Oct 24, 2022
How does an executor sell a car?
Selling a car belonging to someone who is deceased can be tricky, in this post we outline how an executor will sell a car belonging to the deceased.
Download our free probate checklist. Download now
No one gladly accepts the responsibility of being an estate executor. It means you have to handle the financial details that a deceased person left behind, and that can get messy. When someone dies, they rarely have all their affairs tied up nicely with a bow on top.
In order to understand the responsibilities that come with being named an estate executor, we’ve broken down the seven most crucial steps that every estate executor will have to carry out.
Let us introduce you to Aesha. Aesha is a 40-something professional whose father has passed away after a long illness. Aesha’s father, being a widower, had appointed Aesha as the executor of his estate in his will. This means that Aesha now has the following responsibilities and tasks she must carry out in order to ensure that her father’s financial belongings get distributed in the way he envisioned it, while ensuring that all taxes and debt are taken care of:
We regularly share relevant information about wills and estates.
The most important document needed for the entire probate process, as well as for the executor themselves, is the deceased’s will. Aesha’s father left behind a will where he specified that Aesha would be named the executor of his estate, which certainly makes things a bit easier, or as easy as they can be when dealing with the death of a family member and the management of their estate. Aesha’s first order of business would be to submit her father’s will to the probate court, so that the probate process can begin.
Aesha will also need to have access to deeds, partnership documents, insurance policies, or other important papers. Ideally, her father would have put those together for her before his death so she can find them easily once the time comes. But back to the will. Once Aesha submits her father’s will to probate court, the court will review it and decide whether Aesha indeed can act as the legitimate executor of her father’s estate. Only once that decision has been made can Aesha continue acting as executor.
But what happens if Aesha’s father has left no will? Then the process becomes a bit more complicated, because If there is no Will, then a legal process will be initiated to appoint an executor to settle the estate and decide how to distribute it. The appointed executor will most likely be the closest of kin. This process is likely to be more expensive than the probate process, and also shows why it’s so important that a will be drawn up in the first place.
Once the will is evaluated by the probate court, the court will appoint an executor. Since Aesha’s father named her as his executor in his will, Aesha will be named the official executor unless the beneficiaries object, which can lead to separate lawsuits.
It’s important that Aesha receive official authorization from probate court to act as executor for her father’s estate, since many of the institutions holding her father’s assets, such as banks, investment accounts, or insurance companies, won’t hand over the information Aesha needs without this certification.
Aesha can’t just empty out her father’s bank account and transfer the funds to her own chequing account. She’ll need to set up an estate bank account, where she can transfer her father’s money and use it to pay any outstanding debt or bills. This account will also ultimately be used to distribute funds to the named beneficiaries, which is why it’s important to have the account in place pretty soon after being named executor.
As executor, it is now Aesha’s responsibility to make funeral arrangements for her father and send out notifications of death, including to service providers such as her father’s landlord, the utility company he paid, and to insurance providers. She’ll also have to notify the government regarding any benefits her father may have received, such as a pension or unemployment. Aesha will also have to cancel things like credit cards, phone plans, and subscriptions.
Now Aesha has the difficult job of gathering all of her father’s assets and documenting them so that they can be distributed to her father’s beneficiaries, as stipulated in his will. The assets can range from bank and investment accounts, insurance policies, or safe deposit boxes to heirlooms such as jewelry and artwork or property deeds. The value of the assets will then need to be evaluated.
There may also be assets that are not included in the deceased’s will, which is why this step is so tedious and sometimes requires some detective work. It’s also an emotionally exhausting stage to be in, which is why it can be incredibly helpful for someone like Aesha to seek help with a professional expert.
This is another highly unpleasant part of an executor’s job. Aesha will have to file a number of returns, including any outstanding tax returns her father may have had (including a terminal return). She’ll also have to submit an estate income tax return if any assets—such as investments—earn income during the probate period.
Let’s say Aesha’s father also owned property in the United States. Depending on what state that property was in, and depending on the value of that asset, Aesha may also have to deal with paying an estate tax. She’ll also have to pay for provincial probate taxes. This tax is based on the total value of the assets, and the rate charged varies between provinces, with some provinces having a maximum fee. All provinces except for Alberta and Quebec levy potentially significant probate taxes.
Once all of the paperwork is done and all loose ends are tied up, Aesha can submit a summary to probate court detailing all the actions and transactions made on behalf of the estate. Only then can Aesha’s father’s assets can be distributed as he saw fit. This can include bequeathing funds to his children, family, and friends, donating assets to charities, or creating trusts for individuals or corporations. The will usually also stipulates how these funds will be managed.
Use our 12-step blueprint to probate, avoid settlement delays, and settle estates sooner.Download yours for free!