Estate Administration in 500 Words … or Not – Part 4

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This is the fourth and final portion of the list.  Even taken together, the four parts may not be a complete list – every estate is and will be different from every other.  Some are fairly straightforward if you are familiar with what you are doing as executor but other estates involve business interests, collections and other large assets handed down between generations.  Sometimes proper estate planning has occurred, other times it has not.

Now, let’s finish the list:

ESTATE RETURNS – prepare annually for any income (rental income, interest, etc.) made by the estate for each year after death until the estate is wound-up

FOREIGN TAX RETURNS – consult competent professional if deceased was a citizen of another country or foreign assets are involved

BUSINESS INTERESTS – if deceased was the sole/controlling shareholder of a business take control and ensure operations continue or obtain/hire manager – consult partnership/shareholders’ agreement for provisions regarding death of a partner/shareholder – determine estate’s entitlements/liabilities – secure all physical assets/ documents – ensure all debts paid/responsibilities fulfilled – if deceased owned rental property, confirm that rents are up-to-date and continue to be collected – ensure services are maintained – If deceased held a mortgage on another person’s property advise that all future payments are made to you (as executor) – consult lawyer for additional information/guidance

TRANSFERRING, SELLING AND DISTRIBUTING ASSETS – create detailed list of assets to be transferred, sold or distributed in accordance with the Will – the Wills Variation Act allows any spouse or child of the deceased to apply to the court to vary/change terms of the Will (within 6 months starting of grant of probate) – therefore wait before distributing any assets or obtaining releases

REAL PROPERTY – consult lawyer re transfer of real property – if property (house or land) is held in joint tenancy have title transferred to the name of the survivor only – if not, transfer real property ownership to executor – notify Municipal Property Assessment Corporation – sell/ transfer real estate according to the Will – cancel insurance on real estate upon transfer and after obtaining receipt from beneficiary

PERSONAL PROPERTY – review Will regarding distribution of personal property – determine best method for selling any personal property to be sold – sell or transfer vehicles and cancel insurance upon transfer and remove licence plates – sell/transfer stocks and bonds according to the Will – transfer or cancel all memberships (as applicable)

DISTRIBUTING ASSETS – determine scheme for distribution of assets – set aside reserve fund for taxes, debts, professional fees and executor’s compensation – distribute items according to the Will – consult beneficiaries regarding in specie (item instead of cash conversion) distribution where appropriate and obtain receipts – prepare cheques for payment of legacies and obtain receipts from beneficiaries – set up any testamentary trusts – arrange for ongoing review of investments and ongoing compliance within terms of trust (ensure terms do not disqualify disabled beneficiary from receiving government assistance) – submit full accounting of estate administration, estate accounts and proposed executor compensation to beneficiaries and get releases from beneficiaries – advise beneficiaries to obtain independent legal advice when reviewing final report – cancel insurance on personal property after selling or transferring and obtaining receipt from beneficiary

CLEARING THE ESTATE – arrange auction of sellable unwanted items – donate leftover items to charities – discard debris and non-donatable items

FINAL DUTIES – pay remaining professional fees and disbursements and executor’s compensation – prepare final cheques for distribution of any remaining funds to beneficiaries and obtain receipts – close estate bank account after confirming all cheques have cleared – file all records, accounts and communications in a safe place

Well, that’s it.  Seems easy doesn’t it?  Always remember that help is available from many sources if you need it – do not be afraid to ask.  Reasonable expenses are payable by the estate.

Thank you for reading, sharing, commenting on and liking my entries.  I have a couple of projects that I will be working on over the next few months so all will be quiet from me blog-wise for the next little while.

All the best,
Penny

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Estate Administration in 500 Words or So – Part 3

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Below is a continuation of the last two months’ “Estate Administration in 500 Words or …”.  The title is meant to illustrate that those very short (30 item) lists that are available on the internet do not contain enough information to properly do the job.  We’re only just now getting to the application for probate, the estate information return and the final tax return.

ASSETS – list all real and personal property held worldwide – include real estate, land, timeshares, automobiles, airplanes, boats, artwork, furniture, household goods, jewellery, patents, trademarks, corporations and partnerships – collect any and all debts owed to the deceased – determine if there any outstanding assets from another estate or trust – include assets such as pension plans, DPSPs or RRSPs – transfer title of real estate to either the estate or to your name as executor – consult lawyer if there is any foreign or out-of-province real property – notify any foreign jurisdiction if deceased receive pension (e.g., Social Security – U.S.A.), cancel entitlement and make claim for death benefit, if applicable – keep a record in Estate Account of any interest earned, dividend paid or asset sold

LIABILITIES – notify all mortgage holders (or any holder of any other encumbrance) – subtract only the actual value of any encumbrance on real property from the assets for determining the estate administration tax

DEBTS AND EXPENSES – pay funeral expenses first, then income tax owed before any other debts – arrange payment of mortgage(s), rent, condominium fees, property taxes, utilities – arrange payment of legal, accounting and administrative fees – arrange payment of credit cards, personal loans, lines of credit, and any amounts owing to other creditors – advertise for creditors

CERTIFICATE OF APPOINTMENT OF ESTATE TRUSTEE (“probate”) – determine whether probate is required (real property, shares in a publicly-owned company, large amounts in a financial institution) – consult lawyer if unsure – requires original Will and any codicil, list of deceased’s assets with values as at the date of death, and beneficiaries’ information – consult lawyer for guidance and correct forms – calculate and pay estate administration tax on value of estate assets: $5.00 for every $1,000, or part thereof for first $50,000, plus $15.00 for every $1,000, or part thereof, over $50,000 (Ontario)

ESTATE INFORMATION RETURN – determine due date for Estate Information Return (must be received by Ministry of Finance within 90 calendar days after certificate of appointment issued – include full details of real estate in Ontario (less encumbrances), bank accounts,  investments, vehicles and vessels, all property of the deceased which was held in another person’s name,  all other property including goods, copyrights, patent,  business interests, and insurance proceeds (if no named beneficiary)

CANADA REVENUE AGENCY – obtain “What to do when someone has died” from CRA website – contact a competent professional if unsure/uncomfortable preparing tax returns – advise CRA of date of death – stop payment or transfer to a survivor if the deceased was receiving GST/HST credit, Working Income Tax Benefit, Canada Child Tax Benefit and/or Universal Child Care Benefit payments, or other payments

FINAL TAX RETURN(S) – locate last tax return filed by the deceased – determine due date for the final and any outstanding tax returns – find relevant material such as medical and charitable receipts – prepare and file final income tax return – file any outstanding tax returns within 6 months of the date of death – request and obtain Tax Clearance Certificate (and GST Tax Clearance Certificate if deceased was a GST registrant) after the Notice of Assessment has been received

We haven’t quite finished up the tax area and have yet to distribute anything to the beneficiaries.  As you can see, the administration of an estate is not as simple as 500 or even 1,500 words.  See you next month for the fourth, and final, part of the list.

 

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Estate Administration in 500 Words or More – Part 2

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Below is a continuation of last month’s “Estate Administration in 500 Words or Less” entry – a title not meant to be serious.  As you can see, a short list is not enough.

BENEFICIARIES – make a plan to provide beneficiaries with regular status updates and progress reports

SERVICE ONTARIO – apply for a death-certificate, refunds of driver’s licence fee and vehicle licence sticker – cancel health card – cancel accessible parking permit

SERVICE CANADA – advise of date of death – cancel Social Insurance Number and destroy SIN card – return passport with letter indicating whether cancelled passport should be returned – return any CPP/OAS benefits received after death – apply for CPP death benefit, CPP survivor pension, CPP children’s benefit, CPP allowance for the survivor, Guaranteed Income Supplement (where applicable)

VETERAN’S AFFAIRS CANADA – contact if the deceased was a member of the Canadian Forces

INTERNATIONAL – cancel foreign passports, foreign social security numbers

LOCATE AND KEEP SAFE – birth, adoption, marriage and/or divorce certificate(s) – prior income tax returns – investment information – real estate deed(s) and mortgage documents – any other form of identification found

LOCATE AND CANCEL – all credit cards and request final billing summary – check for insurance to cover the balance – transfer Air Miles, frequent flyer and other loyalty reward points to the estate – cancel cable, telephone, internet – ensure utilities are maintained per home insurer’s instructions – notify clubs and professional memberships and request refunds due – cancel magazine/newspaper subscriptions and request refunds due

BANKING/FINANCIAL – request transfer to any surviving joint tenant – notify financial institutions and request up-to-date summaries of all accounts – cancel bank cards, chequebooks and passbooks – notify credit companies of death – search for unclaimed bank accounts – check if RRSPs or RRIFs are payable to the estate or named beneficiary – transfer/redeem Canada Savings Bonds – contact issuer of GICs/securities for instructions regarding transfer/re-registration – review investment portfolio and make appropriate decisions regarding investments

LIFE AND OTHER INSURANCE – locate all insurance policies, confirm policy amounts and request benefits be paid – check if any annuities are payable to the estate or named beneficiary

EMPLOYER – notify current/former employer and arrange for payment of wages, pension or insurance proceeds and any other benefits due

DIGITAL ASSETS/SOCIAL MEDIA – check User Agreement and Terms of Service to determine whether assets can be transferred, deleted or have restrictions regarding termination – locate information regarding digital accounts, user names and passwords

HOME COMPUTER/TABLET/CELLPHONE – review instructions regarding deleting files, emails/other confidential information, personal or family digital photos, domain registrations, web sites and blogs, email accounts

ESTATE INVENTORY – create detailed listing of all estate assets and liabilities with values for both real property and personal property as at the date of death – determine original purchase price for any capital property – identify joint assets with right of survivorship, items with named beneficiaries and assets held outside Ontario – determine whether any assets are missing – collect debts owed to the deceased – ensure that all debts are up-to-date and valid before paying and obtain receipts for all debts paid

MISCELLANEOUS – redirect mail to your address – notify appropriate party if deceased leased residence and arrange to sublet or terminate the lease and remove all belongings – consult your lawyer if deceased was: executor of another estate at the time of death, beneficiary of another estate at the time of death

Again, I’m out of room and we still have to deal with probate, tax returns, clearance certificates and other matters.  It’s not as simple as 500 or even 1,000 words.  See you next month for the next part of the list.

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A Short Story – The Tea Caddy

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Coffee came to Europe in the 17th century – first in Italy (Venice – 1629),then England (Oxford and London – 1652).  Its arrival was closely followed by tea.  Coffee houses served all manner of hot beverages (coffee, tea, chocolate) and were popular meeting places.

Tea arrived from China in large porcelain containers.  Although tea, as a beverage, was primarily served in a coffee house an individual could purchase the leaves to brew at home – if they could afford it.  Tea was very expensive to buy and heavily taxed.  By 1700 lockable tea caddies had become fashionable and were created to not only preserve freshness of the tea itself but also to prevent its theft.

The earliest tea containers were from China, usually blue and white porcelain or glazed ceramic, and similar in shape to a ginger jar.

The term “caddy” was taken from the Malay kati or cati – a unit of weight equal to about 1½ lbs – it does not relate to the shape, purpose or capacity of the tea caddy itself.

A tea caddy could be any form – canister, jar, box or any other container – and made from various woods (walnut, mahogany, satinwood, rosewood), metals (pewter, brass, copper, silver) or other materials (tortoiseshell, cut glass, papier-mâché).  They were often engraved or decorated with inlays of ebony, silver or bone.

The use of the stoppered jar waned as boxes became popular.  It was customary for the lady of the house, rather than one of the servants, to hold the key.

The interior of tea caddies generally had two lidded compartments to keep two different teas (one green and one black) separate, but there are many examples of caddies with a dish between the compartments in which sugar, also expensive at the time, could be stored.

In the 19th century tea became less expensive due to its widespread cultivation in India and the importation of tea from India soon exceeded that from China. With time, lockable tea caddies became less important.

The picture above shows an antique (c.1860), dome top, burled walnut (burr walnut in the UK) box with two lidded, zinc-lined interior tea caddies.  The decorations are brass.

As an aside, in 1908 a New York tea merchant named Thomas Sullivan created small silk bags to encase tea samples.  Some clients thought this “tea bag” was a new form of infuser and thus brewed their tea this way.  Sullivan very soon after began to commercially produce gauze bags which allowed for better infusion.

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Estate Administration in 500 Words or Less

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This is a quick list of items that the executor should look at regarding the administration of an estate.  At all times keep an accurate record of all conversations, decisions made and actions taken, as well as all monies coming into the estate and paid from the estate.  Ensure that you keep the estate money separate from your own.

If you do not wish to administer the estate, for whatever reason, renounce the position before you take any action.  You need simply submit Form 74.11 (“Renunciation of Right to a Certificate of Appointment of Estate Trustee (or Succeeding Estate Trustee) With a Will” – available at http://ontariocourtforms.on.ca/en/rules-of-civil-procedure-forms/pre-formatted-fillable-estates-forms/) and file with the Superior Court of Justice in the county or district in which the deceased resided at the time of death.

Now, to the list:

AT DEATH – any instructions re organ/tissue/whole body donation

FUNERAL, BURIAL/MEMORIAL – any special instructions – prearranged/prepaid – if arranging funeral check with bank to ensure funds available – any money outstanding (employment pay and benefits, insurance proceeds, etc.) to help pay – death registration/burial permit/proof of death – death certificate (6 copies) to cancel social insurance number, passport, health card, driver’s licence and for insurance purposes

THE WILL – original in possession – advice needed re interpretation, probate or distribution of assets – consult lawyer re any foreign Will – review Will and any codicils or memoranda – get at least two notarized/certified copies – contact lawyer who prepared Will (ask if any changes/additions have been made – contact your lawyer if no Will located or there are trusts to be administered by executor

FAMILY/BENEFICIARY MATTERS – consult lawyer re minor children (under 18 years), children under 25 years attending school full-time, or dependents with disabilities – review any marriage contracts and support documents – notify any estranged or separated spouse – determine immediate financial requirements of family (mortgage, rent, etc.) – recommend assets that could be sold to meet needs – arrange for care of dependants (including pets, livestock/crops) – list family/beneficiaries including full name, relationship, date of birth, address and other contact information – if possible arrange meeting (optional) to discuss the Will, your duties and plan – advise beneficiaries of realistic timing of probate, tax filings, and any other matters that may delay the distribution of assets – gather information they may have re outstanding debts, pending litigation, location of assets, etc. – provide beneficiaries with copy of relevant part of the Will – identify charitable organizations named in Will and check that they still exist – consult lawyer if charity no longer exists

EXECUTOR INSURANCE – if any concern about potential liability, insurance must be purchased (estate expense) at the start of the administration (http://www.erassure.com for more information)

LEGAL MATTERS – consult your lawyer if: cause of death may give rise to a legal claim – if deceased was a party to any legal proceeding at the time of death or had entered into any contract (written or verbal) prior to the time of death – spousal or child support payments were being made

GENERAL HOUSEHOLD – notify landlord (if applicable) – change locks and alarm codes – dispose of perishables from kitchen and pantry, etc. – secure and arrange for care of vacant property (snow removal, lawn maintenance, etc.) – notify insurers and maintain adequate coverage on home(s), contents, vehicles, etc. – advise police that house will be empty

IDENTITY THEFT – notify credit information companies (https://www.transunion.ca / https://help-en.equifax.ca) of death to prevent unauthorized applications for credit and identity theft

SECURE VALUABLES – create Estate Inventory – locate and protect items referred to in the Will – obtain proper appraisals for valuable items – locate and protect jewellery and other valuables, deeds, mortgage documents, securities and any other documents found of potential value – invest cash in an income-generating account and protect jewellery and other valuables, deeds, mortgage documents, securities and any other documents found of potential value – obtain professional investment advice – clear and close any safety deposit boxes

Oh, I’m out of room and there’s so much more to add.  It seems that it’s not quite as simple as 500 words.  See you next month for the next part of the list.

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Can I Wear My Grandfather’s War Medals?

This April Canada is celebrating the 100th anniversary of the Battle of Vimy Ridge (1917), one of the five major battles fought by Canadians during World War I.  Before that came the 2nd Ypres (1915), then the Somme (1916); after Vimy Ridge was Passchendaele (1917) followed by Amiens (1918).

Medals (and certain badges) were awarded in recognition of an individual’s participation in a certain event or campaign.  Of the five medals available to men and women who served in WWI, the two most commonly awarded were the British War Medal (6.4 million issued globally) and the Victory Medal (5.7 million issued globally) – they are most often found together.  Awards for gallantry (e.g., the Victoria Cross) are much less common.

Since WWI, members of the Canadian armed forces have received medals and awards for service during the Second World War (1939–45), Korean War (1950–53), Gulf War (1990–91), and other wars, and will continue to receive them for future conflicts.  The Memorial Cross (also called the Silver Cross) was introduced in 1919 and is still awarded to the next-of-kin of those who have died in, or as a result of, active service.

Military items can often be found in an estate and raise questions about what one can do with medals, discharge papers, and uniforms.  Another query arises as to whether one could, or should, wear medals on Remembrance Day to honour a deceased relative.  There are those supportive of the latter idea and those opposed.

One suggestion is that a relative of a deceased veteran wear the medals on the right side of the body (in contrast to the normal left-hand side) to indicate that they themselves did not earn them.  Those opposed to this idea argue that war medals worn by others likens them to a form of costume jewellery which diminishes the experience, sacrifice, or valour of the person awarded them.

The question about wearing a relative’s medals, however, is moot.  It is illegal in Canada to do so.  Article 419 of the Criminal Code states, in part, that unless lawfully authorized (i.e., you have earned the right to), you cannot wear the uniform, military medal, ribbon, or badge, or anything likely to be mistaken for any of these.  Period.  Other countries have similar legislation.

So, what to do with medals found in an estate?  You can honour a relative by displaying their military items in a glass case or by mounting medals in a frame along with a picture or story.  Alternatively, you can sell the items to a collector or donate them to a school.

In addition, you can honour their memory by attending local Remembrance Day services, visiting historical sites or taking part in memorial celebrations (November 10 marks the 100th anniversary of the Battle of Passchendaele).

As long as there are wars and other conflicts that require a military presence there will be medals and the family members’ wish to honour those who have participated or lost their lives doing so.

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The Executor’s First Task – It May Not Be What You Think

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Although the family often makes the funeral arrangements at the time of death, it is the executor who has the legal obligation to do so.  These arrangements must be reasonable and in keeping with the deceased’s position in life and the size of estate.  The funeral expenses are borne by the estate and are paid before any other debts.

Since the executor has the authority to make all the decisions until the body, or ashes, have been buried or otherwise disposed of, he or she can, if necessary, override the family’s wishes and/or disregard any funeral instructions in the Will.  The family must, however, be kept informed of all the decisions made.

This is really a two-part process:  one part deals with the deceased person in the form of a ceremony, and the other part with the actual disposition of the body.

Here’s a quick breakdown of some of the decisions that you, as the executor, might have to make.

The disposition of remains is a choice between burial and cremation.  Embalming is not legally required in Canada but provincial legislation will apply in certain circumstances (e.g., if the body is to be transported over a long distance).  Check airline requirements if transporting ashes.

Direct cremation – no visitation or service.  This is probably the least expensive option.  Decisions will need to be made regarding who will receive the ashes and/or where the disposition will be – crypt, columbarium, cemetery or otherwise.

Direct burial – no visitation or service.  Costs are for the cemetery plot, embalming (optional) and casket.  Green or natural burial does not involve embalming and the body is placed in a shroud or casket before being buried.  There are currently only four natural burial grounds in Canada.

For the ceremony there are several choices for the venue – at home, at a place of worship, at a funeral home or anywhere else that may be appropriate and several choices for how to pay tribute – funeral, memorial or celebration, or any combination of these.

At-home funeral – the family prepares the body for the funeral and makes all other arrangements directly with a cemetery or crematorium.  The family will usually also look after obtaining all the required paperwork including the body-transfer permit and burial permit.

Graveside service – the entire gathering and funeral occur at the cemetery.

Traditional funeral – can be the grandest, and most expensive, option.  Decisions will need to be made regarding such things as closed or open casket, viewing and visitation, procession to burial site or crematorium, and any ceremony before body is laid to rest or cremated.

Memorial/Celebration of Life – can take place at almost any venue at any time.  Can occur after direct cremation or burial or in combination with any of the other services mentioned.

Because there are so many choices, and so many opinions about what the deceased would have been wanted versus what the family might want, it is important that you, as executor, speak with the testator about how he or she envisions their last hurrah and whether or not it has been prearranged and/or prepaid.

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