What you should know before you agree to be an Estate Trustee

Jon Quaglia Wills & Estate

In Ontario, an Estate Trustee is the term to describe executors (people who ‘execute’ the deceased wishes set out in their Will), administrators (people who administer the estate of someone who passes without a Will according to intestacy rules), and trustees (people who carry out the trusts that may be in the Will). So, in short, an Estate Trustee takes care of the final duties (financial etc.) of a person who has passed.

1. Your Responsibilities

An Estate Trustee is a very important job that may seem overwhelming, but there are just five things to keep in mind:

  1. Obey the directions of the Will
  2. Act impartially between beneficiaries
  3. Exercise ordinary care and prudence in securing assets and paying debts
  4. Place the duties of the trust before your own interest
  5. Be ready to account

Ensure that all these duties are followed to the absolute best of your ability. Failure to do so may make the Trustee personally liable for breach of trust.

2. What’s Involved in an Estate

Manage the Physical Estate Inventory

The Trustee must look into and secure all aspects of the Estate as soon as they possibly can. This includes examining any pertinent documents and papers, as well as ensuring the safety of all assets such as vehicles and the home itself. Keep in mind that for these assets, the Trustee is liable for Estate Administration Tax, or “probate fee”, so ensure you receive an appraisal for them.

Manage the Estate Accounting

One of the first things a Trustee must do is establish a separate bank account for the Estate they are managing. The bank will require a good deal of documents, a notarial Copy of the Certificate of Appointment, photo ID, and a signature card in order to set this up. In some complicated estates, our law firm is able to act as the ‘bank’ for the Estate instead. This makes it much easier for us to assist in keeping track of any transactions that may occur. Keep in mind, the Estate Trustee will at all times be responsible for any money coming in or out of the account.

Timeline

The Trustee is, in most cases, allowed one year from the date of the passing of the deceased to organize all the assets and prepare a plan to distribute them. No beneficiary can ask for an earlier timeline.

3. Distribution of the Estate

Debts and Taxes

Firstly, the Trustee needs to ensure any creditors of the deceased are paid. If there is enough money in the account to pay the creditors, the Trustee is personally liable to see that they are paid. In some cases, there can be a partial distribution made to any beneficiaries in the Will, but only in the case of there being enough money held back for the Trustee to pay the creditors.

Beneficiaries

The distributions that the Trustee gives to the Beneficiaries are called legacies. The Trustee can only pay them out once they are satisfied there will be no complaints or disputes regarding them. It is recommended they be paid out as soon as possible after the date of death. This avoids any claims of interest on the legacies. Before doing this, however, the Trustee should provide an accounting to the Beneficiaries that shows the record of all the money in and out of the account and have them sign a Release that confirms that they are happy with the accounting.

This entire process can be difficult and stressful. Quaglia Law is here to offer any help and advice that may be needed in order to ensure it goes as smoothly as possible for all parties involved.