Executors and Administrators
When an individual obtains a will, he or she will appoint an executor who will administer the individual's estate after they die. If an individual dies without a will (i.e. intestate), the decedent's next-of-kin may apply to be appointed the administrator of the decedent's estate. The responsibilities are the same for an executor and an administrator. There is only one major difference. The executor will distribute the estate according to the terms of the will, as laid out by the individual who created the will. An administrator does not have a legal document which lays out the wishes of the decedent. Instead, the administrator must distribute the estate under the Intestate Succession Act, by dividing the estate among the deceased's closest relatives. Unless you have a will, you cannot change the way your estate is distributed and so, for example, you would not be able to leave part of your estate to a charity, a friend, or to benefit one of your relatives more than others. However, if there is a will the Executor must carry out the instructions in that will.
Being An Executor or Administrator is Voluntary
If you are appointed as the executor of an individual's will, you are not required to take on that responsibility. If you do not feel like you have the time to dedicate to this task, you must sign a renunciation form that gives up your right to be appointed as executor. In many cases, a will will appoint at least one alternate Executor in case the first choice decides they do not want to accept the responsibility or cannot undertake the task because of illness or other commitments. This is not an issue with administrators, as you must voluntarily apply to become the administrator of a deceased individual's estate. Executors and administrators are entitled to a fee that reasonably compensates them for the time taken to manage and distribute the estate.
An executor must obtain a Grant of Probate from the Manitoba Court of Queen's Bench (Court), which establishes that the decedent's will is valid and that the appointed executor has the authority to administer the estate. In order to obtain the Grant of Probate, the executor must file the decedent's original will, affidavit of execution, and any codicils to the will with the Court. The executor must pay any probate fees at the time of filing. For a large estate that contains complex assets, executors typically hire legal counsel to assist with the probate process. If there is no real property or the estate contains $10,000, the executor may not need to obtain a Grant of Probate but may instead be able to deal with the property in a simplified way.
When an individual dies intestate, next-of-kin residing in Manitoba may apply to the Court to be appointed as the administrator of the decedent's estate. The next-of-kin must be a relative to the decedent. The Intestate Succession Act limits "next-of-kin" to the decedent's spouse or common-law partner, adult child, parent, sibling, niece or nephew. If the estate is worth $10,000 or less, the applicant must file an application for an Administration Order and pay a probate fee to the Court. If the estate is worth over $10,000, the applicant must apply for Letters of Administration, which designate the administrator of the decedent's estate. Individuals applying to become the administrator of an estate may have to pay a bond to the court, ensuring that the individual will perform his or her duties.
Property and Debts of the Estate
Both executors and administrators are legally responsible for the assets contained in the estate. This includes real property, personal property, legal documents, bank accounts, and credit cards. Upon being appointed, executors and administrators must immediately secure all of the assets of the estate. Additionally, executors and administrators must properly insure all of the estate's valuable assets. Also, it is important to determine the value of the estate assets for purposes of distribution.
The first task of an executor or administrator is to pay the estate's debts. These debts must be paid before the executor or administrator can distribute the estate to the heirs or beneficiaries of the estate. While the executor or administrator may be able to determine some creditors from the decedent's paperwork or legal documents, there may be other unknown creditors who also must be paid. In order to determine whether there are unknown creditors, the executor or administrator must put a Notice to Creditors in a newspaper in the city where the decedent was living at the time of his or her death and in the Manitoba Gazette. This serves to officially notify any creditors that the debtor/decedent has died. The creditor must send a claim to the executor or administrator regarding the amount of money owed to them.
The Notice to Creditors provides a cut-off date for all creditor claims. After the cut-off date, the executor or administrator must review all of the claims and determine whether there is sufficient evidence to support each claim. If the claim is determined to be valid, the executor or administrator will pay the claim out of the estate. It is possible that the heirs or beneficiaries will not receive anything from the estate if the entirety of the estate is used to pay creditors.
Filing Tax Returns
The executor or administrator also must file a tax return for the decedent that includes all income earned by the decedent until his or her death. The Canada Revenue Agency will then issue a Clearance Certificate to the executor or administrator which states that the decedent has paid all taxes owed. This may take several months. The executor or administrator may distribute some estate assets before receiving the Clearance Certificate but must retain enough assets in the estate to pay any potential unpaid taxes owed. If the Executor releases the money to the beneficiaries without paying the Estate debts or taxes, the Executor may become personally liable for those debts.
After the estate's debts and any unpaid taxes are paid, the executor or administrator may distribute the estate assets. This is relatively simple for an executor, as they must distribute the assets according to the terms of the will. An administrator must distribute the estate according to the Intestate Succession Act, which will require the administrator to determine and locate the decedent's heirs. After distributing the estate, the executor and administrator must give an accounting to all beneficiaries or heirs that details how the estate was distributed. If the beneficiaries or heirs approve of the accounting, they will sign a release which allows the executor or administrator to be paid their fee.
The role of executor or administrator carries with it many duties and responsibilities. It is not a task that should be taken lightly, as it will require time, effort, and diligence. However, it can be very rewarding to fulfill the wishes of your loved one or friend by administering his or her estate.
General Information
This article contains general information only and is not meant as professional advice. Each situation is different. If you have been named as an Executor in a Will or are considering applying to become the Administrator of an Estate where the deceased did not have a will, it is best that you first consult with a lawyer so that you fully understand the rights and responsibilities of your role. In addition, it is advisable to retain the services of an accountant to ensure that the Estate taxes are filed correctly and that you take advantage of all deductions that may be available to the Estate.
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