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Sunday, December 18, 2011

Executor vs spouse: who does what?

When a family member passes away, which duties fall to the executor named in the will, and which fall to the deceased's spouse? It's not always clear-cut, especially when assets go to the surviving spouse by right of survivorship. The following question from a reader is typical of what many people go through when someone passes away, and I think it may look familiar to many of you.

Here's the question:

"My sister has passed and her daughter is executor of her will. My sister leaves behind a spouse (married 25+ years). My sister had no assets in her name; only joint with her husband (house, cars). My niece is checking bank accounts, cancelling any and all bills in my sister's name - wouldn't that fall upon the surviving spouse? All bills (phone, cable, etc.) that are in my sister's name - is it not the responsibility of her living spouse to change that? What about tax returns? My sister's husband has indicated that he will not provide any information pertaining to tax issues to my niece. Is it my neice's responsibility as executor to make sure the taxes get done? Or the living spouse since all my sister's estate (pension, bank accounts) went to her living spouse? Is my niece doing to much? Once the funeral is done she can walk away since the living spouse is automatically responsible for any outstanding bills?"

No, I don't believe your niece is doing too much. In fact, I commend her on doing a thorough job. Your niece is responsible for taking care of anything that is in your sister's name alone, but how can she do that without making enquiries to find out what's actually in your sister's name? Should she be checking accounts and bills to see what's in your sister's name? Yes. Should she be cancelling bills that are in your sister's name? Yes.  Should she make sure that tax returns are done? Absolutely.

It sounds as if the spouse perhaps feels that his privacy is being invaded, but your sister made her choice of executor and that is legally binding. The spouse will have to share tax information if the executor can't find it any other way. He needs to realize that the executor has the right to communicate with Canada Revenue Agency as well as anyone who supplies T slips to your sister and can get as much information as she wants that way. She's doing as your sister asked her to do.

When it comes to joint assets such as the house and bank accounts, the executor should first of all determine that it is in fact a joint asset. This might involve title searches at the Land Titles Office, meetings with bankers, etc. Once she knows for sure that it is a joint asset, all she has to do is advise the beneficiary (in this case the spouse) and provide him with any paperwork, such as a copy of the death certificate or will, so that he can take steps to change the asset to his own name. She doesn't have to sign papers or file documents herself. If there are any assets that are not jointly owned, the executor must take care of them as set out in the will.

Your last sentence about the spouse automatically being responsible for outstanding bills is something I hear a lot, but is not correct. The spouse is only responsible for bills that were in joint names and were not life insured. The spouse is NOT responsible for any bills that were in your sister's name alone (for example a credit card).

I hope your family members will come to appreciate that your niece is doing her best to do the job she was left by her mother's will. If the executor and the spouse are able to work together and discuss who is doing what, that will certainly help both of them finalize this estate with the least amount of upset to both.

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