Executor’s Handbook

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What is an Executor?
While the person(s) that is named in the Last Will and Testament to administer a deceased estate is commonly referred to as an
“Executor”, the legal term for this person(s) is “Personal Representative”. Each province has its own legislation, choosing their own title
for this role. For example, in Ontario it is “estate trustee” and in Quebec it is “liquidator”. For the purposes of this handbook, we will
refer to the role of personal representative as the commonly referred to term, “Executor” to encompass liquidators, estate trustees,
trustees and administrators.

Being requested to be an Executor

It is an honour to be asked to be an Executor of a person’s estate and it implies that you have been regarded as trustworthy and
capable of carrying out the duties associated with this important task. It is also a serious responsibility that is subject to provincial
law and regulation and carries with it a substantial amount of risk and liability. It is an onerous task and even a nominal estate can
take 12 – 18 months to settle.
A person is not legally required to act as an Executor and can refuse the appointment. Additionally, there are a number of industry
(IIROC and MFDA) related and dealer compliance rules that prevent advisors from accepting an appointment. It is essential to know
the rules and if you become aware that a client has named you as an Executor you should immediately advise your dealer.
This handbook provides a solid overview of estate settlement procedures and will provide you with some useful information to
understand the process and how an estate should be settled in a timely and competent fashion. It is important to note that this
handbook is not legal advice and is not a substitute for the advice of legal counsel. As will be described, there are numerous legal
aspects to settling an estate and an Executor needs to seek legal (and other professional) counsel to administer an estate.
Table of contents

What is an Executor? 2 Section 3: Overview of an Executor’s Initial Duties 10

Glossary of Terms 4 Section 4: The Estate 12

Section 1: The Legal and Regulatory Environment 6 Section 5: The Will 13

Section 2: The Implications of Being an Executor Section 6: Seeking Outside Assistance 14

Time Commitment 8
Section 7: Tax Considerations 16
Minimizing Executor Liability 8
and Risk Mitigation Section 8: Insurance Considerations 19
Record Keeping 9 Section 9: Distributing the Estate 20
Accepting or Rejecting the Role of Executor 9
Section 10: Resources for the Executor 21
Compensation for the Executor and 9
Outside Parties

Acknowledgement:
We would like to sincerely thank Michael Kulbak, Kulbak Trust Solutions
for all his help in the updating and editing of this handbook.

EXECUTOR’S HANDBOOK 3
Glossary of Terms

Throughout this handbook you may come across terminology that is unfamiliar to you. Reference this glossary at any time
you need clarification.

Administrator In the case of intestacy (when someone dies without a will) the individual appointed by the court
(Administratrix if female): with the legal authority to manage the estate’s assets.

Beneficiary: This is the person named to receive goods or benefits under the Testator’s Will or pursuant to the
distribution of an estate due to intestacy.

Clearance Certificate: A document issued by Canada Revenue Agency that confirms that an estate of a deceased person has
paid all amounts of tax, interest and penalties it owed at the time the certificate was issued. Let’s the
legal representative distribute assets without the risk of being personally responsible and liable for
amounts of the deceased or estate.

Estate assets: Estate assets are those over which the deceased had control and generally include such things
as bank accounts, investment accounts, real estate and other personal belongings.

Executor (Executrix if An Executor is the person named in a Will to carry out the testamentary requests and estate
female): distribution of the deceased.

Fair Market Value: The price of an asset comparable in the marketplace or what it would reasonably be worth in an open,
unrestricted, and non-artificial transaction.

Intestacy: Occurs when a person dies without a legal Will. Each jurisdiction has different rules regarding
intestacy and distribution of the estate.

Non-estate assets: Assets over which the deceased had control but are not considered estate assets in the legal sense
and are therefore not part of the Executor’s responsibilities. These might include insurance policies,
assets held in Joint Tenancy, and certain financial accounts registered under tax law.

Power of Attorney A Power of Attorney ( POA) for finances is a legal document which enables another party
(POA) for Finances: (known as the Attorney) to act on the Principal’s (also known as the “Donor, “Grantor”) behalf in
the management and administration of their financial affairs. On death of the Principal, the POA
becomes unenforceable.

EXECUTOR’S HANDBOOK 4
Power of Attorney A Power of Attorney for health care is a legal document which authorizes an individual
(POA) for Health Care: (known as the Attorney) to make health care decisions on behalf of the Principal (also known
as the “Donor”, “Grantor”).

Principal
A person granting Powers of Attorney to another party.
(aka Grantor, Donor):

Probate: Probate is the legal process in which the last will of the deceased is taken to the provincial probate
court for approval. The court will approve the will (known in most jurisdictions) as “Letters Probate”
unless the validity of the will is being challenged and/or there are other issues. For the court to
provide approval, the will and additional documentation must be prepared in a specific format and an
inventory of all the assets that pass through the estate are specified. Probate provides protection to
both the third parties that are requested to transfer assets and the Executor(s) who are administering
the estate.

Probate Fees These are the Provincial/Territorial fees paid on the value of estate and are designed to reflect the
(Ontario – Estate administrative costs of reviewing the estate and issuing Letters Probate although the actual fees are
Administration Taxes): usually based on some percentage of the estate value. Certain assets may move outside the estate
and not be subject to these fees. Refer to the ‘Estate and Non-Estate Assets’ section of this handbook
to learn which type of assets are not subject to probate fees.

Testator
The Testator is the person who has left a Will.
(Testatrix if female):

Trust: A Trust is a right of property held by one person for another. In the case of a Will, the Executor
is assuming legal control of the estate assets for the benefit of the beneficiaries. The Executor has
a legal responsibility to carry out the instructions of the Testator for the benefit of the beneficiaries
of the estate.

Trustee: A person or an organization that has been appointed to administer property or assets for the benefit
of a third party.

Will: The Will is the instrument by which a person, while alive, directs the distribution and treatment of
their estate after their death. Wills are generally revocable at any time while the person is alive so
it is crucial (and part of the probate process) to ensure that the Will in question is the most current.

EXECUTOR’S HANDBOOK 5
Section 1
The Legal and Regulatory Environment
Taking on the role of Executor of an estate comes with serious risk, liability and legal
implications. It is important to ensure that there are no professional and conflicts of
interest reasons that may preclude the person named as Executor in the Will from
accepting the Executor appointment.
You must carry out your duties professionally, wisely and dispassionately. It is an unfortunate fact that Executors often encounter
disgruntled beneficiaries who feel they have been treated unfairly and may apply pressure on the Executor so it is important to
appreciate that your first and foremost responsibility is to the Testator and their estate wishes. It is likely that interested parties
will be watching your actions carefully so it is crucial that you thoroughly understand your rights and obligations.
Wills and estates are a Provincial/Territorial concern and each jurisdiction will have statutes addressing these issues. It is important
to note that while there is a great deal of agreement and overlap between the various pieces of legislation, there are definitely
differences that can be material in particular cases.

What if someone dies outside of Canada?

If someone has died outside of Canada, contact the appropriate Canadian embassy or consulate
https://travel.gc.ca/assistance/emergency-assistance. Contact the deceased’s travel insurance
provider for guidance and coverage details. Most funeral directors should also be able to provide
assistance in arranging transportation.

EXECUTOR’S HANDBOOK 6
 Executors often encounter disgruntled beneficiaries who feel they have
been treated unfairly and may apply pressure on the Executor so it is
important to appreciate that your first and foremost responsibility is to
the Testator and their estate wishes.

Here is a list of the relevant legislation for each Province/Territory. Though the following provides detailed and useful
information, competent legal advice must be sought when determining the applicability of the law to a specific situation.

Province
Legislation Link
Territory

Alberta Wills and

www.qp.alberta.ca/documents/Acts/W12P2.pdf
Succession Act

British Columbia Wills, Estates and

www.leg.bc.ca/39th1st/3rd_read/gov04-3.htm
Succession Act

Manitoba Wills Act web2.gov.mb.ca/laws/statutes/ccsm/w150e.php

New Brunswick Wills Act www.canlii.org/en/nb/laws/stat/rsnb-1973-c-w-9/latest/rsnb-1973-c-w-9.html

Newfoundland
Wills Act assembly.nl.ca/legislation/sr/statutes/w10.htm
and Labrador

Nova Scotia Wills Act nslegislature.ca/legc/bills/60th_1st/1st_read/b023.htm

Ontario Succession Law

www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90s26_e.htm
Reform Act

Prince Edward
Probate Act www.gov.pe.ca/law/statutes/pdf/p-21.pdf
Island

Quebec Justice Quebec,

https://www.justice.gouv.qc.ca/en/your-money-and-your-possessions/wills
Wills

Saskatchewan Wills Act www.qp.gov.sk.ca/documents/English/Statutes/Statutes/W14-1.pdf

Northwest
Wills Act www.canlii.org/en/nu/laws/stat/rsnwt-nu-1988-c-w-5/latest/rsnwt-nu-1988-c-w-5.html
Territories

Nunavut Wills Act www.canlii.org/en/nu/laws/stat/rsnwt-nu-1988-c-w-5/latest/rsnwt-nu-1988-c-w-5.html

Yukon Wills Act www.gov.yk.ca/legislation/acts/wills.pdf

EXECUTOR’S HANDBOOK 7
Section 2

The Implications of Being an Executor

Time Commitment • Be transparent with beneficiaries but realize that not
How long it will take to fulfill your role as Executor depends on all parties specified in the will are entitled to the same
the complexity of the estate. Some estates are wound up in 12 information and documentation
to 18 months. Others, however, are complex or encounter legal • Review the will carefully to understand the remuneration
complications such as challenges from beneficiaries which can clause; communicate fee structure to beneficiaries
result in the process being drawn out into years. In other words, and costs that are or are not covered under the
every estate will be different and will require different amounts of compensation arrangement
time, effort, and expertise, and careful consideration is necessary • Contemplate and engage a team of professionals, Realtors,
before assuming the task. Financial Advisors, Lawyers, Accountants, IT professionals,
Regardless of the timeframe for settling an estate, the vast family members, Insurance Brokers
majority of the work and effort will usually be spent in the first • Compile a list of the deceased’s assets using the items listed
few weeks with some lingering items such as filing of final tax in the will or any codicil, reviewing all household items,
returns or the disposition of some assets being deferred to the incoming mail (physical and electronic), insurance coverage,
longer term. current and prior tax returns, and consider missing and
dormant assets. Be aware that there may be digital assets
Minimizing Executor Liability and ( i.e., loyalty program rewards, gift cards, crypto currency
accounts, E-wallets, etc.)
Risk Mitigation
• Examine personal computers, laptops, tablets, phone Apps
There is a lot of risk and liability associated with being an Executor. for potential digital and estate assets
As the Executor, you act on behalf of the estate and you may be
• Look for and advertise for creditors
liable for any loss, mistakes or negligence while administering
the estate. • Take pictures and videos of residences and all personal
property during the initial inspection
Here are some pointers to reduce potential liability:
• Protect all assets, including changing the locks of
• Perform your own due diligence before accepting the all real property
Executor appointment
• Notify all insurance providers to ensure insurance coverage
• Determine if the estate is insolvent (liabilities are greater is maintained for all real and personal property
than assets) and review for current and or pending litigation
• Maintain accurate records of all estate transactions and
• Evaluate what you can and cannot do in terms of personal, document all decisions made
regulatory and professional obligations
• Ensure you diarize and meet all tax and estate filing deadlines
• Establish lines of communication with beneficiaries to reduce
• Do not distribute funds until you obtain a clearance
complaints and allegations of bias. Outline the communication
certificate from the CRA, otherwise the Executor could
process, timelines and milestones to manage expectations
be personally exposed
• Obtain a signed release(s) for each distribution
to beneficiaries

EXECUTOR’S HANDBOOK 8
 If you have begun acting as the Executor and then decide to step
back, it will probably prove difficult to renounce the role.

Record Keeping Accepting or Rejecting the Role of Executor

Gathering and maintaining full and detailed records is crucial for After reading this booklet and making enquiries, you may decide
an Executor. There are four important reasons for this: that you are not up to the task. This is certainly understandable
•V
 alue of Assets (Ontario) – As the Executor, there could be where the time commitment is excessive, the nature of the
an immense amount of assets to be valued and distributed. responsibilities too complex, or perhaps family tensions prove to
It is important to compile a complete list of assets and their be problematic. If the Testator is still alive when the appointment
total value for reference. In the assessment of the Estate is made, then you can certainly request that the person name
by the government, a list of assets and total value of Estate someone else. If the Testator has passed away and the Will names
Information may be requested. In the province of Ontario, an alternate Executor, then that person may be able to assume
the ‘Estate Information Return’ form is required. the role. If the Will does not name an alternate Executor, the
legislation may allow for a new Executor to be named. If you have
• Proof of Activities – There will be a substantial amount of
begun acting as the Executor and then decide to step back, it will
paperwork involved in settling an estate, particularly in the
probably prove difficult to renounce the role. In all cases, it is
short term. Bank statements, Investment Account Statements,
highly recommended to consult a competent lawyer.
receipts from government bodies, invoices from outside
professionals, statements from Canada Revenue Agency,
etc. will be involved. As an Executor, you may be called upon Compensation for the Executor and
to provide proof that you have been fulfilling your duties Outside Parties
competently and in the best interest of the estate. The more
Acting as an Executor is an important and time-consuming part
comprehensive and organized the files, the more comfortable
of the proper workings of a smooth estate transition process and
you will be in weathering any scrutiny.
allows for the reasonable compensation of those assuming the
• Tax – When an estate involves business interests, you will duties. Many wills contain a clause stating how or if the Executor
probably be required to file at least two tax returns for the is to be compensated. Yet, such clause often does not exist as the
deceased and the estate, and it is important to have all assumption is that family members will act as an Executor without
relevant information at hand to ensure that all tax laws are being compensated.
complied with and that the deceased and the estate receive
The Provincial/Territorial legislation is rather vague on
any tax advantages available.
compensation and only provides guidelines and uses terms such
•G
 ood Business Practice – There will be numerous duties as fair and reasonable. Many provinces/territories have a different
and responsibilities stretching out over months of time and approach to compensation.
the potentially complex task will be made much easier if a
comprehensive records and filing system is in place. For example, in Ontario, the generally accepted compensation
guideline is based on 2.5% of capital and income receipts and
2.5% of capital and income disbursements of the estate plus an
annual care and management fee of the average value of the
estate of 40 basis points.
Any out-of-pocket expenses realized by the Executor required
in carrying out his or her duties of the estate will be reimbursed
by the estate. We will talk about using outside assistance later,
but provided the services of these professionals are necessary
and reasonable, these costs will be covered by the estate and
paid as incurred.

EXECUTOR’S HANDBOOK 9
Section 3

Overview of an Executor’s Initial Duties

Below is a general overview of some of the key items you will need to address at the initial
stages of your new role as Executor. For further support material and resources such as
actionable checklists, please refer to ‘Section 10: Resources for the Executor’.

n Plan the funeral n Collect documents

Ordinarily, it is the responsibility of the Executor to arrange There are many pieces of hard and electronic documentation
for the funeral of the deceased. This is made easier where the that need to be collected and compiled to allow the Executor to
deceased has provided specific details about the ceremony, carry out their duties effectively. The Executor should seek out
interment, etc. in the Will. In the absence of specific directions, electronic and paper files and review archived documentation.
it is usually prudent to consult with the immediate family Consider having all physical and electronic mail forwarded to a
and perhaps the deceased’s religious guide to determine the different address (physical and digital) that only the Executors
most appropriate approach. The estate will be responsible for have access to. The Executors will need to gain access to the
any funeral costs. If the Executor does not have access to the deceased’s safety deposit boxes to obtain any additional personal
deceased’s cash to pay for the funeral, ensure that the payor property or paperwork; ideally, more than one Executor and
(typically beneficiaries) are reimbursed in a timely manner. family member should be present and a full inventory of the
Obituaries are often produced to run in local newspapers and contents made. The Executor will need to provide the deceased’s
online forums. If there are no instructions on the announcement bank, financial advisors and a myriad of other institutions and
in the Will or letter of wishes consult the family on creating the individuals with legal proof that they are empowered to act as
obituary but be cognizant that the Executor may assume this the Executor.
task. The estate will cover the advertising costs. Ensure to obtain
multiple death certificates (not necessarily copies) from the
funeral home.
The Will. This is the most important document and
every effort must be made to locate it. It will typically
be found among the deceased’s important papers but
n Notify creditors if not, the safety deposit box or the deceased’s lawyer
One of the responsibilities of the Executor is to pay any legal will be likely locations.
debts incurred by the deceased that are outstanding. Some of Proof of Death. There are two different death
these debts might be quite apparent but there may be other certificates that need to be considered. There is the
creditors of which you are unaware. Provincial/Territorial law one from the funeral home and another from the
varies on this point, but generally it is advised to make an province/territory in which the deceased resided.
advertisement in the local newspaper notifying creditors of the Proof of death will need to be presented to a myriad of
death which allows any creditors to bring forward their claim over institutions and individuals over the course of settling
a specified time period. A lawyer familiar with the jurisdiction the estate. The funeral home director can provide the
should be approached. Executor with several original death certificates. Many
organizations will not accept photocopies, so originals
must be obtained. At least one Provincial/Territorial
Death certificate should be applied for since there may
be certain institutions that will require this and do not
accept the funeral director’s document.

EXECUTOR’S HANDBOOK 10
 One of the responsibilities of the Executor is to pay any
legal debts incurred by the deceased that are outstanding.

n Notify beneficiaries
When it has been determined who has an interest in the estate, those parties should be contacted in writing, informing them of your
position and right to act as well as their entitlements. A copy of the Will should be provided if appropriate and where it exists. Where a
beneficiary is either a minor or legally incompetent, their legal guardian should be contacted.

n Freeze accounts and secure assets

As the Executor, you will be assuming control of all of the deceased’s assets. As a result, all the interested parties will have to be
contacted, and in some cases, proof of your capacity as Executor could be requested. As the key controller of assets, here are examples
of accounts that need to be frozen and re-assigned as estate accounts:

Bank Account(s): Any accounts Investment Accounts: The deceased

outstanding will need to be frozen may have had investment accounts
and re-assigned as estate accounts. with various financial institutions.
This will enable you to accept These institutions must be contacted
any estate revenues coming in to be made aware that the account
and make any necessary estate holder has passed away. When
disbursements. You will need to provided with the appropriate
meet the appropriate person at the documentation, they will create an
bank/trust company/credit union to estate account with the trustee having
set up the account and provide you the ability to control the account.
with banking privileges.

Pensions: If the deceased was Digital Assets: The deceased may have
the recipient of a private pension had crypto assets and the Executor
from a previous employer, the will need to determine if they have the
pension administrator needs to be private keys or passwords such that
contacted so they can determine they can access the crypto wallets and
how to proceed. If the deceased left exchange accounts. Furthermore, the
a spouse, then in most cases that Executor needs to understand
spouse will be eligible for a survivor the portability requirements of the
pension, typically some proportion crypto asset and the implications, if
of the original pension. Proper any, of the custodian dealing with a
documentation will be required. Canadian Executor.

n Redirect mail, email and text messages

It is a good idea to have the deceased’s mail (hard and electronic) and text messages redirected to an address and account
that the Executor can easily access. This will save time as well as be a conduit in the determination of the deceased’s affairs and
which people and institutions need to be notified about the death. This may also help the Executor access accounts that require
multi-factor authentication.

EXECUTOR’S HANDBOOK 11
Section 4

The Estate
As an Executor, your primary responsibility is to distribute the deceased’s estate pursuant to
their wishes as laid out in their Will, so it is important to determine what constitutes the estate.
Generally, estate assets are those over which the deceased had control and usually include such things as bank accounts, investment
accounts, real estate and other personal belongings.
On the other hand, there are often assets over which the deceased had control but are not considered estate assets in the legal sense
and are therefore not part of the Executor’s responsibilities. These might include insurance policies, assets held in Joint Tenancy, and
certain financial accounts registered under tax law.
When considering estate versus non-estate assets, it is crucial to appreciate the differences in taxation versus probate. As a reminder,
probate is a Provincial/Territorial tax or fee imposed on the value of an estate. Therefore, non-estate assets are not subject to probate
fees. In many cases, however, assets will be subject to income tax regardless of their estate status, and the Testator’s estate will be
responsible for the tax. Here are a few examples:

• The Fair Market Value of Registered Retirement Savings Plans (RRSPs)

• The Fair Market Value of Registered Retirement Income Funds (RRIFs)
• The Fair Market Value of a Registered Term Annuity where there is no surviving spouse

It is very important to take note of the nature of the assets under review, and tax advice should be sought.

EXECUTOR’S HANDBOOK 12
Section 5

The Will
As a general principal, a person has testamentary freedom in regards to how they choose to
distribute their estate upon their death, and a carefully drafted Will can usually back this up.
However, it is important to appreciate that even the best Wills are often challenged by disgruntled parties.
Here are a few instances where a Will might be declared wholly or partially invalid:

Bequests are made that breach some other area of the law. Family law will generally take precedence
over a Will where the court feels that a family member has been harmed or disadvantaged. This would
certainly be the case if there was a dependent child that was not taken care of through the Will. The courts
will then step in to ensure that the child receives support from the estate. This principal applies to spouses
as well. Family law also recognizes that a person cannot ‘write their spouse’ out of the Will, and the court
will act to ensure that the spouse receives an equitable share of the estate.

Imposition of a Trust. Some parties might try to make the case that the deceased and the estate owed
them something. An example might be where one child has remained at home and abandoned a career
to take care of a parent. If the parent subsequently leaves their estate to someone else, the stay-at-home
child may seek compensation from the estate.

Lack of Capacity. It is assumed under law that a person drafting their Will is of a ‘sound and disposing
mind’. This is rather subjective and will be decided by the court on the facts at hand. Challenges to Wills
often hinge on this and the plaintiffs will attempt to show that the Testator did not really appreciate what
they were doing or perhaps will try to show that the Testator was subject to some sort of coercion or
pressure from other parties.

In any case, if legal challenges are mounted against an estate, the Executor should immediately seek out legal counsel.

EXECUTOR’S HANDBOOK 13
Section 6

Seeking Outside Assistance

Settling an estate is a serious responsibility and must be done competently and professionally
to satisfy the legal requirements as well as the beneficiaries.
This will often require assistance from outside professionals. There is nothing wrong with engaging and paying outside professionals
provided that it can be shown that their expertise was required and that the compensation was reasonable. Even the simplest of estates
can provide legal, tax, or accounting challenges. Professionals you may want to obtain expertise from include:
} Lawyers. Wills and estates are subject to Provincial/Territorial law and there are differences from jurisdiction to jurisdiction. It is
prudent to seek out legal counsel when settling an estate. The more complex the estate, the more likely it is that legal assistance will
be needed. However, even if the estate is simple in nature, there may be a time in the estate settling process when you could benefit
from consulting with a lawyer.
} Accountants. Particularly where an estate involves business interests, it is prudent to consult with an Accountant. The deceased will
often have had an Accountant that they dealt with and this person should be familiar with the deceased’s financial affairs. This should
help to clarify and expedite sorting out their finances. The Executor will probably be required to file at least two tax returns on behalf
of the deceased and the Estate, and an Accountant can provide professional assistance in this area.
} Property Assessors. The need to have asset valuations can arise in various estate settlement situations, for example:
} Estate Equalization. The Testator may specify that a piece of real estate go to one beneficiary and that another beneficiary receives
an equitable share in cash or other assets. In this case, it is necessary to determine the value of the real estate without an actual sale,
therefore, an expert needs to be brought in to estimate the Fair Market Value.
} Tax Settlement. It is assumed under tax law that when a person dies that all their assets are disposed of at Fair Market Value.
Consequently, it is often necessary to get a professional opinion on value when an asset is not going to actually be sold. This could
apply to assets such as real estate, or in a more complicated scenario, a business interest.
} IT Professionals. So much of one’s affairs are conducted electronically and to be able to access the required information and other
assets and/or liabilities may require IT expertise. IT professionals can assist in the aggregation of digital assets, including social media
accounts, points and rewards programs.

EXECUTOR’S HANDBOOK 14
 Even the simplest of estates can provide legal, tax, or accounting challenges.

Contact Information
Accountant
Name
Phone
Email address
Assessor
Name
Phone
Real estate assesor/Business valuator
Name
Phone
Email address
Chartered business valuator
Name
Phone
Email address
Lawyer
Name
Phone
Email address
Financial Institution/Broker
Name
Phone
Email address
Insurance Broker
Company Name
Contact Name
Work Phone
Email Address
Website Address
IT Professional
Company Name
Contact Name
Work Phone
Email Address
Website Address

EXECUTOR’S HANDBOOK 15
Section 7

Tax Considerations
It is a common saying that the only things that are inevitable in life are death and taxes,
and in death the two come together.
As an Executor, you will definitely be encountering the Canada Revenue Agency (CRA) and the Income Tax Act (ITA). As noted earlier,
one of your responsibilities will be to ensure that all valid creditors of the deceased’s estate are satisfied before the estate can be
distributed and the CRA will certainly be at or near the top of the list. Returns for the deceased taxpayer definitely differ from those who
are alive with different rights and obligations. It is best to seek out the assistance of a competent accountant to ensure that the rules are
followed and that any tax advantage is obtained. Below are a few areas of tax for you to consider:

1. Deemed Disposition on Death

Under Canadian tax law, it is assumed that when a person dies, all of their assets have been disposed of at Fair Market Value at that time.
This will, of course, trigger capital gains (or losses) that must be reported for tax purposes. This can have serious tax implications where
the tax cost of an asset (such as real estate or securities) is very low but the current market value is very high. The resulting tax bill can
be large enough that an asset that was intended to be kept in the family must be sold to satisfy the tax bill. There are a few measures
that might be taken to avoid or at least defer this tax liability:
Spousal Rollover
This is one of the most important tax deferral mechanisms available to Canadians. When a legal spouse is alive and the other spouse
dies, it is assumed under tax law that the surviving spouse assumes the asset at its tax cost rather than at its Fair Market Value. This
serves to defer any taxable disposition until the widow or widower dies. Tax law assumes that this ‘rollover’ happens automatically but
there may be situations where it makes sense to opt out of the rollover and recognize the capital gain. This is a strategy that can be used
to soak up unused capital or non-capital loss balances in the hands of the deceased, which are otherwise lost. Consult with a tax expert
to learn more about spousal rollovers.
Principal Residence Exemption
This is one of the most generous tax avoidance measures available to the average Canadian. The rules are very specific, but in general
this tax measure says that a taxpayer may protect the gain on the disposition of their Principal Residence from capital gains taxation.
Consequently, if a person dies, regardless if they have a spouse, they can avoid any tax on the increase in value in their Principal
Residence. When dealing with a person’s estate, the Principal Residence Exemption needs to be considered and reported on the
final return, whether or not there is a taxable portion of the gain on deemed disposition.
Deferral of Tax on Death of a Taxpayer
It is possible to elect to defer the payment of taxes caused by a deemed disposition at death. Ten equal instalment payments are
required in this case. The first instalment must be made by the day the taxes were otherwise due.
Use Form T2075 Election to Defer Payment of Income Tax, Under Subsection 159(5) of the Income Tax Act by a Deceased Taxpayer’s
Legal Representative or Trustee. A tax specialist would be best to assist the Executor with this.
Although interest will be charged by the CRA, this option may provide much-needed relief when high value, low liquidity capital assets
must be disposed of to pay taxes on deemed disposition.

EXECUTOR’S HANDBOOK 16
Utilization of Capital Losses
At the time of death, the deceased may have unused capital losses that are a result of the deemed disposition rules or losses that were
previously incurred and carried forward from previous years. These capital losses can reduce the amount of capital gains included on
the deceased’s terminal tax return, but in the year of death, they can also be used to reduce any type of taxable income (subject to any
capital gains exemption claimed by the deceased). Furthermore, unused capital losses can be carried back to the year prior to death
and applied against any income in that year as well. If the Executor is unsure if the deceased had any unused capital losses, they could
request a history of the deceased’s unused capital losses from CRA.

2. The Tax Returns

As an Executor you will be responsible for filing at least one and perhaps several tax returns on behalf of the deceased and estate
depending on the date of death. In the absence of self-employment income, here are important dates to consider:

} Terminal Returns: The final tax return, also known as the terminal return, must be received by CRA as follows:
•D
 eath Occurred between January 1 to October 31: file by April 30
•D
 eath Occurred between November 1 to December 31: File within six months after date of death (May 1 to June 30).
Note however that balances due for the surviving spouse, who may file at the same time, must be paid on or before April 30
to avoid interest charges.
•D
 eath of a self-employed person: Death Occurred January 1 to December 15: file by June 15. If death occurred in the period
December 16 to December 31, file six months after date of death. Again, balances due for the surviving spouse, who may file at the
same time, must be paid on or before April 30 to avoid interest charges.
•P
 rior filed returns for the deceased: The due dates above remain the same; but Taxpayer Relief Provisions may be applied to file late
or amended returns in the prior 10 years, and to waive penalties and interest in hardship cases.

} S pecial Privileges & Relief Options: Executors who are filing final returns may take advantage of two important special privileges for
deceased taxpayers that will provide additional relief:
•R
 ights and Things Returns. These additional returns can be filed to claim personal amounts in full on each return – terminal and
rights or things – and to split between returns and claim other benefits to the best advantage of the taxpayer on each return. Besides
an additional personal return used to report things like old age security (OAS) benefits due and payable before the date of death,
uncashed matured bond coupons, bond interest earned to a payment date before death, but not yet paid or reported and unpaid
dividends declared before the date of death, there are two other returns that can be filed:
• O
 ptional return for partner or proprietor
• O
 ptional return for Graduated Rate Estate

Excerpted: Knowledge Bureau Advanced Tax Update Course, all rights reserved.

EXECUTOR’S HANDBOOK 17
 Returns for the deceased taxpayer definitely differ from
those who are alive with different rights and obligations.

3. Estate Returns
Where the estate has earned income on assets not distributed to the beneficiaries, a separate trust tax return must be filed. Note
that a Graduated Rate Estate or GRE of an individual is the name of the estate that arose on and as a consequence of the individual’s
death. It can run for no more than 36 months after the death. A T3 Trust return must be filed. Be sure to seek the services of a qualified
professional for assistance.

4. Special Considerations on Terminal Returns

Terminal tax returns differ from ordinary tax returns in various respects. For example, depending on the nature of the income earned by
the deceased, up to an additional three tax returns might be filed that will provide additional tax advantage as explained above. As well,
additional tax advantage can be provided through the treatment of capital losses carried forward. It is advised to seek out the advice of
tax specialists when planning to file final tax returns.

CRA Clearance Certificate

You will definitely want to receive a clearance certificate from the CRA as
proof that the deceased and estate have fulfilled their obligations.

5. Probate Fees/Estate Administration Taxes

Probate fees, at least in theory, represent the administrative costs incurred in settling an estate. In some jurisdictions, it is a flat fee
and in others, it is a percentage of assets. In jurisdictions in which it is a percentage, it is calculated on the “gross value” of the estate.
Gross value of an estate in most jurisdictions is determined by taking the fair market value of all assets of the estate and subtracting
the liabilities that have been secured against real property. Then a percentage rate (which varies between provinces and territories)
is applied against that amount.
Like any estate debt, probate fees must be paid before any estate assets can be distributed. Noted below is an example of how
to calculate the probate amount.
Consider an individual in Ontario who died with an estate value of $500,000 CAD in 2021.

• $0 per $1,000 for the first $50,000 of the estate

• $15 per $1,000 for the remaining $450,000 of the estate
• $ 500,000 - $50,000 = $450,000
• $ 450,000 ÷ $1,000 = $450
• $ 450 x $15 = $6,750
• The total is payable to the Minister of Finance is $6,750

The more common reasons for performing probate planning include:

• Avoid or reduce probate fees • Minimize legal, Executor and trustee fees
• Avoid the delays in the probate process • Avoid public disclosure of estate assets
Given the income tax percentages compared to the probate fee percentages, it typically makes more sense to ensure that
income tax planning has been contemplated and then consider probate planning.

EXECUTOR’S HANDBOOK 18
Section 8

Insurance Considerations
As an Executor you will probably be encountering insurance issues, and, depending on the
nature of that insurance, be directly involved.

Life Insurance
If the deceased had insurance on his/her life, then that coverage was probably revealed by either general knowledge or through the
discovery of an insurance contract when reviewing the deceased’s documents. The Executor’s role in dealing with the insurance will
depend on the nature of the insurance contract:

The estate as beneficiary Some other party as beneficiary $10,000 Tax-Free Death Benefit
If the estate is named as the If some other party is beneficiary, A maximum of $10,000 can be
beneficiary, then the Executor will be then the Executor does not play received tax-free if it is a death
directly involved and is responsible a role apart from informing the benefit from the deceased’s
for contacting the insurance beneficiary and providing proof of employer in recognition of his or
company and providing evidence of death where required. her years of service. If the estate,
death as well as their legal capacity spouse, or beneficiary receive such an
to receive the benefit on behalf of the amount, the Executor should ensure
estate. It should also be noted that that the first $10,000 is indicated as
the insurance benefit would be part being tax-free when the income tax
of the estate subject to probate. returns are filed.

Disability, Long Term Care or Other Personal Insurance Coverage

In the case where other types of insurance coverage are discovered, the Executor will need to contact the insurance providers to inform
them that the insured is deceased.

Property Insurance
For insurance on property such as a home, vehicle, boat, etc., the Executor will need to contact the insurance providers to inform them
of the death and will also need to arrange for interim coverage while the estate is being settled.
Note: These organizations may ask for copies of the Death Certificate, and in some cases the Will, so it is important to ensure several
copies are made.

EXECUTOR’S HANDBOOK 19
Section 9

Distributing the Estate

When all other estate responsibilities and liabilities have been settled, bequests can then be
distributed to the beneficiaries.
However, there are several very important steps that need to be taken before the distribution begins. As previously mentioned,
a Clearance Certificate should already have been received from the Canada Revenue Agency. The Executor is personally liable for
taxes payable so no distributions should be made without that Clearance Certificate. As well:

Prepare a final accounting of the estate settlement Receive signed releases from each beneficiary
process. Each beneficiary should be provided acknowledging their understanding of the estate
with this to provide evidence that you carried out settlement. A lawyer should be brought in to draw
your duties fully and competently. The accounting up the release. If a beneficiary refuses to sign
should clearly lay out any disbursement made the release, legal advice should be sought before
by the estate in the settlement process as well distributing any assets.
as any compensation that the Executor would
be receiving.

Transfer of Assets to the Beneficiaries

Once all the proper measures have been taken, the assets will be legally transferred to the beneficiaries. As the Executor, you will
have assumed control of the estate assets and you will be directly involved in the final transfer process:

Financial Assets Real Estate

These will typically include the amount in bank Depending on the nature of ownership (Joint
accounts and investment accounts at financial Tenancy, Sole Ownership, Tenancy in Common),
institutions. The proper documentation and various various different documentation will be required
tax forms will have to be filled out and signed by but typically Letters Probate will be necessary
the parties. The estate departments at financial evidencing your legal rights as Executor. The Land
institutions will be well-versed in the details of this Registry Office in the jurisdiction where the real
process and should be approached to assist in the estate is located should be contacted to ensure
final transfer. proper legal transfer is made.

EXECUTOR’S HANDBOOK 20
Section 10

Resources for the Executor

While assuming your role as Executor, please refer to the following resources to help you
along the way.

An Executor’s checklist of initial duties

Action Required Done

Plan the funeral

Send death notification letters (refer to Death

Notification Checklist) and consider immediacy

Apply for Probate

Notify creditors

Locate the Will

Notify beneficiaries

Obtain proof(s) of death

Freeze accounts and secure assets

Re-direct the mail

Secure Email and Digital Account Passwords

Request Phone Access PINs

EXECUTOR’S HANDBOOK 21
Resources for the Executor (continued)
Where the deceased was a sole homeowner and the property must be maintained until the
estate is settled, other responsibilities need to be considered immediately, and in many cases,
arrangement for continuing service and payment from the estate need to be established.

Action Required Done

Dealing with pets

Home Insurance

In-home care workers

Maintenance workers

Newspapers

Other home services such as Meals on Wheels

Property Taxes

Social media accounts such as Facebook, LinkedIn,

Twitter, Google+, Instagram...

Utilities (heat, electricity, water, telephone)

Change Locks and secure alarm codes

Dispose of Medication

Secure Valuables

Attribute keys to locks and property

Take a detailed inventory, pictures and videos

Compile items to sell or donate

EXECUTOR’S HANDBOOK 22
Document Checklist
Here is a list of important documents you will need to collect as the Executor of an estate. The following document checklist will help
you keep track of the documents you will need and those you have already obtained or need to obtain.

Document Needed Obtained Document Needed Obtained

Annuity Statements Divorce Documents

Articles of Driver’s License

Incorporation

Bank Account Group Insurance

Statements Contracts

Bank Cards Health Card

Birth Certificate Investment Account

Statements

Business Contracts Investment

Certificates

Business Leases Leasing Contracts

Child Support Life Insurance

Documents Contracts

Credit Card Loan Documents

Statements

Credit Cards Marriage License

Disability Insurance Mortgage Contracts

Contacts

EXECUTOR’S HANDBOOK 23
Resources for the Executor (continued)

Document Needed Obtained Document Needed Obtained

Net Worth Registered
Statements Investment Account
(Individual and Statements
Balance Sheets for
Business or Holding
Companies) 
Partnership Separation
Agreements Documents

Passport Social Insurance

Card

Pension Contracts Tax Assessments

Powers of Attorney Tax Returns

Trust Documents

Proof of Death Vehicle Insurance

• Funeral Home
• Provincial/
Territorial
Property Insurance Vehicle Leasing
Contracts Contract

Property Insurance Vehicle Ownership

Statements

Real Estate Deeds Will

EXECUTOR’S HANDBOOK 24
Contacting the Government – Pensions and Entitlements
Veteran’s Affairs Canada
Where the deceased was a veteran of military service, there may be government financial assistance available. If the deceased was a
recipient of the War Veteran’s Allowance, there may be support available for a surviving spouse or children. The Last Post Fund serves
to provide assistance for eligible veterans who lack the financial resources to pay for an honourable and appropriate funeral and burial.
Coverage is subject to a financial means test. Details of the services provided and eligibility can be accessed at:
www.veterans.gc.ca/eng/bereavement/gravevac

Contacting Service Canada to cancel Canadian Pension Plan (CPP) and

Old Age Security (OAS) benefits
In regards to government pensions and payments, typically there will be two government payments received by an older person,
CPP and OAS. Even if the deceased had not actually been receiving benefits due to their age, Service Canada should be notified.
A useful guide on how to proceed in cancelling OAS and CPP can be found at:
www.servicecanada.gc.ca/eng/services/pensions/cancel.shtml

CPP Death Benefit

The CPP program provides for a lump-sum benefit for pensioners on death of $2,500. This is designed to help pay for final expenses such
as the funeral. The benefit should be applied for in writing within 60 days of death. The funeral director will most likely be very familiar
with the process but the application can be accessed at:
www.servicecanada.gc.ca/eng/services/pensions/cpp/death-benefit.shtml

EXECUTOR’S HANDBOOK 25
Death Notification Checklist
Here is a helpful checklist of important parties that may need to be contacted and notified of the Testator’s death:

To Be Notified Required Done

Accessible Parking Permits

Credit Bureau

Credit Bureau (Equifax)

Credit Bureau (TransUnion)

Credit Card Companies

Deceased’s employer

Department of Vital Statistics

Driver’s Insurance

Driver’s License

Elections Canada

Magazine subscriptions

Passport Office

Private Insurance Companies (Life, Disability, Property, Auto)

Private pension Administrators

Provincial Territorial Health Insurance

Service Canada (CPP, OAS)

Social Insurance Number

Veteran’s Affairs Canada where applicable

In regards to death notification, please refer to these helpful resources: Sample Death Notification Letters
Access pre-written death notification letters available from Snapshots at:
https://docmgt.dynamic.ca/documentdownload/getdocument/1874

EXECUTOR’S HANDBOOK 26
We hope this handbook has given you a better understanding of the responsibilities and
obligations involved in becoming an Executor. It may also have given you an opportunity
to reflect on your own estate and testamentary wishes.
Although planning your estate is an area some prefer to avoid, it is extremely important to take the time to ensure you have a thorough,
well-thought-out and current Will in place. You will be doing your family, and certainly your Executor, a great favour by dealing with this
very important aspect of life.
Ask your advisor to send you the following from Snapshots:

• Digital Estate Planning Guide,

• Estate planning checklist,
• Will planning checklist,
• Funeral checklist,
• Personal and Financial Logbook, and more.

Snapshots: Putting Financial Advice in the Picture

EXECUTOR’S HANDBOOK 27
MOE6034
21DYN034_SN_DF_IN_ExecutorHandbook_EN_V1_2_DOP0921

This publication is intended as a general source of information and should not be considered as estate, tax planning, personal investment
or tax advice, nor should it be construed as being specific to an individual’s investment objectives, financial situation or particular
needs. We recommend that individuals consult with their professional financial or tax advisor before taking any action based upon
the information found in this publication. The information and opinions contained herein have been compiled or arrived at from
sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. While we
endeavour to update this information from time to time as needed, information can change without notice and Dynamic Funds® does
not accept any responsibility for any loss or damage that results from any information contained herein.

© 1832 Asset Management L.P. – All rights reserved. Reproduction in whole or in part of this content without the written consent of the
copyright owner is forbidden. Snapshots™ is a trademark of its owner, used under license.