Trustee of deceased estate: \u00a0Introduction<\/span><\/strong><\/h2>\nI have previously written on what happens when a person dies insolvent, i.e. their debts are greater than the value of their assets. \u00a0My blogs on being a trustee of deceased estate<\/strong> that is insolvent are:<\/span><\/p>\n\n- CAN YOU BANKRUPT A DEAD PERSON? DEATH OF A DEBTOR, PART 1<\/span><\/a><\/li>\n
- DEATH OF A DEBTOR \u2013 THE INDIGNITY TO BANKRUPT A DECEASED PERSON PART 2<\/span><\/a><\/li>\n
- DEBT AND DEATH \u2013 DON\u2019T LET YOUR DEBT HAUNT FUTURE GENERATIONS<\/span><\/a><\/li>\n
- DEATH OF A DEBTOR: WHO\u2019S RESPONSIBLE FOR THE DEBTS?<\/span><\/a><\/li>\n
- WHAT HAPPENS TO DEBT WHEN YOU DIE CANADA: ARE YOU FREE OF DEBT<\/span><\/a><\/li>\n<\/ul>\n
I am now switching a bit. \u00a0Over the next few weeks, I am going to be writing a series of blogs and vlogs to explain why I believe that a licensed insolvency trustee (formerly called a bankruptcy trustee) is the professional you should be thinking of making the executor of a deceased estate and recording it in your will. \u00a0I am talking about solvent estates. Those with many assets and beneficiaries. I will be making the case why over the next few weeks.\u00a0 I will not be on\u00a0insolvent estates of deceased persons.
\n<\/span><\/p>\nI repeat that these blogs and vlogs will have nothing to do with <\/span>debt<\/span><\/a>, <\/span>insolvency<\/span><\/a> or <\/span>bankruptcy<\/span><\/a>. \u00a0However, I will show how, based on the knowledge and expertise possessed by <\/span>licensed insolvency trustees<\/span><\/a>, it makes them the perfect candidate to serve as an executor of a deceased estate that is rich with assets. \u00a0I will also be focussing my comments on the Province of Ontario. There may be some variations from province to province.<\/span><\/p>\nI caution that I and my firm are not lawyers, and I am by no means providing in this and upcoming <\/span>Brandon\u2019s Blogs<\/span><\/a> advice on wills or estate planning matters. \u00a0For that, you must consult your lawyer. <\/span><\/p>\nIn this blog, I wish to set the stage by going over some basics when it comes to a deceased estate.<\/span><\/p>\nTrustee of deceased estate: \u00a0The executor\/executrix or estate trustee<\/span><\/strong><\/h2>\nIn Ontario, an estate trustee<\/a> (also known as the executor or executrix) is the only individual with the lawful authority to handle or disperse an estate. \u00a0When an individual dies they might leave items, property, real estate, cash and investments and other possessions which is called their estate.<\/span>
\n<\/span>
\n<\/span>Probate is a treatment to ask the court to:<\/span>
\n<\/span><\/p>\n\n- provide an individual with the authority to work as the estate trustee of an estate;<\/span><\/li>\n
- verify the authority of an individual acting as the estate trustee named in the deceased’s will; and<\/span><\/li>\n
- officially accept that the deceased’s will is their legitimate last will.<\/span><\/li>\n<\/ul>\n
You can apply for probate in the Ontario Superior Court of Justice. The procedure is governed by the <\/span>Estates Act<\/span><\/a> and the related Rules of Civil Procedure.dece<\/span><\/p>\nIf your probate application succeeds, the court will provide a <\/span>Certificate of Appointment of Estate Trustee<\/span><\/a>, which is evidence that an individual has the lawful authority to manage the estate. \u00a0If there is a will, it is also evidence that the will is valid.<\/span><\/p>\nTrustee of deceased estate: \u00a0Must I always apply for probate?<\/span><\/strong><\/h2>\nA probate Certificate is not needed in every situation for a deceased estate. Prior to beginning an application for probate, you might want to establish whether the deceased estate actually needs a probate Certificate. <\/span><\/p>\nAn application for a probate Certificate is normally made if:<\/span><\/p>\n\n- the departed individual passed away without a will<\/span><\/li>\n
- the deceased’s will does not show an estate trustee<\/span><\/li>\n
- a financial institution desires evidence of an individual’s lawful authority to get the cash or financial investments of the deceased<\/span><\/li>\n
- the estate’s properties consist of real estate which does not pass to an individual by right of survivorship<\/span><\/li>\n
- there is a disagreement about who ought to be the estate trustee<\/span><\/li>\n
- there is a conflict or possible conflict about the legitimacy of the will; or<\/span><\/li>\n
- some of the beneficiaries are unable to supply legal consent.<\/span><\/li>\n<\/ul>\n
Trustee of deceased estate: \u00a0Trustee of estate responsibility<\/span><\/strong><\/h2>\nWhat should the estate trustee\u2019s first steps be? \u00a0Here is where the actions the estate trustee should immediately take are almost the same as when a licensed insolvency trustee is first appointed either as:<\/span><\/p>\n\n- a <\/span>receiver<\/span><\/a> for a secured creditor;<\/span><\/li>\n
- the receiver appointed by <\/span>Court order<\/span><\/a>; or<\/span><\/li>\n
- a <\/span>bankruptcy trustee<\/span><\/a><\/li>\n<\/ul>\n
The will and financial records<\/i><\/strong><\/p>\nAssuming the family has already made arrangements for and the funeral has taken place, the estate trustee should first find a copy of the will and any books and records of the deceased that will explain the deceased\u2019s financial affairs. \u00a0If the estate trustee cannot find a copy of the will, he or she should consult with the deceased\u2019s family and lawyer. Hopefully one or both will have a copy.<\/span><\/p>\nAs the licensed insolvency trustee, we must also find the <\/span>books and records<\/span><\/a> of the company or person, so that we can start learning about the financial affairs of the insolvent or bankrupt.<\/span><\/p>\nProof of authority<\/i><\/strong><\/p>\nThe estate trustee will also require a certified copy of the death certificate, to prove the death to financial institutions and the government. \u00a0The will, and\/or the probate Certificate, will be proof of the estate trustee\u2019s authority to act. <\/span><\/p>\nIn the same way, the <\/span>licensed insolvency trustee<\/span><\/a> requires a copy of its Appointment Letter in a private receivership, the Court order in a Court-appointed receivership, or the Certificate of the <\/span>Superintendent of Bankruptcy<\/span><\/a> in a bankruptcy. \u00a0These documents evidence the appointment of the licensed insolvency trustee.<\/span><\/p>\nTaking possession and control of the assets<\/i><\/strong><\/p>\nThe estate trustee must now take control of any assets that do not automatically by operation of law transfer to another person by right of survivorship. \u00a0The estate trustee must establish physical control, take an inventory of the assets and arrange for appraisals to be performed where required. The estate trustee should establish the market value of the assets as soon as possible.<\/span><\/p>\nIn the same way, upon being appointed as either receiver or trustee, a licensed insolvency trustee must establish control and\/or possession of the assets, properties and undertakings of the insolvent\/bankrupt debtor, whether in the debtor\u2019s possession or that of a third party. \u00a0The licensed insolvency trustee must make an inventory of the assets and where required, arrange for appraisals.<\/span><\/p>\nInsurance and bonding<\/i><\/strong><\/p>\nThe estate trustee must make sure that, in the case of real property and chattels, that the assets are properly insured. \u00a0As well, if an application was made to Court for probate and the Court issued the Certificate, the Court may also require the estate trustee to get a bond for a specific value to protect the beneficiaries. \u00a0The amount of the bond will have a relation to the estimated value of the assets.<\/span><\/p>\nIn the same way, the receiver\/trustee must make sure that the hard assets are properly insured. \u00a0In a bankruptcy, the Superintendent of Bankruptcy sometimes requires the trustee to get a bond to protect the bankruptcy estate.<\/span><\/p>\nThe bond will be issued by an insurance company licensed to provide such <\/span>coverage in Ontario<\/span><\/a>.<\/span><\/p>\nTrustee of deceased estate: \u00a0The responsibilities of the estate trustee<\/span><\/strong><\/h2>\nIn general terms, an estate trustee has the following responsibilities:<\/span><\/p>\n\n- be impartial amongst beneficiaries<\/span><\/li>\n
- act in a commercially reasonable way<\/span><\/li>\n
- to act in the best interests of the beneficiaries<\/span><\/li>\n
- not make decisions for individual gain<\/span><\/li>\n
- keep accurate records of all decisions made and actions and activities; and<\/span><\/li>\n
- acting in accordance with the will if one exists<\/span><\/li>\n<\/ul>\n
In every Court appointment, be it a <\/span>receivership<\/span><\/a> or <\/span>bankruptcy<\/span><\/a>, the licensed insolvency trustee must live up to these same standards. \u00a0Rather than beneficiaries, there are stakeholders. The <\/span>Court officer<\/span><\/a> must be impartial and must act in the best interests of all stakeholders.<\/span><\/p>\nTrustee of deceased estate: \u00a0Trustee vs executor of an estate<\/span><\/strong><\/h2>\nSo hopefully from this blog, you can see that the knowledge, experience and expertise of a licensed insolvency trustee would stand him or her in a good position to act as executor, executrix or estate trustee of a deceased estate.<\/span><\/p>\nIf you have any questions about a deceased estate and the need for an estate trustee, whether it is solvent or insolvent, contact the <\/span>Ira Smith Team<\/span><\/a>. \u00a0We have decades and generations of experience in helping people and companies overcome their financial problems. \u00a0You don\u2019t need to suffer; we can end your pain.<\/span><\/p>\nIn my next blog, I am going to write about a topic that is becoming more and more common in deceased estates; picking the right estate trustee. \u00a0As you will see, it is much more than just finding the right skill set.<\/span><\/p>\n
- \n
- CAN YOU BANKRUPT A DEAD PERSON? DEATH OF A DEBTOR, PART 1<\/span><\/a><\/li>\n
- DEATH OF A DEBTOR \u2013 THE INDIGNITY TO BANKRUPT A DECEASED PERSON PART 2<\/span><\/a><\/li>\n
- DEBT AND DEATH \u2013 DON\u2019T LET YOUR DEBT HAUNT FUTURE GENERATIONS<\/span><\/a><\/li>\n
- DEATH OF A DEBTOR: WHO\u2019S RESPONSIBLE FOR THE DEBTS?<\/span><\/a><\/li>\n
- WHAT HAPPENS TO DEBT WHEN YOU DIE CANADA: ARE YOU FREE OF DEBT<\/span><\/a><\/li>\n<\/ul>\n
I am now switching a bit. \u00a0Over the next few weeks, I am going to be writing a series of blogs and vlogs to explain why I believe that a licensed insolvency trustee (formerly called a bankruptcy trustee) is the professional you should be thinking of making the executor of a deceased estate and recording it in your will. \u00a0I am talking about solvent estates. Those with many assets and beneficiaries. I will be making the case why over the next few weeks.\u00a0 I will not be on\u00a0insolvent estates of deceased persons.
\n<\/span><\/p>\nI repeat that these blogs and vlogs will have nothing to do with <\/span>debt<\/span><\/a>, <\/span>insolvency<\/span><\/a> or <\/span>bankruptcy<\/span><\/a>. \u00a0However, I will show how, based on the knowledge and expertise possessed by <\/span>licensed insolvency trustees<\/span><\/a>, it makes them the perfect candidate to serve as an executor of a deceased estate that is rich with assets. \u00a0I will also be focussing my comments on the Province of Ontario. There may be some variations from province to province.<\/span><\/p>\n
I caution that I and my firm are not lawyers, and I am by no means providing in this and upcoming <\/span>Brandon\u2019s Blogs<\/span><\/a> advice on wills or estate planning matters. \u00a0For that, you must consult your lawyer. <\/span><\/p>\n
In this blog, I wish to set the stage by going over some basics when it comes to a deceased estate.<\/span><\/p>\n
Trustee of deceased estate: \u00a0The executor\/executrix or estate trustee<\/span><\/strong><\/h2>\n
In Ontario, an estate trustee<\/a> (also known as the executor or executrix) is the only individual with the lawful authority to handle or disperse an estate. \u00a0When an individual dies they might leave items, property, real estate, cash and investments and other possessions which is called their estate.<\/span>
\n<\/span>
\n<\/span>Probate is a treatment to ask the court to:<\/span>
\n<\/span><\/p>\n- \n
- provide an individual with the authority to work as the estate trustee of an estate;<\/span><\/li>\n
- verify the authority of an individual acting as the estate trustee named in the deceased’s will; and<\/span><\/li>\n
- officially accept that the deceased’s will is their legitimate last will.<\/span><\/li>\n<\/ul>\n
You can apply for probate in the Ontario Superior Court of Justice. The procedure is governed by the <\/span>Estates Act<\/span><\/a> and the related Rules of Civil Procedure.dece<\/span><\/p>\n
If your probate application succeeds, the court will provide a <\/span>Certificate of Appointment of Estate Trustee<\/span><\/a>, which is evidence that an individual has the lawful authority to manage the estate. \u00a0If there is a will, it is also evidence that the will is valid.<\/span><\/p>\n
Trustee of deceased estate: \u00a0Must I always apply for probate?<\/span><\/strong><\/h2>\n
A probate Certificate is not needed in every situation for a deceased estate. Prior to beginning an application for probate, you might want to establish whether the deceased estate actually needs a probate Certificate. <\/span><\/p>\n
An application for a probate Certificate is normally made if:<\/span><\/p>\n
- \n
- the departed individual passed away without a will<\/span><\/li>\n
- the deceased’s will does not show an estate trustee<\/span><\/li>\n
- a financial institution desires evidence of an individual’s lawful authority to get the cash or financial investments of the deceased<\/span><\/li>\n
- the estate’s properties consist of real estate which does not pass to an individual by right of survivorship<\/span><\/li>\n
- there is a disagreement about who ought to be the estate trustee<\/span><\/li>\n
- there is a conflict or possible conflict about the legitimacy of the will; or<\/span><\/li>\n
- some of the beneficiaries are unable to supply legal consent.<\/span><\/li>\n<\/ul>\n
Trustee of deceased estate: \u00a0Trustee of estate responsibility<\/span><\/strong><\/h2>\n
What should the estate trustee\u2019s first steps be? \u00a0Here is where the actions the estate trustee should immediately take are almost the same as when a licensed insolvency trustee is first appointed either as:<\/span><\/p>\n
- \n
- a <\/span>receiver<\/span><\/a> for a secured creditor;<\/span><\/li>\n
- the receiver appointed by <\/span>Court order<\/span><\/a>; or<\/span><\/li>\n
- a <\/span>bankruptcy trustee<\/span><\/a><\/li>\n<\/ul>\n
The will and financial records<\/i><\/strong><\/p>\n
Assuming the family has already made arrangements for and the funeral has taken place, the estate trustee should first find a copy of the will and any books and records of the deceased that will explain the deceased\u2019s financial affairs. \u00a0If the estate trustee cannot find a copy of the will, he or she should consult with the deceased\u2019s family and lawyer. Hopefully one or both will have a copy.<\/span><\/p>\n
As the licensed insolvency trustee, we must also find the <\/span>books and records<\/span><\/a> of the company or person, so that we can start learning about the financial affairs of the insolvent or bankrupt.<\/span><\/p>\n
Proof of authority<\/i><\/strong><\/p>\n
The estate trustee will also require a certified copy of the death certificate, to prove the death to financial institutions and the government. \u00a0The will, and\/or the probate Certificate, will be proof of the estate trustee\u2019s authority to act. <\/span><\/p>\n
In the same way, the <\/span>licensed insolvency trustee<\/span><\/a> requires a copy of its Appointment Letter in a private receivership, the Court order in a Court-appointed receivership, or the Certificate of the <\/span>Superintendent of Bankruptcy<\/span><\/a> in a bankruptcy. \u00a0These documents evidence the appointment of the licensed insolvency trustee.<\/span><\/p>\n
Taking possession and control of the assets<\/i><\/strong><\/p>\n
The estate trustee must now take control of any assets that do not automatically by operation of law transfer to another person by right of survivorship. \u00a0The estate trustee must establish physical control, take an inventory of the assets and arrange for appraisals to be performed where required. The estate trustee should establish the market value of the assets as soon as possible.<\/span><\/p>\n
In the same way, upon being appointed as either receiver or trustee, a licensed insolvency trustee must establish control and\/or possession of the assets, properties and undertakings of the insolvent\/bankrupt debtor, whether in the debtor\u2019s possession or that of a third party. \u00a0The licensed insolvency trustee must make an inventory of the assets and where required, arrange for appraisals.<\/span><\/p>\n
Insurance and bonding<\/i><\/strong><\/p>\n
The estate trustee must make sure that, in the case of real property and chattels, that the assets are properly insured. \u00a0As well, if an application was made to Court for probate and the Court issued the Certificate, the Court may also require the estate trustee to get a bond for a specific value to protect the beneficiaries. \u00a0The amount of the bond will have a relation to the estimated value of the assets.<\/span><\/p>\n
In the same way, the receiver\/trustee must make sure that the hard assets are properly insured. \u00a0In a bankruptcy, the Superintendent of Bankruptcy sometimes requires the trustee to get a bond to protect the bankruptcy estate.<\/span><\/p>\n
The bond will be issued by an insurance company licensed to provide such <\/span>coverage in Ontario<\/span><\/a>.<\/span><\/p>\n
Trustee of deceased estate: \u00a0The responsibilities of the estate trustee<\/span><\/strong><\/h2>\n
In general terms, an estate trustee has the following responsibilities:<\/span><\/p>\n
- \n
- be impartial amongst beneficiaries<\/span><\/li>\n
- act in a commercially reasonable way<\/span><\/li>\n
- to act in the best interests of the beneficiaries<\/span><\/li>\n
- not make decisions for individual gain<\/span><\/li>\n
- keep accurate records of all decisions made and actions and activities; and<\/span><\/li>\n
- acting in accordance with the will if one exists<\/span><\/li>\n<\/ul>\n
In every Court appointment, be it a <\/span>receivership<\/span><\/a> or <\/span>bankruptcy<\/span><\/a>, the licensed insolvency trustee must live up to these same standards. \u00a0Rather than beneficiaries, there are stakeholders. The <\/span>Court officer<\/span><\/a> must be impartial and must act in the best interests of all stakeholders.<\/span><\/p>\n
Trustee of deceased estate: \u00a0Trustee vs executor of an estate<\/span><\/strong><\/h2>\n
So hopefully from this blog, you can see that the knowledge, experience and expertise of a licensed insolvency trustee would stand him or her in a good position to act as executor, executrix or estate trustee of a deceased estate.<\/span><\/p>\n
If you have any questions about a deceased estate and the need for an estate trustee, whether it is solvent or insolvent, contact the <\/span>Ira Smith Team<\/span><\/a>. \u00a0We have decades and generations of experience in helping people and companies overcome their financial problems. \u00a0You don\u2019t need to suffer; we can end your pain.<\/span><\/p>\n
In my next blog, I am going to write about a topic that is becoming more and more common in deceased estates; picking the right estate trustee. \u00a0As you will see, it is much more than just finding the right skill set.<\/span><\/p>\n
- act in a commercially reasonable way<\/span><\/li>\n
- the receiver appointed by <\/span>Court order<\/span><\/a>; or<\/span><\/li>\n
- the deceased’s will does not show an estate trustee<\/span><\/li>\n
- verify the authority of an individual acting as the estate trustee named in the deceased’s will; and<\/span><\/li>\n
- DEATH OF A DEBTOR \u2013 THE INDIGNITY TO BANKRUPT A DECEASED PERSON PART 2<\/span><\/a><\/li>\n
![\"trustee](\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2019\/02\/7b73c66df6e1fe942fd9f835d28ff520.jpg\" "\\"trustee")
<\/p>\n