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.

Tips for an executor on completing an estate inventory

An executor or administrator almost always has to prepare an inventory of assets and debts of the estate, whether he or she is applying for Letters Probate or Letters of Administration. There are other good reasons for preparing an inventory too, such as accounting to the beneficiaries, filing tax returns, and calculating the probate fee, lawyer's fee and executor's compensation.

Though the forms themselves vary from province to province, the principles behind the inventory are the same everywhere. The following are 16 tips to keep in mind as you gather information and fill in the paperwork:

1. All values should be as of the date the deceased died.

2. Use fair market value as a general rule.

3. "Real" property includes land, buildings of all kinds, life estates and mines and minerals titles. All other property is considered "personal" property.

4. When listing real property, include both the civic (street) address and the legal description. The legal description can be found on the title or on the tax notice for the property.

5. Use appraisers to set values on large assets.

6. When listing debts, include a breakdown of funeral expenses.

7. Under debts, include not just current debts but also future tax liability and other future debts.

8. Do not include any real or personal property that the deceased owned jointly with another person.

9. Do not include life insurance that names a beneficiary unless the beneficiary has already passed away, or the policy names the estate as the beneficiary.

10. Do not include financial assets that name a beneficiary, such as RRSP, RRIF, or pension.

11. Do not include anything that comes to an end with the death of the deceased, such as an annuity.

12. List and apply for all government and private death benefits.

13. Household items such as clothing and furniture may be grouped together and described on the inventory as "household and personal items" and given a nominal value such as $200. Assets of higher resale value such as artwork or antiques may be listed and valued separately.

14. Include the deceased's business interests, whether that interest takes the form of shares in a private corporation or a share in a partnership.

15. If your inventory is all ready to be filed except for one value that seems to be taking forever to get, you may give your best guess as to the value SO LONG AS you describe it on the inventory as an estimate, and later file a supplementary document to give the court the missing value.

16. Remember that the inventory is part of sworn evidence, so you will have to swear it in front of a commissioner for oaths. Swearing a false document is perjury.

Hopefully these tips help answer some of your questions.

How do I change executors?

I'm often asked this question, but before answering I always ask whether the person's whose Will it is (the testator) is still alive. In other words, are you trying to change the appointment of an executor in a Will, or are you trying to change an executor who is already in charge of an estate?

A person can change his or her choice of executor in the Will as long as he or she has mental capacity to do so. Changing the executor doesn't necessarily mean making a whole new Will. If you are happy with your Will other than the executor named, you can have a Codicil made that only changes the executorship. A Codicil is simply a new, brief document that amends your Will. It is much like a Will, in that all of the rules for Will-making also apply to Codicils. The advantage to having a Codicil made is that the process and the document are shorter and less expensive.

The Will and the Codicil must be kept together so that they can be read as one document.

If you are interested in changing an executor who was named in the Will but who has not done anything on behalf of the estate, and who doesn't want to do anything for the estate, that executor can opt out. The legal term for it is renouncing the right to be an executor. An executor might renounce if he or she is too ill to be the executor, if he or she has moved very far away, if he or she has lost mental capacity, if he or she doesn't get along with the family members, or for other reasons.

The important thing to remember about renouncing is that it can only be done right at the beginning of an estate before an executor does any work. Once the executor takes any steps at all as executor, he or she can't quit being an executor until the court says so.

If an executor renounces and there is an alternate executor named, the alternate executor can then take over and be in charge of the estate.

If there is no alternate executor named, you are left with a Will that is completely valid except that there is no executor to carry out the work. At this point, someone will have to be appointed as an administrator of the estate. The Will is still used, but the court will appoint an administrator to do the work that the executor would have done.

If an executor is part way through the job of being an executor and wants to resign from it, he or she must ask the court for permission. At that time, the executor will be required to give a full accounting of all financial transactions that he or she has done on behalf of the estate. This includes an update on the current balances and values of all accounts, properties and other assets, and an explanation for each expenditure. This process is sometimes called passing of accounts. Until the court has approved the accounts and dismissed the executor, he or she remains the executor.

Sometimes the family members want to change or remove an executor who they believe is not doing a good job. They want to remove someone who doesn't want to be removed. This is not easy. The court will not want to remove an executor who was chosen personally by the executor without very good reason. It is pretty nasty litigation most of the time, and not something that should be attempted lightly.

What is probate?

Probate is a process of submitting a deceased person's Will to the court and obtaining a court order called a Grant of Probate. Along with the original, signed Will, the executor sends a group of documents that together are called an Application for Probate. The Grant of Probate confirms the validity of the Will, confirms that the executor is the person in charge of the estate, and confirms that all parties, including beneficiaries, creditors, banks, land registries etc, should follow the instructions and wishes set out in the Will.

Some of the information sent along with the Will includes:
- facts about the deceased person's age, marital status etc
- details of the Will and/or Codicil that is being probated
- information about the family of the deceased person
- an inventory of the deceased's assets and debts
- evidence that the Will was properly signed and witnessed
- proof that the executor who is applying is the right person to do so
- a schedule of what each beneficiary under the Will is going to inherit
- proof that notice of the application was given to everyone entitled to it

The above list is simplified, but gives a general idea of what the Application for Probate is all about.

If there is no Will, or the Will is invalid, the person who wants to be appointed as being in charge of the estate will apply to the court for a Grant of Administration rather than probate. Once the person is appointed by the court, he or she has the same authority and responsibility as an executor. The estate would be distributed according to intestacy laws.

If there is a Will that is valid except for the executor appointment (e.g. the executor named has passed away and there is nobody else named), someone may apply to the court for a Grant of Administration With Will Annexed. In this case, the administrator would be appointed to fill the shoes of the executor and would follow the Will's instructions.

When the Application for Probate is filed with the court, there is a fee that must be paid. In the "Links" section of this blog I've linked to a chart of probate fees across Canada. I encourage people to learn about the fees that apply in their province, as I regularly see estate planning mistakes that people tell me were made to "avoid probate". See my earlier blog post here about the pitfalls of trying to avoid probate without proper advice.

Not every Will must go through the probate process. Whether or not probate is required will depend on the type of assets owned by the deceased, how they are owned (joint, individually etc), the value of the assets, the clarity of the Will, and other issues. If anyone contests the Will or if any parts of the Will are unclear, the executor will have to go through probate.

Probate is not a quick process. The gathering of information for the inventory is a slow process. Also, once the documents are complete and filed with the court, you can expect to wait up to six weeks for te documents to be processed by the Clerk of the Court and signed by a judge.

When can an administrator start acting for an estate?

An administrator of an estate is similar to an exector in many ways, but there is one very important difference. An executor has the legal authority to act on behalf of an estate as soon as the person who appointed him or her dies. This is because the executor's authority is set out in the deceased's Will. An administrator, on the other hand, has not been named by the deceased. This means that an administrator can't act on behalf of an estate until he or she is appointed by the court, which could take a few weeks.

If a person dies without any Will at all, someone must apply to the court for a Grant of Administration. If the person dies leaving a Will, but the Will does not appoint an executor (for example, the named executor has died and there is no alternate named) there is a slightly different procedure. Assuming that the Will is otherwise valid, the person would apply for a Grant of Administration With Will Annexed. This means that the Will is going to be followed in every way other than replacing the executor.

If you intend to apply to the court to become the administrator of an estate for someone who has recently passed away, you can:

• protect any of the assets that you can
• if there are cheques for the deceased person, set up an account in the name of the estate and put the cheques in
• make funeral arrangements
• take the bill for the funeral to the deceased's bank and ask them to pay the bill out of the deceased's bank account

Some of the things you should not do before you are appointed are:

• pay any bills (other than funeral as mentioned) using the deceased's money
• tell people that you are in charge of the estate
• place a Notice to Creditors and Claimants in the newspaper
• sign any papers on behalf of the estate
• make enquiries about life insurance policies, bank accounts, investments etc belonging to the deceased in which you state or imply that you have authority to gather the information or the assets

An administrator is entitled to be paid for his or her work just as an executor is.

If someone in your life has passed away without leaving a Will and you are the person who is going to apply to the court, you may feel some urgency to get on with the things that need to be done in the estate. Take the time to do things legally and correctly to protect the beneficiaries of the estate, and to protect yourself from future liability. The first thing to do is see a Wills and Estates lawyer to get the application to the court going. If you choose a lawyer who does not specialize in Wills and Estates, you can expect the process to take longer.

If you are appointed as an administrator but are completely overwhelmed by the responsibilities or the time pressures, keep in mind that you can walk into any Scotiabank branch and ask them to call the trust department to help you. You can hire Scotiatrust to be your agent. This means that you're still the administrator and can call the shots, but you will have someone to do all the legwork.