Key Duties of an Estate Trustee in Canada
The duties of an estate trustee in Canada are vital to the fair and lawful administration of a deceased person’s estate. Whether appointed in a will or by court order, the estate trustee—also known as an executor or estate administrator—must act with diligence, honesty, and transparency. Failing to fulfill these responsibilities can lead to legal consequences and conflict among beneficiaries.
Who Is an Estate Trustee?
An estate trustee is the individual or institution legally responsible for managing and distributing the assets of someone who has passed away. They may be named in a will or appointed by the court if no valid will exists (intestacy).
Executor vs. Estate Trustee
While the term “executor” is commonly used in wills, Ontario law now prefers the term “estate trustee.” Both refer to the same role but may differ slightly depending on whether there is a will:
- Estate Trustee with a Will: Named in the will and follows the testator’s instructions.
- Estate Trustee without a Will: Appointed by the court and acts under intestacy laws.
Key Duties of an Estate Trustee
1. Locating the Will and Applying for Probate
The first step is to find the most recent will. If necessary, the trustee must apply for a certificate of appointment of estate trustee (probate) from the Superior Court of Justice in Ontario.
2. Identifying and Securing Estate Assets
Trustees must:
- Locate bank accounts, investments, and property
- Secure physical assets like homes or vehicles
- Prevent unauthorized access or misuse of estate property
3. Notifying Beneficiaries and Interested Parties
Estate trustees must notify all named beneficiaries, as well as any potential claimants or creditors, of the death and their potential interest in the estate.
4. Paying Debts, Taxes, and Expenses
Before distributing assets, the trustee must settle all debts. This includes:
- Funeral expenses
- Outstanding loans or credit card bills
- Unpaid taxes, including estate administration tax and income taxes
5. Filing Final Tax Returns
Final returns must be filed for the deceased. This may include:
- The final personal income tax return
- Optional returns for rights or benefits accrued before death
- Estate income tax returns, if the estate earns income post-death
6. Distributing Assets According to the Will or Law
Once debts and taxes are cleared, the estate trustee distributes the remaining assets as instructed in the will—or according to intestacy laws if no will exists.
7. Keeping Accurate Records and Reporting
The trustee must maintain proper documentation of all financial transactions and decisions. This includes:
- Receipts and disbursements
- Bank statements and invoices
- Final accounting to beneficiaries and the court (if required)
Common Challenges Faced by Estate Trustees
| Challenge | Potential Solution |
|---|---|
| Disputes among beneficiaries | Maintain clear communication and follow the will precisely |
| Complex assets or taxes | Hire professional legal or accounting advisors |
| Emotional burden | Consider hiring a corporate executor or co-trustee |
FAQs About Duties of an Estate Trustee
1. Can an estate trustee be held personally liable?
Yes. If the trustee mismanages the estate or fails to follow the will or legal obligations, they may be personally responsible for financial losses.
2. Do all estates require probate?
No. Probate is usually required if the estate includes real estate or complex financial assets, but it can be avoided in some cases.
3. Can an estate trustee be paid?
Yes. Trustees are entitled to reasonable compensation, typically a percentage of the estate value unless otherwise specified in the will.
4. What happens if there is no will?
The court appoints an estate trustee under Ontario’s intestacy laws, and assets are distributed based on a predetermined hierarchy.
5. How long does estate administration take?
Most estates take 6 to 18 months to administer, depending on complexity, probate delays, and tax matters.
Conclusion
Carrying out the duties of an estate trustee requires a careful balance of legal responsibility, financial management, and ethical conduct. From applying for probate to final distribution and reporting, trustees must act diligently and transparently. If you are appointed as an estate trustee and feel overwhelmed, consulting an estate lawyer or tax professional is strongly recommended to ensure legal compliance and a smooth administration process.
