role of the executor - what you need to know · duties and responsibilities of an executor the...
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RBC Estate and Trust Services
ROLE OF THE EXECUTOR - What you need to know
Janice Domaratzki
Investment Advisor
RBC Dominion Securities
Claudia Morrison
Regional Trust Advisor
RBC Wealth Management
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Agenda
1) Wills
2) Executor Duties & Responsibilities
3) New Rules for Executors
4) Selecting Your Executor
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What happens if …
You die without a Will?
- Your estate will be administered and
distributed under the provincial
intestate succession legislation where
you lived.
You become incapable without a
Power of Attorney for Property?
- All your financial activities will be
stagnant until a proper Attorney is
appointed, through a court application
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Will Planning
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Where to begin?
Before you draft your Will – consider…
Family situation
Needs of
beneficiaries
Objectives and
wishes
Types of assets
Registration of
assets
Choice of
Executor
Legal obligations
Tax and probate
issues
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The composition of your assets
“In” your estate “Outside” your estate
Probatable
Assets solely in the
Deceased name
Joint assets
Named beneficiary – life
insurance, RRSP’s and
RRIF’s
Unique assets
TFSA
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Duties and responsibilities of an Executor
The overall role of the executor is to administer and settle the estate of the
deceased according to their final wishes as expressed in the Will according to
provincial law:
• Funeral arrangements and secure valuable assets
• Locate, value and collect all estate assets
• Apply for probate
• Pay off any debts
• Notifications, cancellations, dealing with real estate
• Understand the risks with any investments and take action
• Prepare and file Estate Information Return with Ministry of Finance
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Duties and responsibilities of an Executor
• Communicate with beneficiaries – regular accounting and updates
• Pay or deliver any legacy gifts
• Make distributions to the residual beneficiaries
• Keep a good record of all accounting transactions
• Prepare and file tax returns
• Obtain Clearance Certificate
• Seek professional assistance when needed (lawyer, accountant, professional
executor)
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New Rules for Executors
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What Changed & Why Were Changes Required?
• The Estate Information Return (EIR) was created by the Ontario Ministry of
Finance
• Prior to January 1, 2015, detailed information regarding estate assets was not
required when applying for a probate certificate.
• There was no requirement to provide supporting documentation to back up the
asset value reported. Consequently, some believe that asset values were
being conservatively estimated, and in some cases, significantly under
estimated.
• The EIR includes:
• Information about the deceased and the executor
• List and description of each estate asset (some estate assets such as
household contents can be grouped together).
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What Information Is Included In An EIR Form?
Assets that should be included:
• Real estate in Ontario (less encumbrances)
• Bank accounts
• Non-registered investments (e.g. stocks, bonds, trust units, options)
• RRSPs, RRIFs, TFSAs if proceeds pass through the estate (e.g. no named
beneficiary other than ‘Estate’)
• Vehicles and vessels (e.g. cars, trucks, boats, ATVs, motorcycles)
• All property of which the deceased had beneficial interest even if legal title was
held by someone else
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What Information Is Included In An EIR?
Assets that should be included:
•Jointly owned assets without a right of survivorship (e.g. joint tenants in
common - JTIC)
•All other property, wherever situated, including:
• Goods
• Intangible property
• Business interests
•Insurance, if proceeds pass through the estate (e.g. no named beneficiary other
than ‘Estate’)
•A calculation of applicable probate tax is also included
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What Assets Are Excluded from the EIR?
• Real estate outside Ontario
• Canada Pension Plan (CPP) death benefits
• Assets that pass outside of the estate including:
- Jointly owned assets with a right of survivorship (JTWROS)
- RRSPs, RRIFs, TFSAs with a named beneficiary other than ‘Estate’
- Insurance proceeds paid to a named beneficiary other than ‘Estate’
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Concerns of the Executor
▪ Acceptance of personal responsibility in
case of an error
▪ Criticism from family members and heirs
▪ Dissatisfaction among family members
excluded from the Will
▪ Conflicts of interest
▪ Difficulty in administering due to travel
distance, time constraints or insufficient
knowledge
▪ Difficulty in taking care of financial issues
during a difficult time
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Choosing your Executor
• Trustworthy, and can reliably carry out the instructions in your Will
• Capable of making fair decisions and balancing conflicting interests
• Willing and able to put in many hours of work over two or more years
• Knowledgeable in legal, tax and administrative issues
• Residency implications
• Multiple executors
• Likely to survive you
• Communication skills
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Things to consider
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Estate Planning – Are You Prepared?
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Will we out
live our
money?10 years
past healthy
- POA
Consolidate
today to
help
tomorrow
Gifting now
vs.
inheritance28% plan to
leave an
inheritance to
a charity
Tax efficient
wealth
transfer
Financial
Plan Now
60% haven’t
spoken to an
advisor about
an inheritance
plan
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Questions?
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Disclaimer
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This document has been prepared for use by the RBC Wealth Management member companies, RBC Dominion
Securities Inc. (RBC DS)*, RBC Phillips, Hager & North Investment Counsel Inc. (RBC PH&N IC), RBC Global Asset
Management Inc. (RBC GAM), Royal Trust Corporation of Canada and The Royal Trust Company (collectively, the
“Companies”) and their affiliates, RBC Direct Investing Inc. (RBC DI) *, RBC Wealth Management Financial Services Inc.
(RBC WM FS) and Royal Mutual Funds Inc. (RMFI). Each of the Companies, their affiliates and the Royal Bank of
Canada are separate corporate entities which are affiliated. *Members-Canadian Investor Protection Fund. “RBC
advisor” refers to Private Bankers who are employees of Royal Bank of Canada and licensed representatives of RMFI,
Investment Counsellors who are employees of RBC PH&N IC and the private client division of RBC GAM, Senior Trust
Advisors and Trust Officers who are employees of The Royal Trust Company or Royal Trust Corporation of Canada, or
Investment Advisors who are employees of RBC DS. In Quebec, financial planning services are provided by RMFI or
RBC WM FS and each is licensed as a financial services firm in that province. In the rest of Canada, financial planning
services are available through RMFI, Royal Trust Corporation of Canada, The Royal Trust Company, or RBC DS. Estate
and trust services are provided by Royal Trust Corporation of Canada and The Royal Trust Company. If specific products
or services are not offered by one of the Companies or RMFI, clients may request a referral to another RBC partner.
Insurance products are offered through RBC WM FS, a subsidiary of RBC DS. When providing life insurance products in
all provinces except Quebec, Investment Advisors are acting as Insurance Representatives of RBC WM FS. In Quebec,
Investment Advisors are acting as Financial Security Advisors of RBC WM FS. The strategies, advice and technical
content in this publication are provided for the general guidance and benefit of our clients, based on information believed
to be accurate and complete, but we cannot guarantee its accuracy or completeness. This publication is not intended as
nor does it constitute tax or legal advice. Readers should consult a qualified legal, tax or other professional advisor when
planning to implement a strategy. This will ensure that their individual circumstances have been considered properly and
that action is taken on the latest available information. Interest rates, market conditions, tax rules, and other investment
factors are subject to change. This information is not investment advice and should only be used in conjunction with a
discussion with your RBC advisor. None of the Companies, RMFI, RBC WM FS, RBC DI, Royal Bank of Canada or any
of its affiliates or any other person accepts any liability whatsoever for any direct or consequential loss arising from any
use of this report or the information contained herein. ® Registered trademarks of Royal Bank of Canada. Used under
license. © 2016 Royal Bank of Canada. All rights reserved.