There are quite a number of duties for the Executor of an estate. They can include funeral arrangements, although this is usually handled by the family. The Executor is responsible for locating and reading the will, identifying and preserving all assets, notifying beneficiaries, keeping a list of assets and debts, filing income tax returns, paying debts, and distributing the assets.
Certificate of Appointment
One of the first things that needs to happen is the issuing a Certificate of Appointment (formerly called probate) by the Superior Court of Justice. If there is a Will, the executor applies for the Certificate. This Certificate is necessary to transfer title to real property and if financial institutions require it.
Estate Administration Tax is levied on the value of the assets covered by the Will. Currently that tax is 0.5% on the first $50,000 and 1.5% on the balance. There is a tax strategy that involves the use of two Wills. Tax is due on only the first Will. Please refer to that section in this article for more details.
If there is no Will, there is another Certificate of Appointment specific to those circumstances.
Payment of Debts
The Executor is responsible to pay all legal debts of the deceased. It is important to publish a public notice for claims to protect the Executor from personal liability.
If there are any unfiled tax returns for the decedent, the Executor must file those within six months of the date of death. There is also a final income tax return due April 30 following the date of death or six months from the date of death, whichever is later. The estate can also earn income and a T3 return is required for that.
An Estate Information Return must be filed with the Ontario Ministry of Finance by anyone who is an Estate Trustee. This is a regulation as of January 1, 2015. the return must be filed within 90 days of the Certificate issuance.
Sometimes the Executor’s fee is set out in the Will. If not, the following guideline is used:
> 2.5% of capital receipts
> 2.5% of capital disbursements
> 2.5% of revenue receipts
> 2.5% of revenue disbursements
> 0.4% of the average value of the capital of the estate