Duties of a Personal Representative (16B:II)
A. General Duties
The basic duties of an Executor/Administrator are to:
- Obtain a death certificate from the Department of Vital Statistics; However, ordinarily, a funeral home will order and provide a death certificate.
- Locate the last will if there is one and apply for a search of wills notices;
- Arrange for the disposition of the deceased’s body and the funeral;
- Determine the names and addresses of the beneficiaries and intestate heirs and notify them;
- Cancelling subscriptions, redirecting mail and wrapping up personal matters
- Gather papers relating to assets and ascertain the value of the assets (by way of an inventory, taking into account debts and liabilities);
- Safeguard assets until they are sold or distributed, including the transfer of ownership registration and the collection of any debts;
- Selling assets if it is necessary and distributing the estate;
- Prepare and file tax returns;
- Notify appropriate agencies (pensions, subscriptions, charge accounts, etc.);
- Paying all valid debts left to the estate (please note that an executor or administrator may be held personally liable for unsettled debts after the distribution of the estate); and
- Preparing and obtaining approval for the beneficiaries for distribution of estate.
B. CPP Death Benefits
The Canada Pension Plan (CPP) death benefit is a one-time, lump-sum payment to the estate on behalf of a deceased CPP contributor. If an estate exists, the executor named in the will or the administrator named by the Court to administer the estate applies for the death benefit. The executor should apply for the benefit within 60 days of the date of death. If no estate exists or if the executor has not applied for the death benefit, payment may be made to other persons who apply for the benefit in the following order of priority:
- The person or institution that has paid for or that is responsible for paying for the funeral expenses of the deceased;
- The surviving spouse or common-law partner of the deceased; or
- The next-of-kin of the deceased.
To be entitled to a CPP death benefit, the deceased must have made contributions to the lessor of:
- One-third of the calendar years in their CPP contributory period, but no less than 3 calendar years; or
- 10 calendar years
The amount of the death benefit depends on how long and how much has the deceased contributed to his CPP, though the maximum benefit is $2,500. To apply, you will need to complete the Application for a Canada Pension Plan Death Benefit (ISP1200), include certified true copies of the required documentation, and mail it to the closest Service Canada Centre to you. Addresses are provided on the form (ISP1200).
C. Search of Wills Notice
If the deceased made a Willwill, he or she may have filed a Wills Notice with the Vital Statistics Registry. Note that the Vital Statistics registry does not keep a copy of the Willwill, but will only have a record of the date the Willwill was made. To obtain a representation grant through the court registry, a personal representative will need to provide two copies of a Wills Notice Search, which can be obtained on application to the Vital Statistics Registry. A Wills Notice Search will provide the date the person signed the will registered in the wills notice, the location of the will at that time, and the date the Vital Statistics Agency received the wills notice. If the testator is alive, only the testator can request for a search of Wills Notice. However, a person who provides the documentation and payment listed below can apply for a Wills Notice if the testator is deceased:
- A photocopy of the death certificate
- A completed VSA 532 form
To apply for a search, a person has to mail the requested documents to: Vital Statistics Agency, PO Box 9657 Stn Prov Govt, Victoria, BC V8W 9P3. Alternatively, they can deliver the requested materials to a Service BC Counter to request for a search of Wills Notice. Please note that you cannot ask for a search online unlike filing a Wills Notice. The cost to conduct a Wills Notice search is $20 per will search, plus $5 for each additional name the testator may have used. The results are usually printed within 20 business days. If you are pressed for time, you can also request Courier Delivery. In the case of Courier Deliveries, there is an additional $33 fee for the courier, but it prints next business day.
D. Other Asset Distribution Instruments
If life insurance policies and RRSPs have pre-existing designated beneficiaries, they will not form part of the Willwill-maker’s estate, and will be administered outside of the probate process. For life insurance policies with designated beneficiaries, the proceeds do not form part of the estate. A beneficiary designation in a will is invalidated by a subsequent designation made in an insurance policy or is revoked when the will is revoked (see Insurance Act, s 61(2)). Also, a will cannot revoke an earlier life insurance designation unless it complies with s 60 of the Insurance Act, which requires that the policyholder file a contract or declaration with the insurance company, designating the beneficiary of the policy irrevocably. If this document is filed, the beneficiary must consent to any change to the designation. However, a general revocation clause that does not specifically refer to the insurance policy or contract does not revoke the designation made prior to the will, because it does not meet the definition of “declaration” under the Insurance Act; see Hurzin v Great West Life Assurance Company, (1988),) 23 BCLR (2d) 252 (SC). Those clients with a significant amount of money in RRSPs should consult a tax lawyer or tax accountant for estate tax planning advice, as there are several tax rules that apply solely to the final year of a person’s life.
E. Time for Distributing the Estate
As a rule of thumb, an Executor has one year from the date of death (known as the “Executor’s year”) to distribute the estate. The concept of the executor’s year derives from presumption that an executor will be capable of dealing with the Estate’s affairs within this period. The concept of the executor’s rule has two aspects:
- A court will ordinarily not compel an executor to make a distribution before the expiry of this period.
- Except when specifically provided in a will, a legacy will not carry interest until a year after the death of the will-maker.
However, it should also be noted that under section 155 of WESA, a personal representative of a deceased person must not distribute the estate of the deceased in the 210 days following the date of the issue of a representation grant except with the consent of all the beneficiaries and intestate successors entitled to the estate or by an order of the court. This period is to allow any individuals who wish to make a claim against the estate to file a claim. Additionally, the personal representative must not distribute the estate after 210 days without the consent of the court if:
- There is a commenced proceeding to determine if a person is a beneficiary or if a person is an intestate successor,
- If relief is sought under a wills variation claim, or
- Other proceedings have been commenced which may affect the distribution of the estate
F. Payment of Debt
The personal representative is personally liable for payment of creditors if he or she pays the beneficiaries before the debts of the estate. Thus, a personal representative should advertise under s 38 of the Trustee Act, wait 21 days from the last publication, pay any claims that arise, and then pay the beneficiaries. Having advertised, the personal representative will not face personal liability. But the personal representative would still be responsible for the debts, regardless whether he/she has advertised or not, if the personal representative has knowledge of the creditor’s claim prior to distribution.
G. Income Tax Clearance Certificate
Section 159(2) of the Income Tax Act, RSC 1985, c 1 (5th Supp) prohibits distribution of the assets until a certificate is obtained from the Minister of Finance certifying payment of all taxes. Without such a certificate, the personal representative may be personally liable for the unpaid amount. However, there have been changes in Canada Revenue Agency (CRA) procedure. It is now possible to review information via online terminals, and usually it is not necessary to obtain the return itself from a taxation centre. The clearance request and necessary documents are not filed with the return, but are forwarded separately to CRA’s district office. The personal representative needs to file a terminal tax return, as well as an estate tax return for every year following death. Generally, the terminal tax return is due on or before the following dates:
- If the death occurred between January 1 and October 31 inclusive, the due date for the terminal tax return is April 30 of the following year
- If the death occurred between November 1 and December 31 inclusive, the due date for the terminal tax return is six months after the date of death
H. Discharge of Personal Representative
When the estate is large, when litigation is involved, or when the estate is insolvent, the personal representative may wish to protect him or herself when the estate is distributed by obtaining a discharge per section 157 of WESA. This discharge is not generally necessary where a small estate is involved. Generally, a personal administrator can consider their duties at an end once all the residuary or intestate beneficiaries have approved their accounts and signed a release, and when they have obtained clearance from the CRA.
I. Passing of Accounts
Section 99 of the Trustee Act, RSBC 1996, c 464 sets out the procedure for the passing of the trustee’s accounts. Absent written and approved consent by all beneficiaries or a court order, an executor, administrator, trustee under a will and judicial trustee must within two years of the grant of probate or grant of administration or within two years from the date of appointment, pass his or her accounts.
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