Being named as an Estate Trustee is a significant legal responsibility. If you’ve recently been appointed as an Estate Trustee, you may be wondering what the role involves and what you’re expected to do.
Many people assume an Estate Trustee simply distributes a loved one’s assets after they pass away. In reality, the role is much broader and comes with important legal duties.
If you’re administering an estate in Ontario, understanding your responsibilities from the beginning can help you avoid costly mistakes and ensure the estate is managed properly.
What Is an Estate Trustee?
An Estate Trustee is responsible for administering a deceased person’s estate. If the deceased left a valid Will, the Estate Trustee is the individual(s) they chose to carry out the instructions in that Will. In older Wills, or in common conversation, you may still hear the term executor. In Ontario, the legal term is now Estate Trustee.
If someone dies without a Will, the court would need to appoint an individual to administer the estate. While the application process is a bit different, the responsibilities are largely the same.
What Does an Estate Trustee Do?
An Estate Trustee’s job is to manage the deceased’s affairs, protect the estate’s assets, pay outstanding debts, and distribute the remaining assets to the beneficiaries.
While every estate is unique, the role often includes several important responsibilities.
Locate the Will
If a Will exists, one of the Estate Trustee’s first responsibilities is locating the original signed document.
The Will provides important information about:
- Who the beneficiaries are
- Who has been named as Estate Trustee
- How the estate should be distributed
- Any specific gifts, bequests or instructions
If the original Will cannot be located, the estate administration process may become more complicated.
Determine Whether Probate Is Required
Not every estate requires probate, but many do.
Depending on the assets involved, the Estate Trustee may need to apply to the Ontario court for a Certificate of Appointment of Estate Trustee before they can deal with certain bank accounts, investments, or real estate.
Determining whether probate is necessary is one of the first legal questions an Estate Trustee should address.
Protect the Estate’s Assets
Before assets can be distributed, they must first be protected.
This may involve: securing the deceased’s home, safeguarding valuables, maintaining insurance coverage, redirecting mail, notifying financial institutions and ensuring assets are properly maintained
Estate Trustees have a legal duty to preserve the value of the estate for the benefit of the beneficiaries.
Identify Assets and Debts
An Estate Trustee must determine exactly what the deceased owned and what their debts are.
This may include bank accounts, investments, real estate, vehicles, other personal belongings, business interests, outstanding loans, credit cards and any outstanding taxes owing.
Creating a complete inventory is an important step in administering the estate.
Pay Outstanding Debts
Before beneficiaries receive an inheritance, the Estate Trustee must ensure the estate’s debts have been addressed.
These may include: funeral expenses, credit card balances, mortgages, income taxes, property taxes or other legitimate claims against the estate.
Distributing assets before debts are paid can expose an Estate Trustee to personal liability.
Communicate with Beneficiaries
Beneficiaries often have questions about the estate administration process.
Although Estate Trustees are not expected to provide constant updates, they should communicate openly about significant developments and respond to reasonable requests for information.
Good communication can help prevent misunderstandings and reduce the likelihood of disputes.
Keep Accurate Records
One of the most important responsibilities of an Estate Trustee is maintaining detailed financial records.
This includes keeping track of estate income, estate expenses, property sales, any payments made, bank statements, receipts and other correspondence.
Beneficiaries are generally entitled to receive an accounting of how the estate has been managed.
Distribute the Estate
Only after debts, taxes, and legal obligations have been addressed should the Estate Trustee distribute the remaining assets to the beneficiaries in accordance with the Will or Ontario law.
While beneficiaries are often eager to receive their inheritance, Estate Trustees must ensure the estate is ready before making distributions.
Acting as an Estate Trustee can feel overwhelming, especially if you’re managing an estate while grieving the loss of a loved one. Understanding your legal responsibilities and knowing when to seek professional guidance can make the process significantly easier.
The content on this post is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship.