Meeting the Client
The first issue when you meet an estate client is to ensure that you do not put yourself in a position of conflict. Your client is generally the party contacting you. If a beneficiary contacts you for advice, you should decline to do so until you have determined whether or not you will be acting for the personal representative, otherwise you may not be able to act later for the personal representative. If the proposed personal representative contacts you (i.e., the executor appointed in a will or the person seeking to be the administrator on intestacy), that person will be your client, not the estate.
When you first speak with the potential client, discuss who your client will be, complete a conflicts check before agreeing to act, then ascertain the scope of your retainer.
After you have ensured that no conflicts arise as a result of acting for the personal representative, meet with your client and establish your retainer. Ascertain the scope of your retainer at the outset. For example, the retainer may be limited to obtaining probate or letters of administration, leaving all other duties to the personal representative. Alternatively, you may be retained to perform all duties, from obtaining probate to transferring assets, ensuring the payment of taxes and expenses, attending to final distribution and formal winding-up of the estate with passing of accounts.
The personal representative deals with the winding up and distribution of the estate.
Executors: The executor is the person (although there may be more than one) specifically appointed by the will.
Administrator with will annexed: If there is a will but it fails to appoint an executor, or alternate executor (e.g., if the first executor is deceased or is unwilling or unable to act) the person seeking appointment as the personal representative is known as the administrator with will annexed. The administrator is typically one of the persons entitled to share in the estate and therefore has a vested interest in seeing that the estate is managed well.
Administrators: Where there is no will, those persons seeking to become the personal representatives of the estate will seek letters of administration appointing them as administrator of the estate.
A sample retainer letter is available on the table of contents page of this module.
Personal Representative's Duties
(i) Make funeral arrangements and dispose of remains
Section 5 of the Cremation, Interment and Funeral Services Act sets out a hierarchy of persons entitled to control the disposition of remains. The personal representative named in the will is the primary authority designated to control remains. In practice, it is usually the family who makes arrangements.
Although the written preference of the personal representative is binding under the Act, the preference of others (e.g., a spouse) may be considered if it concerns consent to an organ donation under s. 5 of the Human Tissue Gift Act, or if the intended disposition of the remains would be unreasonable, impracticable, or create a hardship.
(ii) Manage assets
Personal representatives must take steps to safeguard and preserve the deceased's assets. This means they cannot make personal use of the estate assets (e.g., driving vehicles or accessing funds for their own use). However, it would be impractical to prevent a spouse from using co-owned property, such as a house or car.
Advise your client to take the following steps for the care and management of the estate assets:
- Conduct a physical search for cash, securities, jewellery, important documents, and other valuables and arrange for safekeeping of these items.
- If the deceased’s home is vacant, secure it and advise others (e.g., the apartment manager or the police), that the home is vacant. If possible, arrange to check the residence personally or hire a security firm to do so.
- Notify insurers and make sure there is adequate and proper insurance in place for property, vehicles, and valuables, including whether it is necessary to obtain a vacancy permit if the home is vacant. Check for insurance expiry dates. Advise utility and telephone companies.
- If the deceased owned a business, interim management arrangements will have to be made. Sometimes sole proprietorships or small private corporations have value only as going concerns, so it is important to secure effective management to continue operations until the business can be sold. Leases and other obligations of the business may also have to be met.
- Notify the deceased's banks and financial institutions. It can be helpful to develop a relationship with the bank manager to facilitate the payment of fees or obligations related to the estate before probate or letters of administration are granted. For example, the deceased may have ongoing obligations under a lease or guarantee that have to be paid. The bank may also release money for funeral and probate fee expenses prior to the grant of probate.
- Notify Canada Post to redirect mail, if necessary. Canada Post requires a notarially certified copy of the death certificate. It also requires a statutory declaration and an application form, both provided by Canada Post.
- Make arrangements to pay all ongoing periodic obligations of the deceased such as payments for mortgages, leases or other contracts. Alternatively, take steps to arrange for postponement of payments until the estate can raise sufficient funds.
- Make arrangements to collect all rents, mortgages, and other periodic payments owed to the estate.
- Prepare a complete inventory of the estate assets, including personal effects, furnishings, artwork, jewellery and all other tangible and intangible assets. A sample inventory is available on the table of contents page of this module.
- Contact Canada Pension Plan to make an application for CPP death benefits that may be due to the estate. Applications can be obtained at the CPP website. This site links to a CPP survivor’s death benefit application kit (Form ISP-1200). Be aware of time limitations for taking this step.
(iii) Observe responsibilities of a trustee
The personal representative is also a trustee of the estate. As a trustee, the personal representative must adhere to the provisions of the Trustee Act. There may also be separate or additional trustees appointed under the will for a specific purpose, such as acting for an infant or a disabled beneficiary.
(iv) Identify beneficiaries and next of kin
The personal representative must ascertain, identify, and seek contact information for beneficiaries and next of kin. This is important for the preparation and delivery of the notice required by s.121 of WESA (or s. 112 of the Estate Administration Act if the deceased died before March 31, 2014).
You should obtain a complete list of names, addresses, and ages (in order to identify minors) for the deceased’s spouse, children and beneficiaries. (Note that, due to the definition of “spouse” in s. 2 of WESA (s. 1 of the Wills Variation Act), this includes a common-law spouse of more than two years.)
(v) Handle banking
The personal representative may be able to open an estate account. Some bank managers will not open estate accounts until probate or letters of administration are granted. Others will arrange for the deceased’s account to be used for limited purposes, such as funeral expenses, probate fees, or for pre-existing payment obligations. The personal representative may want to consider the utility of an application for an Authorization to Obtain Estate Information under new Rule 25-4(1).
(vi) Keep financial records
The personal representative has a duty to keep records and be ready to account to the estate.
Personal representatives’ records should particularize estate income and expenses that have been incurred. They are entitled to reimbursement from the estate for all reasonable expenses incurred in managing the estate. However, there is still the risk that pre-grant expenses may not be reimbursed (e.g., where there are limited funds in the estate, where beneficiaries successfully challenge the necessity of an expense, or where a personal representative named in the will incurs some expenses but later renounces the executorship in favour of another person). The person who later obtains a grant of probate may take the position that the initial expenses were excessive or unnecessary and refuse to reimburse the original party named in the will. In this case, accurate records are needed to prove the original party's claim.
(vii) Search safety deposit box
If the deceased held a safety deposit box, the personal representative must attend at the institution to search the contents. Where the deceased was the sole owner, a bank employee will accompany the personal representative to open the box and make a list of the contents. If the original will is found in the box, the bank should deliver the will to the person named as executor. Otherwise, the bank will not allow removal of items from the box until a grant of probate or administration is obtained.
If the safety deposit box is owned jointly, the custodians may not allow entry without the co-owner or their personal representative being present.