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Duties of an estate trustee: From the beneficiary's point of view

This article reviews the rights and obligations of a residuary beneficiary in an estate.

Every estate has at least one beneficiary. If you are a beneficiary it is important to understand the type of bequest or gift you have received and the duties of the estate's personal representative; normally called in Ontario the estate trustee.

It is important to remember that being a beneficiary of an estate brings with it an entitlement and obligation. When a testator has passed away and left a gift in the Will (provided the Will is not overturned) the beneficiary is entitled to the gift as of right.

The beneficiaries of an estate are all the individuals or organizations that benefit from the deceased person's estate according to the deceased person's legal Will or, if there is no Will, in accordance with the rules of intestacy set out in provincial statute.

It is also important to remember the different players involved in the administration and that each player has a unique and mutually exclusive role.

The duties of an estate trustee and a trustee are different. The estate trustee's job is to administer the estate from beginning to end and to ensure that the deceased's wishes are followed. At the same time the administration of the estate is occurring, the estate trustee is also wearing a second hat, that of a trustee. The trustee's job is to protect the estate property, hold the property in trust for the beneficiaries, continue to earn income from the property for the beneficiaries, act with the utmost honesty and care, and to do what is in the best interests of all of the beneficiaries of the estate.

As a reminder these are some of the common duties of an estate trustee:

· Make the funeral arrangements
· Retain a solicitor for advice
· Locate, inventorize, value and secure the assets
· Determine and provide addresses for all beneficiaries
· Discuss any potential claims of dependants
· Determine the debts of the deceased and pay them after contestation and settlement as necessary
· Obtain investment advise
· File tax returns, pay taxes owing and obtain appropriate tax clearance
· Distribute assets as directed by the Will (or intestacy rules)
· Invest assets for the establishment of any testamentary trusts
· Maintain proper records
· Prepare periodic accounts detailing the administration of the estate for beneficiary information and review
· Report to beneficiaries as required
· Respond to inquiries promptly

The estate solicitor has a more limited role. The estate solicitor is hired or retained by the estate trustee. The duties of the estate solicitor are generally to:

· Advise the estate trustee
· Determine the appropriate testamentary document(s)
· Read and if necessary interpret (or seek the guidance from the court on the interpretation) of
the testamentary documents
· Meet with the estate trustee to review assets and debts
· Determine if probate is necessary
· Obtain necessary information to complete legal documentation required
· Prepare legal documentation
· Advertise for creditors
· Arrange for the settlement of creditor's claims
· Assist the estate trustee with the preparation of the estate accounts
· Assist the estate trustee with the preparation of income tax returns (or direct to an accountant)
· Advise with respect (or direct to an accountant) to income tax returns, holdbacks, non-
resident tax liability and necessity for final tax clearance certificate
· Prepare releases for execution by beneficiaries
· Protect the interests of the estate trustee.

There can be a single beneficiary or a long list of beneficiaries. Most individuals want to leave the assets they have accumulated over their lifetime to their family, sometimes also to friends and favourite charity. In Ontario, until very recently, estate practitioners and the courts use to say that a person was free to do as he or she wished with his or her assets. Family member could be excluded and it was not "necessary" to have a "good" reason (although it was preferred to record a good reason to defend against any litigation). Now with the Ontario Court of Appeal in a recent decision of Cummings v. Cummings Estate [1] which states a testator when making a Will must have due regard to his or her "moral obligations" estate practitioners still say a person is free to do as he or she wishes in their Will but subject to certain restraints.

For more information on estate, trust, powers of attorney or guardianship topics please see accompanying articles. Remember these articles are provided for information only and are not meant to be legal advice. Please consult with a professional.

Jasmine Sweatman practices at the law firm Sweatman Law Firm and can be contacted directly by telephone at 888-389-2165 or by email at jasmine@sweatmanlaw.com .

[1] (2003), E.T.R. (3d) 81, 223 D.L.R. (4 th) 732, affd 5 E.T.R. (3d) 97, 235 D.L.R. (4 th) 474 (C.A.), leave to appeal to Supreme Court of Canada refused 2004 CarswellOnt 99.

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