When a person passes away, they may leave behind an “Estate”, which is a collection of their assets and liabilities. Their Estate will need to be administered appropriately and in accordance with a Will. If there is no Will, a person’s Estate would then be administered in accordance with the Succession Law Reform Act. The responsibility of administering an Estate falls on an individual called an “Estate Trustee”. An Estate Trustee can be appointed either by a Will or by the Court if there is no Will. It is important to appoint an individual who is responsible and reliable to fulfil this role as they have a fiduciary responsibility to the beneficiaries.
Executor vs Trustee
An Estate Trustee is often also referred to as an “Executor”. An Executor refers to an individual appointed under the Will to administer the Estate and ensure the wishes and instructions of the Will are carried out. Some responsibilities of an Executor include paying the debts of the deceased, arranging the funeral, and gathering the deceased’s assets. A Trustee, on the other hand, refers to an individual who is responsible for distributing the residue of the trust to the beneficiaries. Currently in Ontario, Executors are called Estate Trustees and have the responsibilities of both an Executor and Trustee.
Fiduciary Duties of an Estate Trustee
Estate Trustees have a fiduciary duty to act in good faith, with honesty and reasonable care, and in the best interests of the beneficiaries. It is a high standard and includes:
- Paying off all debts, taxes, and expenses of the Estate so that the assets can get distributed productively;
- Not acting in a self-interested manner and using the Estate’s assets for personal benefit;
- Administering the Estate in an efficient and in a timely manner;
- Managing the Estate with a degree of skill and care;
- Keeping account of all involvement with the Estate; and
- Acting in accordance with the instructions of the Will.
Other Responsibilities of an Estate Trustee
Aside from their fiduciary duties, Estate Trustees also have other responsibilities, including:
- Hiring an Estates Lawyer: Estate Trustees may hire an Estates Lawyer if they choose. While hiring an Estates Lawyers is not an obligation, these lawyers can assist with the legal aspects of administering the Estate.
- Finding the original Will: the Will provides key information about the identities of the beneficiaries as well as how the deceased’s Estate is to be distributed. It is crucial that the Estate Trustee locates the original Will so they can manage the Estate according to the deceased’s instructions and wishes. A copy of a Will would not be accepted by the courts.
- Applying for a Certificate of Appointment if necessary: a Certificate of Appointment gives the Estate Trustee the authority to manage the Estate and is granted by the Court upon successfully filing for probate.
- Identifying what the assets of the Estate are and their value: not all Estates will require a Certificate of Appointment. Whether an Estate Trustee needs to apply for a Certificate of Appointment will depend on the assets of the deceased. An Estates Lawyer can help Estate Trustees navigate this. An Estate Trustee must also determine the value of the assets which is important for tax purposes.
- Making the necessary funeral and burial arrangements: the Estate Trustee has the sole responsibility and discretion of planning funeral and burial arrangements. These arrangements are usually paid for by the Estate of the deceased.
- Identifying the beneficiaries of the Will: the beneficiaries are the individuals who are designated in the Will to receive the Estate. The Estate Trustee is responsible for ensuring the Estate is distributed to all the beneficiaries in accordance with the Will.
- Distributing the assets of the Estate to the beneficiaries: the Estate Trustee is responsible for distributing the assets of the Estate to the listed beneficiaries in accordance with the Will.
Compensation
Acting as an Estate Trustee can be challenging and time consuming. Ontario legislation recognizes this and allows Estate Trustees to receive compensation for their hard work. Pursuant section 61(1) to the Trustees Act, “a trustee, guardian or personal representative is entitled to such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate”. A Will may also provide directions as to how much the Estate Trustee should be paid.
Estate Trustee compensation is calculated based on the following factors:
- The size of the Estate;
- The care and responsibility involved in managing the Estate;
- The time and efforts the Estate Trustee put in to carry out their duties;
- The skills and abilities of the Estate Trustee; and
- The results of the administration of the Estate.
Contact Blackburn Lawyers
Acting as an Estate Trustee can be challenging. Our lawyers at Blackburn Lawyers can help you with various Estates matters. You can book a consultation by calling 905-884-9242 or filling out an online consultation request here.
Disclaimer: Please be advised that this blog is intended to act as a general overview on a legal topic and does not constitute legal advice. Each legal issue is independent and unique and in order to get qualified legal advice we recommend you consult with a Richmond Hill estates lawyer. Please note that lawyer-client relationships are only established after you have signed a retainer agreement with our firm.
Written by Meera Pahwa
* Please note that the information in this article is not intended as legal advice, but rather as a general overview on the subject. If you are seeking legal advice, please consult with a lawyer.
