Although finances are not an
issue anyone wants to think about after the death of a friend or a family member, it is
important. There are many things to think about during this time and they include settling
the estate.
If a will is not drafted, the estate will be
distributed according to provincial laws. Even if the estate is simple with no expected
family or asset complications, the need for a will is essential to prevent family
misunderstanding that can result from its absence.
Through a will, an estate is distributed according
to the wishes of the deceased. The will answers the questions: Who will administer the
property and with how much authority? Who will be the heirs? How much will they receive,
and when? How should unique assets be handled? Who should care for a child?
An integral part of the will is the appointment of
the executor. The executor is the individual chosen to administer the property. This
responsibility includes gathering assets and paying any outstanding debts, including
income and other taxes. Without a stipulated executor a court can appoint someone to
administer the property. This may result in a contest among family members about who will
be responsible for the administration of the property and add further tension at an
already difficult time.
Generally, executors are the children of the
deceased. Due to their interest in the estate, children will not neglect its
administration. Friends are not usually chosen as executors unless they know the
beneficiaries.
Often, more than one executor is chosen. This
provides extra security, if one executor dies either before another is chosen or prior to
the final distribution of the deceased’s estate, or if the person selected is
unwilling or unable to act as executor.
When the estate is settled, an application is made
to the provincial court responsible for the administration of estates. The application is
a request for release from the executor’s duties. Compensation, if any, is determined
as either a fixed fee noted in the will or an amount approved by a judge is determined.
Family members will likely not claim compensation.
The process necessary to settle an estate can be
complex. It is important to answer settlement concerns before a family controversy begins.
A member of the Financial Advisors Association of Canada (Advocis) who
specializes in estate planning can help you with some of the basic concepts and will
recommend appropriate legal counsel depending on the complexity of your situation.
