefits to a Deceased Contributor's Estate which is a one-time payment to, or on behalf of, the Estate of a Deceased Canada Pension Plan contributor. You will need to obtain the necessary forms and include the Death Certificate to apply. This must be done within 12 months of the death.

The survivor's pension is a monthly pension paid to the surviving spouse or common-law partner of a Deceased contributor and the children's benefit is a monthly benefit for dependent children of a Deceased contributor. Once again a Death Certificate will need to be remitted.

'Advertise for Creditors' in the local newspaper, where the Deceased resided and/or did business, announcing the Death and leaving an invitation for all those who feel they have a claim on the Estate to contact the Executor and send their claims to you for settlement. It is very important to advertise for creditors to legally protect yourself, as the Executor, from becoming personally liable for future claims. This only protects you as the Executor, and the Beneficiaries can still be held liable.

Executor Compensation:

Executors can determine the estate executor payment they are likely to receive. The courts in estate matters have developed a scale, based on the value of property in the estate for the executor's fee:

2.5% on capital receipts
2.5% on capital disbursements
2.5% on revenue receipts

An annual care and management fee of 2/5 of 1% on the gross value of the estate (i.e. where the gross value of the estate is $200,000, the annual compensation would be $800), if the estate is not distributed immediately.