How can an executor stay involved while the lawyer processes the paperwork?

Some executors or administrators of estates will hire a lawyer and ask that the lawyer take care of the entire estate from A to Z. More commonly though, executors and administrators want to be more involved than that. They want to keep costs low, keep the estate file moving along, and maintain control of the estate. Recently a reader in exactly that situation wrote to me, and I'm sharing the answer here.

"My father recently passed away and unfortunately does not have a will. I am trying to wrap my head around what exactly I need to do to get things straightened out. I've spoken to a lawyer and he has outlined what is required and I do need to give him some more information so that he can start the necessary process but if I am able to do some thing(s) myself, then by all means I am willing to tackle them."

There is a lot of opportunity for an executor (or, as in this case, an administrator) to take on tasks to keep legal costs low and to keep the estate file moving as efficiently as possible.

During the initial stage of the file, the lawyer will be gathering information to put together an inventory of assets and debts, as well as a list of beneficiaries and family members. You can supply a list of names, addresses and birth dates, and call around to family members to come up with information that might be missing.

You can also go through your father's house to find paperwork such as bank statements, investment statements, insurance policies, title deeds, property tax assessments, pink slips for vehicles, credit cards and bills of sale. All of these items contain vital information such as account numbers that will save the lawyer a lot of time. You can save even more time and money if you are able to go to the banks yourself to get updated statements (that isn't always possible for administrators, but it is for executors).

If there is a house, cabin or land to be sold or transferred to a beneficiary, you can save time and money by arranging to get appraisals. I recommend that you get at least two for each piece of property.

Once the lawyer interprets the law for you so that you know who is going to be a beneficiary under the intestacy laws of your province, you should notify them of what's going on. Once you have the grant of administration, you may wish to set up a day for everyone to get together and divide up the personal and household items.

Your lawyer may ask you whether you want to open an executor/administrator's bank account or have him run everything through his trust account. You can do it either way, but it's cheaper to do this yourself, unless there are beneficiaries who don't trust you to handle the funds. As an administrator (rather than executor) you won't be able to open the bank account until the court has issued you the letters of administration.

When it comes time to prepare an accounting to the beneficiaries, the lawyer should draft the Release documents. But you can save a lot of money if you prepare the statements yourself. Please understand though that you have to prepare a proper accounting that deals with all payments into the estate and payments out. If you prepare something inadequate or misleading and it ends up in court, you won't have saved any money or any time.

If you would like more of a step-by-step guide, pick up my book called Alberta Probate and Administration Kit. Even though the majority of the forms in it are for Alberta, there are also executor's accounting forms that can be used anywhere in Canada, and plenty of information, tips and ideas that apply to executors and administrators across the country.

Which assets does an executor deal with and which are outside of the estate?

This reader has questions about the powers and responsibilities of an executor and trustee, and which assets fall within their control. This information is essential to the estate administration process, so I thought I'd cover it here for all to read.

Here's the question:

"When an estate is probated do all assets fall under the probate or can some things be dealt with before hand such as banks, life insurance and investments and if something needs to be done through probate can we proceed at that time? If the executrix/trustee is not a joint tenant of the house, who is responsible for selling the house? Would it be the joint tenant or the trustee?"

Parts of this question are quite clear to me, though I'm not sure I understand the part about dealing with assets "before hand". I'll get to that, though.

All assets owned solely by the deceased fall into the estate. The two types of property that don't fall into an estate are both mentioned in the reader's question. One type is an asset that is jointly owned by the deceased with someone else. The other type is an asset with a designated beneficiary. These are usually life insurance policies, RRSPs, RRIFs and pensions.

Note that this does not include RESPs, which do not go to the child named in the plan, but stay in the deceased's estate.

If the house was owned by the deceased and a joint tenant, on the death of the deceased the ownership passes to the other joint owner. It would be up to the other owner to arrange for the title to be changed. Please note that where the joint ownership is between generations, such as between a parent and a child, this is THE OPPOSITE. Joint title doesn't automatically go to the child joint owner when the parent dies. The child is deemed in law to be holding the title on trust for the estate, and it's for the executor to deal with.

If the house was not held in joint tenancy but was held just by the deceased alone, it becomes part of the estate and it's the executor's job to sell it or transfer it in accordance with the will. This cannot be done before probate is issued by the court.

I'd like to get into the part about dealing with assets before hand. If the question is whether any of the assets can go out to the beneficiaries before the deceased actually dies, the answer is no. To me that seems starkly obvious but I'm asked the question frequently enough to know that not everyone sees it that way. If the person hasn't died, keep your hands off their assets even if they have named you specifically as beneficiary.

Once the deceased has passed away, the executor should advise any joint owners of the death of the deceased and tell the joint owner it's up to them to change the title. The executor should advise life insurance companies of the death of the deceased, and let the insurance company deal directly with the person named as beneficiary in the policy. The executor should also advise the bank that holds the RRSP or RRIF and let the bank deal directly with the beneficiary who will receive the funds. The executor should co-operate by giving copies of the death certificate etc to allow these other parties to get on with the business at hand. Probate is not required for these transactions.

The deceased certainly can - and should - deal with these assets before death by naming the beneficiaries on the life insurance, RRSP etc. During the estate planning process, joint assets and beneficiary designations are part of the same big picture that includes the will and power of attorney. It all has to fit together.

Anyone with this type of question who lives in Alberta can check out my "Alberta Probate Kit" book, as it covers these topics in much more detail.

Amazon Alert: Alberta Probate Kit is now available to be ordered

Thanks for being so patient. Amazon advised me today that the Probate Kit is available for ordering. Click here to order.

Alberta Probate Kit is here!

I received my author's copies today, so you know what that means - they are being shipped to the stores as we speak! Click here to buy a copy from the publisher (available May 25). Click here if you want to get a copy from Amazon.ca when they receive their copies. Otherwise you'll be able to pick one up from Chapters stores soon.

Another update on Alberta Probate Kit

I received an email this morning from my editor, who says she has received the advance copies of the Alberta Probate Kit. This means the actual book; it's no longer just a manuscript! Now copies should be in the stores very soon. Thanks to all who have emailed, called or left me notes here on my blog to say they are patiently (or in some cases impatiently) waiting for the kit.

How to get started with probate

You're the executor. You're pretty sure that you're supposed to be probating the deceased's will. If you're like many people, you may find this project complex and maybe even overwhelming. Do you know where to start?

It's beyond the scope of a blog post to describe to you each and every step in the probate process, but in this post I'd like to point out some of the first steps you should take in order to get going with your court application for probate.

1.  Make sure that you have the original will, not a photocopy. It is always the most recent will that is probated, so check the dates if there is more than one.

2.  Get an original Funeral Director's Statement of Death and a government-issued Death Certificate.

3.  Decide whether you're going to do this probate application yourself, or whether you're going to hire a professional to help you. If you're hiring help, find a specialist. That can be either a trust company or a lawyer who specializes in wills and estates. Be realistic - if there's a dispute brewing, don't try to do this on your own.

4.  Spend a few hours in the deceased's home looking through his desk, filing cabinet etc. Look for (and keep) legal and financial documents including bank statements, investment statements, bank books, title deeds, child support orders, shareholders' agreements, vehicle pink slips, bills of sale, mortgage statements, share certificates, Canada Savings Bonds, pension statements, tax slips, tax returns from previous years, pay stubs, account numbers, insurance policies, contracts, etc. From these papers, you should be able to put together a basic picture of what you're dealing with in terms of assets and liabilities. You should also have a better idea of whether probate is even necessary.

5.  Make a list of everyone in the deceased's immediate family, with their addresses and birth dates. If there is anyone named as a beneficiary in the will who is not already on your list, add them.

6. If you are hiring a professional, take all of this material you've gathered to them.

7.  If you're doing the probate yourself, get a kit if possible. Links on this site will take you  to Ontario and BC probate kits, and soon the upcoming Alberta probate kit. Where no kits are available, get the forms from the Queen's Printer for your province or territory.

8.  Start with the inventory. I suggest this because you will have to make a lot of phone calls, send a lot of emails and visit a lot of offices to get the information you need. It's the most time-consuming and complex of the documents.

From there, you'll complete the forms you need and submit them to the court with the proper fee. This begins the probate process. While these instructions may seem very simple, any DIY executor knows that they are not. But now at least you know where to start.

Exciting news! Alberta Probate Kit is available for pre-order

I'm absolutely thrilled to let you know that the Alberta Probate Kit I wrote (my 4th book) is now available for pre-order at Amazon.ca. Click here. It's also listed at Chapters.indigo.ca but on that site they don't yet have a link for ordering. Hopefully they will soon. Here's the listing.

Those of you who have told me you're waiting for this kit before beginning an estate you're about to work on, thanks so much for your faith and your patience. You'll find that the tone of the book is very much like my blog posts, only I had the luxury of being able to go into more detail in the book and to give more examples. I'll be here to answer any questions you might have, though I did my best to make the kit as foolproof as possible.

Answering two Alberta-specific questions

Two different readers have recently asked me questions about things specifically relating to Alberta, so I'm answering them both here.

Firstly, the form you use to put a Notice to Creditors and Claimants in the newspaper (in Alberta only) is called Form NC34, and is found in the Surrogate Rules. I'm attaching a link here that you can follow to get the form. You'll have to scroll about halfway down; the forms are in numerical order.

Also make sure you read Rule 38 which governs how and when to publish the notice, as follows:

38(1)  If a personal representative publishes a notice to claimants, the personal representative must do so in accordance with this rule and may use Form NC 34.

(2)  A notice to claimants must be published in a newspaper

             (a)    that is published or circulated in the area where the deceased usually lived, or

             (b)    if the deceased did not usually live in Alberta, that is published or circulated in the area where a significant amount of the deceased’s property is situated.

(3)  A notice to claimants must be published,

            (a)    in the case of an estate with a gross value of $100 000 or less, at least once, or

            (b)    in the case of an estate with a gross value of more than $100 000, at least twice with 5 days or more between the publications.

AR 130/95 s38;135/96;165/2010

The second question was about how much a lawyer charges to file for probate in Alberta. The general rule set down about 15 years ago is that lawyers will charge $2,250 plus .5% of the estate where the estate is valued at no more than $150,000. Where the estate is valued at more than that, the lawyer will charge $2,250 plus 1% of the estate. This charge is for what are known as core legal services, or the services that are normally required on any estate, including applying for probate. If the lawyer does any of the work that is normally done by the executor (the non-core legal services), the lawyer will charge his or her usual hourly rate.

Not all lawyers follow this general guideline, nor is it required that they do. It's always a good idea to discuss fees and disbursements in the first meeting with any professional before you ask them to do any work for you.

(By the way, both of these questions and many others are covered in my upcoming book, the Alberta Probate Kit).

Frustrating quirk in Alberta probate application

I received a reader question that was posted on one of the threads but that I'd like to share with you. Reader... I understand your frustration!

"I have embarked on the road to DIY probate using the materials included in the Alberta Surrogate Court kit. My first application was returned, due in part to a couple of oversights on my part, but also for reasons not explained anywhere that I could find, which I found incredibly frustrating.
As both inheritor and executor I did not realize that not only did I have to fill out forms NC 19 and 20 for myself to notify myself that I am a beneficiary, I also had to write and sign an acknowledgement that I had received those forms. I was not given the proper wording for the acknowledgement and am now worried that if I don't do it correctly my next submission will also be returned. Since the application and pickup of materials must be done in person it gets to be time consuming and frustrating. I think it is really pitiful that the province provides a kit that is supposed to let the average Joe file for grant of probate, but does not give us the tools to do so. I hope your book will cover this. I have appreciated reading your website which is easy to navigate and very well written. "

In my book, I specifically addressed the issue of serving notice on yourself, which is one of those quirky little details that makes people crazy. The correct procedure is to prepare the NC19 and 20 notices (which by the way can sometimes be combined into one form), add the acknowledgement on the bottom, sign them, and include the originals in the application for probate. Notices served on other people are included in the affidavit of service but this special procedure is intended to avoid you having to serve documents on yourself.

The wording for the application is:
"I hereby acknowledge receipt of notice of the application for probate, including a full copy of the application, in the estate of ____, deceased."

If you've had your application for probate bounced back to you, insert the NC19/20 (with signed, dated acknowledgement on the bottom) into your original application, and re-submit it.

I think the kit provided by the province is intended only to be a compendium of forms, not necessarily a kit with any advice. This is one of the reasons I decided to do a kit for Alberta probate.The forms are not a lot of good without any instructions.

Progress report on Alberta Probate Kit

I get a number of emails asking when the Alberta Probate and Administration Kit will be available, so I thought I'd give a progress report. I've finished writing it (yay!). It's at the publishing company, being edited as we speak. We are still on target for a release of the kit in spring 2011. I'll let you know a more exact date as the information becomes available.

Writing this blog has actually been really helpful in putting that kit together. Seeing your questions and comments and keeping track of which posts seem to be of the most interest to you helped me keep in mind what people want to know. The kit has step-by-step instructions for (among other things):

• applying for probate
• applying for administration
• figuring out who gets what when there is no will
• how and where to file documents
• how and when to serve notices 
• filling in the forms needed
• when to file tax returns
• dealing with joint property that isn't in the estate
• transmitting land to the estate
• transmitting and transferring stocks and shares
• keeping executor's records
• preparing financial records for final reporting
• getting releases from beneficiaries
• knowing when you need help from a lawyer

 When it's on its way to the stores, you'll be the first to know.

Where and how do I file an application for probate in Alberta?

In a recent comment on a post, a reader told me that she was having trouble finding information about where and how an application for probate is filed in Alberta. I understood her to mean that she was looking for an address, phone number or other specific information. I thought a few others might be interested in this information as well, so I'm answering the question in this post as well as in the "recent comments" section.

In Alberta, applications for probate are filed at the Court of Queen's Bench, which is always in the local courthouse. In Calgary and Edmonton only, there is a separate counter in the courthouse that deals with Surrogate Matters, which includes probate, so you would go to the Surrogate Court counter (it's a division of Queen's Bench). In all other centres, go to the Queen's Bench counter.

Take your original documents, signed by the executor, together with the original Will, plus a photocopy of everything. Give all of these documents to the clerk. He or she will take a look at this package, and if it seems fine, will keep the originals and put a stamp on your photocopy with the date and a court file number. You won't get the originals back but you will keep the photocopy. You will pay the clerk a fee of somewhere between $25 and $400 depending on the value of the estate.

If your documents are not ok, the clerk will give them back to you and ask you to make corrections. This may mean that you have to come back another day. Once everything is acceptable to the clerk, he or she will give it to a judge. You don't have to appear in front of the judge unless he/she has questions for you or a problem with your application.

This process usually takes a few weeks.

To call any clerk of the court toll-free from anywhere in Alberta, call 310-0000 (no area code needed). Ask the operator to connect you to the Clerk of the Court of Queen's Bench in the town you're interested in. If the file is in Calgary and Edmonton you can ask for the Clerk of the Surrogate Court. If you are checking on documents that you've already filed, quote the court file number you were given when the clerk stamped your documents, as they are filed by that number, not by name.

Those of you who need this kind of information in the future, keep an eye open for my new Alberta Probate and Administration Kit that will be out in spring of 2011.

What goes into an executor's accounting?

Many times in this blog I've mentioned that the executor accounts to the residuary beneficiaries of an estate. No doubt you have heard this mentioned elsewhere as well. If you're an executor, do you know how to prepare an accounting? If you're a beneficiary, do you know what to look for in the executor's accounts?

In this post, I'm going to talk about the basics of preparing an executor's accounting. You are most likely to see an accounting at the time that the executor is ready to distribute the estate to the beneficiaries. That means that the funeral, the bills and the taxes have all been paid, and the money left over is going to be split among the beneficiaries in accordance with the Will. The executor prepares his/her accounting, gives it to the beneficiaries, and the beneficiaries are asked to approve the accounts.

Getting the approval of the beneficiaries means that the executor is released from all personal liability for everything he/she has done. Obviously the beneficiaries are going to check everything over pretty carefully before agreeing. This post should be useful both to an executor trying to prepare accounts, and the beneficiary trying to decipher accounts.

The basic idea behind the executor's accounting is to describe what has happened with each of the assets in the estate and subtract all of the bills and liabilities that were paid out, to arrive at the present value of the estate. Here are the elements of the accounting:

1. The inventory of the estate that was included in the application for probate. This is the starting point, as the executor is not responsible for anything that happened while the deceased was alive.

2. A Statement of receipts and disbursements. This can be either a handwritten ledger or a computer-generated statement. It shows all money that came into the estate and everything that was paid out, listed item by item, by date. Many clients find it useful to think of this statement as similar to a bank statement for the executor's bank account. Every asset that was sold - house, car, antiques, cottage - shows as money coming in. Every account or investment that is cashed in also shows as money coming in. Every bill or expense that was paid out show as outgoing money.

3. Reconciliation. Start with the value of the estate as shown on the inventory, add all incoming money, and subtract all outgoing money (using the figures on the statement of receipts and disbursements). If everything has been properly included, the number you get should be the same as the current balance in the executor's account. This, the current balance of the account, is what is now available in the estate to be divided up.

4. Statement of how much the executor wants to be paid. The amount will depend on what was said about compensation in the Will, or if nothing was said, it will depend on the guidelines for your geographical area. The amount of work and responsibility handled by the executor are also factors. The executor should state the dollar amount and how that amount was arrived at (e.g. an hourly rate, a percentage, etc). The executor should also state how much he or she wants to be repaid for out-of-pocket expenses.

5. Statement of any money being held back for future expenses or taxes. Executors have the right to wait for a final Tax Clearance Certificate from Canada Revenue Agency before distributing money to the beneficiaries. However, sometimes the executor agrees to distribute before the tax certificate is received. If the executor does this, he or she should figure out what the taxes might be, and what will be spent on the accountant to do the return, and keep that amount of money in the executor's account.

6. Statement of proposed distribution. The executor should state the names of the beneficiaries, the portion of the estate each will receive, and the dollar amount.

7. Release. The beneficiaries are each asked to review the accounting, and if all looks fine, to sign a release that states they are satisfied with the accounting. A wise executor won't give any beneficiaries their shares until all beneficiaries have signed releases. When all the releases are received by the executor, he or she will give the beneficiaries their cheques.

There is of course a lot more detail I could include here. (I have a chapter about this in my upcoming Alberta Probate Kit, to be released in 2011). This post is intended to give you an idea of what is involved. Executors always have the option of hiring accountants or lawyers to help them with the accounting, which is a good idea if the estate is complicated.

Current top ten posts all in one handy package

The following are currently the top ten most popular posts on my blog. I keep an eye on this because as you may know, I'm preparing an Alberta Probate Kit for Self-Counsel Press. I believe that the more I know about what questions people are asking, the better the Kit will be. It'll be out in early 2011, so stay tuned for that.

I've put in links to each of the top ten articles so you can just click and read:

1. Can an executor distribute estate assets before getting the Tax Clearance Certificate?

2. Should you downsize for retirement?

3. Should an executor get a tax clearance certificate?

4. Joint tenancy vs. tenants in common

5. What is the executor's year?

6. Where are the executor police when you need them?

7. Are co-executors liable for each other's actions?

8. If you're appointed as an executor, should you accept?

9. What are an executor's duties?

10. How do I get a tax clearance certificate?