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Tuesday, August 3, 2010

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.

2 comments:

  1. What happens when a named executor in the Will wants to transfer responsibility to someone else?

    ReplyDelete
    Replies
    1. When an executor is named but doesn't want to take on the job, he or she has two basic choices.

      One is to renounce the job. This must happen at the beginning of the estate. If the executor does this, he or she has no say in who takes over the job, so the executor can't really "transfer" it to anyone else.

      The other option is to hire a trust company to act as the executor's agent. If this happens, the executor retains the legal decision-making authority but pays the trust company to do the actual work.

      If you are talking about an executor who has already started work on the estate, renouncing is not an option. If the executor wants or needs to withdraw from the estate, he must approach the court and apply to be dismissed. He remains legally responsible for the assets of the estate unless and until the court dismisses him. The court will require him to pass his accounts before granting the request.

      Lynne


      Delete

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