When an individual passes away, the assets and liabilities that they owned is known as an estate. The assets in an estate are divided based on how they are owned. There are many steps to administrating and dividing the estate.
Finding A Will and the Estate Trustee
If a will was prepared, finding it is the first step. A will can be found in:
A deceased person’s home
In a court record
Through a private will registry
In a safety deposit box
At the office of the deceased’s lawyer
An estate trustee is a person who is responsible for administering an estate. An estate trustee is either named in a will or by a court. The estate trustee named in a will is not required to act as an estate trustee, but if they do, then they are responsible for:
Winding up the affairs of the deceased
Paying any debts
Collecting the assets and distributing the remainder of the assets to those who are entitled to it
An estate trustee will be named by the court if:
No will was prepared
No estate trustee was named in the will
The estate trustee in the will asks the court to confirm the validity of their appointment and the will
Estate trustees are expected to administer the estate in a timely fashion. The funeral and disposal of the deceased’s remains should come first. The estate trustee also needs to determine any immediate needs of the deceased’s dependants who relied on them for financial support. Notifying insurance companies that are providing coverage for assets and ensuring that the coverage is continued should also be done as soon as possible.
The Process of Probate
Probate is a process that asks the court to:
Give an individual the authority to act as an estate trustee, or confirm an individual’s authority to act as an estate trustee if they are named as one in a will
Formally approve that the deceased’s will is their final will
A probate is not necessary for all estates, as it is generally determined based on the assets that the estate owns. If the deceased owned real property or property owned by a financial institution, then the estate generally has to be probated.
The Distribution of the Estate
If an individual has a will, the assets will be liquidated, funeral/burial expenses will be paid, and all debts are paid off. Afterwards, the estate is distributed according to the instructions in the will.
If the individual does not have a will, then it is called an intestacy. When a person dies without a will, the people who generally inherit their estate include their closest next-of-kin and their spouse.
An Insolvent Estate
An insolvent estate is an estate with more liabilities than assets. In this situation, the estate trustee should consider whether they should simply pay the debts or file for bankruptcy.
Bankruptcy must be filed formally by the estate trustee. The court will proceed with bankruptcy proceedings under the Bankruptcy and Insolvency Act. After a trustee in bankruptcy is appointed, the estate trustee will be absolved of all of their responsibilities and liabilities towards the administration of the estate.
This material is for informational purposes only and should not be relied upon as legal advice. To book a consultation with Buzaker Law Firm regarding the process of estate administration in Ontario, contact us at: email@example.com or (905) 370 – 0484.