5. Deal with the estate
The last step in “administering the estate” is called “distributing the ” to the . Because there is no will, you do this based on the .
Before you give any property to the beneficiaries, it’s usually a good idea to apply to the Canada Revenue Agency for a clearance certificate. This can take 4-6 months or longer.
A clearance certificate proves that all of the taxes owed by the estate have been paid. If you don’t get one and you distribute money from the estate to the beneficiaries, there’s a chance you might have to pay any unpaid taxes from your own money.
Usually you’re paid for being an . The pay comes out of the estate.
The law says you have the right to get fees that are “fair and reasonable”. This amount depends on what the estate is worth and how much work you have to do. In general, you can be paid:
- about 5% of the estate’s value, and sometimes,
- an additional care and management fee of 2/5 of 1% of the average annual value of the administered.
Before you pay any money to yourself in estate trustee fees, you must ask the beneficiaries to agree to the fees you’re going to take. You must give them a statement that shows:
- the assets that were in the estate when the person died
- the expenses and you paid or that are still owing
- the fees you’re going to take
- how much of the estate is left to be divided between the beneficiaries
If the beneficiaries don’t agree to the estate trustee fees you’re asking for, you have to go to court to “pass your accounts” and ask a judge to approve the accounts and your fees.
Close personal accounts
Once you’ve paid all the estate’s taxes and debts, and distributed the estate according the intestacy rules, you can close any accounts that don’t need to be kept open. For example:
- chequing and savings accounts
- investment accounts
- estate bank account
It’s also a good idea to let Canada’s two credit bureaus, Equifax and TransUnion, know about the death to prevent fraud. For example, so that no one can apply for a new credit card in the person’s name.
Cancel your bond
Once you’ve distributed the estate, you can apply to the court to cancel the bond, if there is one.