NOTES FOR THE ASSISTANCE OF THE PERSONAL REPRESENTATIVE OF A DECEASED PERSON
The following notes are intended to assist you in performance of your responsibilities as the Executor (if there is a Will) or Administrator (if there is no Will) of a deceased person. Please note that this is a general outline only and we, as solicitors, will be able to provide you with answers and solutions to specific questions and problems which will arise.
NEW ESTATE ACT TERMINOLOGY
DUTY OF A PERSONAL REPRESENTATIVE
BUSINESS AFFAIRS OF DECEASED
DEFERRAL OF RESPONSIBILITIES
As personal representative you must also attend to the general protection of any residence of the deceased including the locking of the premises and maintenance of adequate heat and insurance. If there are children of the deceased and both parents are deceased you must normally attend to the welfare of the children.
ADMINISTRATION OF THE ESTATE
COMPENSATION OF THE PERSONAL REPRESENTATIVE
LEGAL FEES AND DISBURSEMENTS
Disbursements of the estate can be extensive. Estate tax on the first $50,000.00 of Probate value fees are payable in the amount of $5.00 per $1,000.00 and thereafter tax is payable at the rate of $15.00 per $1,000.00. Unfortunately HST is also payable on our fees and certain non-exempt disbursements. We will endeavour to provide as much information as possible on the initial interview.
Finally, we feel these notes would be incomplete if we did not impress upon you the high and rather complex degree of care imposed by law on an executor. You will be at all times completely personally accountable to the Superior Court Judge, and to the beneficiaries, for your handling of the estate assets, for keeping proper financial records and distribution of the assets, as well as being potentially personally liable for any failure to pay proper debts of the deceased to creditors such as, for instance, Revenue Canada, or for failure to properly distribute the assets of the deceased.
ESTATE TAX ADMINISTRATION ACT AND CHANGES EFFECTIVE JANUARY 1, 2013
The Ontario Government has always collected revenues from the administration of Estates of deceased persons where the Will required submission to Probate (Application for Estate Trustee Certificate). The incidence of this tax is generally .5 to 1.5 % of the value of the KMH | LAWYERS
Estate and the Estate Administration Tax Act (EATA) defines which properties and their respective values are subject to this tax.
There are generally accepted methods of avoidance but, where such is not possible, as of January 1, 2013 the onus on the Executor/Administrator/Estate Trustee of a Will to ensure compliance is dramatically increased. On that date, the responsibility for collecting the EAT shifts to the Ministry of Revenue Ontario from the Ministry of the Attorney General and reporting to that Ministry will be subject to it’s significant audit, verification and assessment powers.
The implications of this change for Estate Trustees include:
- More financial disclosure required.
- More form filling.
- More lengthy record keeping.
Professional appraisals and expert evaluations will become the prudent practice.
Reserve for assessments and re-assessments will be recommended.
- Beneficiaries will have to be informed of the possibility that the Ministry, having broad audit powers, may very well subject them to investigation.
Estate Trustees may be wise to purchase administration insurance.
Whatever the other possible implications may be, one certainty is that this change will only serve to further delay the already protracted process of Estate administration and lead to greater associated costs.
We trust the foregoing will be of assistance to you and will be pleased to answer any specific questions you may have.
(Source:)For all matters in relation to estates, wills and/or estate planning please see any of the following lawyers: Edward G. Manthorp Sean B. Kelly Elisha M. E. Kelly