This is the second of our series on Probate Basics, in which we are looking at the Probate process in Ontario. In this installment, I’ll get into more detail about what you need to do when someone passes away with a Will. You can check out the rest of the first of the series here:
A Recap of Some of the Basics
Probate is the process of obtaining approval from the court to act on behalf of a person who has passed away. This person is the Estate Trustee. The court does this by granting a Certificate of Appointment of Estate Trustee. The procedure to obtain this certificate requires an applicant to prepare and submit all the appropriate documents. A few months later (at least in the Toronto area at this time), the applicant receives the certificate.
Going through probate is not always necessary. Whether it is required depends on certain factors, including what assets the deceased person owned and whether there was a beneficiary of the assets specified (e.g. a beneficiary designation in an RRSP or a jointly owned house).
I Have The Will – Now What?
As every person is unique, so are our Wills. Wills vary widely in their contents, reflecting the complexities of each individual’s life circumstances. And while many details and wishes may be included in someone’s Will, here are a few of the most common topics:
Funeral and Burial
If a Will can be located shortly after death, you’ll want to consult it to see if the deceased person included any wishes concerning their funeral or burial. If there are sufficient funds in the estate, consider following these requests as closely as possible.
These wishes are not binding on the estate, but an Estate Trustee is still required to dispose of the remains in a dignified manner.
A Will generally names one or more persons (or a trust company) to act as the executor, known as the Estate Trustee. This is the person entrusted with carrying out the wishes of the deceased person. Their duties include:
- Making arrangements for the funeral and burial of the deceased person.
- Determining what are the assets of the estate and seeing that they are preserved.
- Applying for probate, if necessary.
- Ensuring any debts of the deceased person are paid (taking extra care in the event the estate does not have enough assets to cover them).
- Distributing the remaining assets of the deceased person according to the terms of the Will.
- Preparing and filing tax returns.
- Keeping accurate records.
If you are named the Estate Trustee, it is up to you to determine if probate is necessary. If so, you will need to complete the probate process, either on your own or with a lawyer’s help. Going through probate in an estate with a Will is simpler than without a Will. However, as we have discussed, probate can still be a complex and lengthy process that may require expert advice.
Acting as an Estate Trustee is a fiduciary duty. This means that having a legal responsibility to work for the benefit of the estate. When dealing with the deceased person’s assets, an Estate Trustee is bound to act in good faith and avoid conflicts of interest.
If an Estate Trustee does not meet the minimum standard required when executing their duties, they can be held responsible for a breach of their fiduciary duty. As an Estate Trustee, you should be sure to speak to a lawyer to understand your role and protect yourself from legal liability.
We often see a request to set up a trust in a Will. This creates ongoing obligations to manage property beyond any outright distribution to beneficiaries upon probate. Trusts that are established by a Will are known as testamentary trusts.
The person named as trustee for a testamentary trust may be the Estate Trustee or someone else. The two are not required to be the same person. The trustee of the testamentary trust must manage the assets and distribute them according to the terms laid in the Will. The trustee must also sort out the preparation and filing of annual tax returns for the trust.
Guardianship of Minor Children
If the deceased person had minor children, their Will likely names one or more guardians for their children. However, this is not the end of the process. Being named in the Will only means you may become the guardian.
A guardian’s appointment is not absolute because the primary factor for appointing a guardian is what is in the children’s best interests. This gives some flexibility should that named guardian be inappropriate for any reason (e.g. location, age, health, etc.) or in the case of a dispute. If more than one candidate is requesting guardianship, the court has the discretion to overrule the wishes in the Will and appoint the most appropriate person.
This is just the tip of the iceberg when it comes to what is involved in administering an estate. Dealing with the administration of an estate can be time-consuming and difficult, even with a valid Will. When you are dealing with a loved one’s estate, seeking legal advice can help you ensure their wishes are properly carried out. If you are named an Estate Trustee in a Will, seeking legal advice is even more critical to help you determine your obligations avoid legal liability for failure to meet your obligations. If you are facing probate or estate administration, we can help you navigate the process and ensure you have everything you need. Send DMC an email or give me a call directly at 416-443-9280 extension 208.