Some steps in the Estate Administration Process
While it is often the case that an Estate Trustee may be very familiar with the deceased’s financial affairs, it also may be the case that the person appointed or seeking to be appointed as an Estate Trustee may be a distant relative or someone who does not possess an intimate understanding of the deceased’s assets.
This article provides a basic list of items that an Estate Trustee may look into in navigating their role as an Estate Trustee:
1. Locate Assets
A general recommendation would be to start with a search at the deceased’s place of residence. This includes accessing deceased’s personal papers, financial records and tax filings. Common sense suggests that for an individual who maintained a strong online presence, the electronic devices, websites and platforms would need to be explored and reviewed. This will provide information about various accounts and assets the deceased owned. Note that if the deceased did not maintain up to date passwords log, there can be difficulties in accessing websites and information required for the administration to continue.
Once this search is complete, it is necessary to look outside the deceased’s residence. Even when an estate trustee claims full knowledge of the deceased’s financial affairs, it is a good idea to make inquiries with banks and other institutions in the area where the deceased lived. The inquiry would relate to whether the deceased had any personal or investment accounts or any other assets with the institution including any safety deposit boxes. Local brokerage firms should be written to if the deceased had investment assets.
2. Secure Assets
Was cash found at the deceased’s premises? Did the deceased leave behind valuable items such as jewelry that needs to be secured? If so, such items should be gathered and deposited in a safe place. Is the property a rental property? If so, arrangement must be made to collect rent and take over other matters related to running the same.
The Estate Trustee should complete a thorough inventory of all the assets and include things considered to be personal items of the deceased. Items such as jewelry and other household goods may require a valuation and may require more attention and should be held for safekeeping prior to any distribution to beneficiaries. Written records, photo and video evidence of contents will help with any claims from beneficiaries.
For certain items such as cash or payments collected, the Estate Trustee should inquire whether a bank will allow an Estate Trustee to deposit into an account opened for the estate. If the deceased owned real estate, the property must be secured and insured. If the property is vacant, the insurance company should be notified and coverage should be arranged accordingly. The message is to treat the property as if it was your own and take care of the assets in your possession. If a beneficiary is occupying the property, a clear understanding should exist in terms of that individual’s repair and rent obligations, if any. Speak to a lawyer for additional input. Key is to avoid disputes and conflict if there are additional beneficiaries who may feel unfairly treated.
Now that you have a complete list of assets the deceased owned and they are secured, it is important to have them valued. This will be necessary for both tax filings under the Income Tax Act along with detailed reporting requirements imposed on personal representatives in order to file an Estate Information Return. This may apply to stocks and bonds, real estate (personal) or investment use, shares in corporations along with personal items.
The list above is just a starting point for administration of an estate. It is important to protect yourself from liability and ensure that assets are being safeguarded and accounted for in the right manner. Our office provides services to executors, administrators, estate trustees and guides them through this process. Contact your Estate Administration Expert for assistance.