Being a Personal Representative – What happens when the testator dies?

What happens when the testator dies? 

Common questions about performing the duties of a personal representative 

How do I confirm that I was named as the personal representative?

After the death of the testator, you need to get the original version of the will (and any codicils) to check. If these documents are not at the testator’s home, they may be in a safety deposit box or at the office of the lawyer who drafted them.

To look in the safety deposit box, make an appointment at the bank. Take the safety deposit box key, the death certificate (or funeral director’s  statement of death), and your own identification. If the will is there and names you as personal representative, the bank should let you take the will. You and a bank employee will then list the contents of the safety deposit box. Keep a copy of that list.

What if I can’t find the will?

If you can’t find the will, check with the testator’s relatives and close friends. They may know where it is located.

Without a will, you cannot proceed with managing and distributing the estate.

You must apply for what are called “Letters of Administration.” You become the administrator rather than the personal representative. More information can be found on the Alberta Courts website at www.albertacourts.ca.

I found a will that is handwritten, signed, and dated, but no oneelse witnessed it. Is it valid?

In Alberta, a will is valid even if it is entirely handwritten by the deceased, as long as it is signed and dated. It does not have to be witnessed to be valid. This is called a holograph will. However, not all provinces recognize holograph wills.

In Alberta, for the holograph will to be valid, it must be the last will of record. In addition, there must be certainty that it was written by the deceased. Hopefully, you or a family member or friend will be able to recognize the handwriting. If there is a dispute, an estate lawyer should be able to help.

What happens if there is more than one will?

Usually, there is only one valid binding will. Generally, the binding will is the one that is the most recent and meets all of the legal requirements for making a will.

For example: A testator wrote a will in 1992 and it met all of the legal requirements. In 2002, the testator wrote a new will, which attempted to cancel the 1992 will, but it did not meet all of the legal requirements. As such, the 1992 will is the valid one.

As personal representative, you must make a reasonable effort to ensure you are working with the correct will, as it is your job to do your best to ensure the wishes of the testator are carried out.
Sometimes, there may be a dispute as to which will is the official one. For example, someone may claim that the most recent will was written when the deceased did not have the mental capacity to write one. A court may have to decide.

If the will was made in another province, is it valid in Alberta?

If someone dies in Alberta, but had a valid will made in another province, a personal representative may be able to act on the will. The process, however, may be more complicated. It is always a good idea to make a new will when moving to another province.

Which property forms part of the estate?

The estate consists of the property owned by the testator at the time of his or her death, which is to be distributed according to the instructions in his or her will. An estate’s property is first used to pay the testator’s debts and taxes, and then it is distributed in accordance with the instructions in the will.

Property that does not generally form part of the estate includes:

  • Property such as land, a house, or bank accounts where the registered owners are described as joint tenants. This kind of property transfers to the remaining joint tenant(s) when the first joint tenant dies (occasionally, there may be exceptions to this).

Note: On the other hand, property for which the registered owners are described as tenants in common does flow through the estate.

  • RRSPs, pensions, life insurance policies for which the testator has designated a beneficiary other than his or her estate.

Consider the following scenarios:

  • In 1999, the testator signed a designation of beneficiary form leaving the death benefit of his pension plan to his sister. In 2006, the testator then wrote a will but did not mention his pension plan. The death benefit will go directly to the named beneficiary (his sister) and will not form part of the testator’s estate. No part of the funds can be used to pay the debts of the estate.
  • In 1999, another testator signed a designation of beneficiary form leaving the death benefit of her pension plan to her brother. In 2006, the testator then wrote a will and in that will she did make other arrangements for this benefit (she left it to her sister). The death benefit will form part of the estate (that is, it can first be used to pay debts and what remains will go to her sister).

Can I get help from professionals with my duties as a personal representative?

Yes. Although many personal representatives do the work themselves, a personal representative can get help from friends and family members and also from a lawyer, accountant, or other professional. For example, you may hire a lawyer to handle probate and complex business matters and an accountant to prepare the final tax return. Lawyers can also help you if you need to provide an affidavit (a written oath that swears the information you give is true).

Consulting with the testator’s accountant or tax lawyer may also prove beneficial. For example, they can usually produce previous years’ tax information, provide advice about tax avoidance strategies to minimize the taxes on the estate, and assist in transferring tax liability from the estate to a beneficiary in a lower tax bracket.

Even if a personal representative gets help, he or she is the person who remains legally responsible.

If you are a member of a profession, such as a lawyer or accountant, and you exercise your professional capacity when acting as a personal representative, then you will be held to the degree of skill expected of such a professional.

 If I do get help with my duties as a personal representative, who pays for that help?

Reasonable professional fees are paid out of the estate. Ask beforehand about costs, the amount of time involved, and the services provided.

What is probate?

Probate is a legal procedure where the court determines a will’s validity and confirms the personal representative’s appointment. In Alberta, this happens in the Court of Queen’s Bench. A personal representative must apply to the Court to probate a will.

There are a number of forms available to help with this task. Visit the Alberta Courts website at www.albertacourts.ca for more information.

Court fees are charged for probate – the larger the estate, the higher the fee. In June 2015, the fees were:

Estate Value Court Fees
Up to $10,000 $35
Over $10,000 but not more than $25,000 $135
Over $25,000 but not more than $125,000 $275
Over $125,000 but not more than $250,000 $400
Over $250,000 $525

 

Does the will have to be probated?

No, not all wills have to be probated. It depends on various factors such as: the amount and nature of assets, the complexity of the estate, the number and nature of beneficiaries, and the policies of the agency or financial institutions that hold the particular assets.

For example, certain assets, such as land owned in joint tenancy with another person, don’t require probate. If the testator owned land or a house in joint tenancy with another person, you only have to file an application in the Land Titles Office along with the death certificate. This will register the land in the name of the surviving joint tenant. Similarly, if the testator owned a bank account or vehicle in joint tenancy, the death certificate is usually sufficient to transfer these to the surviving joint owner.

If there is any sign that the legality of the will is in question or that there could be disagreement over the provisions of the will, then the will should be probated.

In addition, RRSPs and insurance policies, which typically name a beneficiary to receive the proceeds in case of the person’s death, are not considered part of the estate and therefore do not require probate. You should give the death certificate to any insurance companies and RRSP administrators with whom the deceased person had plans. Such agencies will want the death certificate before paying money to a beneficiary.

If, on the other hand, the estate includes land held only in the name of the testator, probate will be required. Similarly, if the estate includes securities, such as stocks and bonds, you may have to apply for probate in order to transfer them. You should check with the financial institution or transfer agent involved for each security in the estate, as they will each have different requirements.

In practice, many estates end up going through the probate process. Personal representatives are often encouraged to have the will probated, because without this legal confirmation process, many people could become concerned that the will is invalid, possibly signed under pressure or threat, or that there may be a more recent will. If there is any sign that the legality of the will is in question or that there could be disagreement over the provisions of the will, then the will should be probated.

 How long does probate take?

Probate will probably take several weeks from the time the necessary documents are filed with the Court, depending on the complexity of the estate and the volume that the Court is dealing with. Your lawyer may be able to help you speed up the process.

As personal representative, am I required to have the estate’s assets appraised?

If the will is being probated, the court will require estimated values. If values are modest and the personal representative is comfortable making the estimates, an official appraisal may not be required. An appraisal is an excellent tool, however, in helping to ensure fairness and impartiality. In addition, in terms of items such as collectables and antiques, appraisals can prevent serious mistakes. The cost of any appraisals will be covered by the estate.

What happens if the will includes a trust?

A trust is a part of the estate that is set aside for a beneficiary, most often a minor or dependent child, for a certain amount of time. For small or simple estates, the personal representative is often also the trustee (person who manages the trust).

In larger or more complicated estates, there may be a different trustee. Sometimes the trustee may be a trust company; sometimes it may be the Public Trustee. If there is such a trust, contact the Office of the Public Trustee for advice and direction. For a list of situations in which you must involve the Public Trustee, see:

http://humanservices.alberta.ca/guardianship-trusteeship/opt-deceased-personscommon-questions.html

If you are acting as trustee, you are responsible for making sure that all the trust assets are invested or kept in a safe place and for filing annual trust tax returns (note: estate tax returns must be filed separately). You are also responsible for making payments from the trust to the beneficiary as directed by the will.

You can get help with these tasks from a lawyer and an accountant. You may wish to contact the Canada Revenue Agency for a copy of the booklet called “T3 Trust Guide.” You can download this guide from their website at

http://www.cra-arc.gc.ca.

What if I am the personal representative for an estate with a property that is not in Alberta?

If the estate includes property that is not in Alberta, it may be necessary to apply for probate in the place where the property is located. In this case, you should consult an estate lawyer. Similarly, an estate may have a beneficiary who lives outside of Canada. This can create complex issues, particularly regarding tax obligations. Contact the Canada Revenue Agency about any such beneficiaries.

Can the estate keep all income that arrives after the testator’s death?

Not necessarily. It depends on the kind of income. For example, any Canada Pension Plan and Old Age Security cheques for the month after the month in which the person died cannot be cashed and must be returned.

My testator was in rental accommodation at the time of death.   What are my obligations as personal representative?

If a tenant dies and there are no other tenants in the unit, the tenancy is terminated on the earliest date that the tenant could have terminated the tenancy under the Residential Tenancies Act. The termination date depends on the nature of the rental agreement, for example, whether it was periodic or fixed term. For more information, see Laws for Landlords & Tenants in Alberta – www.landlordandtenant.org.

It is important for a personal representative to:

  • inform the landlord of the testator’s death as soon as possible;
  • keep the landlord updated about when the property will be removed; and,
  • make arrangements with the landlord to protect the property (such as continuing to pay rent while you make arrangements to move the property).

If this is not done, the property may be treated as abandoned by the landlord. The Residential Tenancies Act sets out rules for how the landlord is entitled to dispose of  abandoned property.

What are “death benefits” and what do I need to do to get them for the estate?

A death benefit is a sum of money due to a beneficiary upon the death of the benefit holder. Various public and private programs offer death benefits.

Examples include: Canada Pension Plan (federal government), Old Age Security (federal government), public pension plans (example: for Alberta government employees and former employees), and private company pension plans (for employees or former employees of those companies). Other groups that commonly have death benefits are unions (for current or previous union members), trade organizations, and social groups (i.e. the Freemasons).

As personal representative, if you find any indication that the testator was a member of such a program, group, or club, you should inquire into any possible death benefits.

My father’s will says sell everything and split the proceeds among his four children. I would like to keep some of the items. What can I do?

If the will says to sell (also known as liquidate) the items and you would like to keep some of them, there are various ways to do so. One way is to have an estate auction where the estate can be sure that all of the items are liquidated. At the auction, you can buy the items you want to keep, knowing that you will be getting your share of some of the proceeds from the sale. An auction will also address a situation where two heirs want to buy the same item. It may also be possible for you to obtain several appraisals for the value of the items you would like to keep and then pay the appraised value to the estate, if your siblings agree.

Can I distribute assets before the debts and taxes are paid?

The law requires that debts and taxes be paid in full. Practically speaking, however, some tax issues can take a while to resolve. As a result, some personal representatives begin the distribution process, but leave enough funds to pay the anticipated taxes.

This is risky and is not recommended.

When does my responsibility as personal representative end?

There is no set time when the responsibilities of the personal representative end unless the court formally discharges you. In practice, most people say it takes about a year to complete the work of personal representative for a straightforward estate. The Estate Administration Act says the estate should be distributed as soon as possible. A court order may be made to speed up the process if the personal representative is not acting efficiently.

The personal representative may remain responsible for looking after the estate indefinitely, particularly if assets or debts turn up years later. Even if the estate has already been distributed, the personal representative is legally responsible for dealing with any assets or debts that show up.

You should NOT rely on this webpage for legal advice. It provides general information on Alberta law only. November 2015.
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