It is no wonder there is confusion around executors, estates and probate. No one wants to consider their own demise so discussions tend to be avoided. Death, however, is a certainty, and with this in mind you need the basics in place to protect your loved ones. This month, Elder Voice has invited Gregg Medwid, owner of Executor Support, to explain what an executor does and provide an introduction to probate.
An executor carries out your final wishes as detailed in your will. When there is uncertainty, your executor plays a part in sorting through the details and in essence, does their best to act as you would in distributing your assets within the confines of the law. Without a will, an administrator is selected. This individual manages the estate similarly to an executor; however, the absence of a will can make for a much more involved process.
While an executor may or may not be a beneficiary, it is essential that the person you assign is responsible, organized and a good communicator. Communication plays a key role as managing an estate can be complex and an executor must keep the family and other beneficiaries informed at all points.
Among their first tasks, the executor arranges a funeral and informs others of the death. Informing extends beyond friends and loved-ones to organizations such as government agencies, banks, etc.
The executor must also complete the very detailed task of settling the estate. This begins with cataloguing all assets and liabilities and determining what items form part of the estate and what passes directly to a beneficiary. Assets with an assigned beneficiary (RRSPs, insurance products, etc.) will avoid going through probate which is another reason why pre-planning will benefit your family.
Because the process of taking inventory of assets, settling debts, and liquidating the estate can be complex and take a long time, detailed financial records must be kept for all amounts flowing into and out of the estate. Additionally, the final tax return must be prepared and submitted by the executor, as well as possibly a tax return for the estate itself.
Probate certainly has its myths and uncertainty. Most people have heard of probate, but have little understanding of what it is or how it works. A Grant of Probate is official confirmation given by the court that the will is the last valid will, and the person named as executor is the proper person to settle the estate. Probate is not a government requirement, nor is it even required in every estate. Rather, probate is required by certain agencies or financial institutions in order to give these 3rd parties comfort when transferring assets into the name of the executor. For instance, the Land Title Office requires probate in order to transfer the title to a home from the name of the deceased into the name of the executor. Financial institutions and the Motor Vehicle Branch are other examples of 3rd parties who ordinarily require probate.
For estates worth more than $25,000, probate is usually required, and the process includes submitting special forms and the original will to the Probate Registry of the Supreme Court. Probate filing documents can be prepared by the executor (a kit is available in many office supply stores) or by a lawyer, and must include the list of assets and liabilities with values. The fee to file is $200 and the probate fee itself is approximately 1.4% of the value of assets within the estate. Within the Lower Mainland, there are probate registries in Vancouver, New Westminster and Chilliwack, with others around the province.
Generally the courts will process the application within 2 to 3 months granting the executor the authority necessary to finalize details of the estate.
Obviously the process can be time-consuming and up to 5% of the value of the estate is available for the executor for their service, however, it is important to note that this money comes out of the estate and will reduce the asset value available to beneficiaries.
Mortality is far from a fun topic, but planning and preparation will make things easier for your executor and loved ones. No one has yet figured out how to live forever, so take the time now to ensure your estate is in order.
Executor Support manages for or assists executors and administrators with settling estates. Gregg Medwed is owner and president. He can be contacted at email@example.com 604-999-2106.
This article is in no way intended to substitute for competent legal advice.