Acting as an Estate Executor, or Personal Representative, is a challenging role that comes with significant responsibility. It’s also an important task. While most people don’t ‘enjoy’ acting as an Estate Executor, and while Executors are entitled to financial compensation in many cases, the true reward of Executorship is that you’re providing a valuable service to the loved ones and family members of a deceased person during what is an otherwise difficult time.
While Executorship comes with both challenges and rewards, it’s important that you, as an Estate Executor, avoid the common pitfalls that can make Estate administration far more stressful than it needs to be. The easiest way for an Executor to avoid the mistakes we cover in this article is to adopt a team approach.
While you’ll already be ‘one-step-ahead’ if you adopt a team approach to Estate Administration, it’s helpful to be able to recognize the mistakes that Alberta Estate Executors commonly make, so that you’re able to avoid them.
Mistake #1: Trying to do Everything on Your Own
One of the biggest mistakes that we see Executors make, is trying to do everything on their own. At the risk of ‘beating a dead horse’, it’s imperative that you take a team approach to Executorship. Too often, Executors try to complete the Estate administration process on their own. While there are many tasks during the Estate administration process that an Executor can, and should, complete, there are other tasks that an Executor can delegate to their ‘teammates’. By trying to do too much on their own, an Executor risks legal liability, frustrated beneficiaries, and a lengthened and stressful Estate administration process.
Mistake #2: Improper or Inadequate Record-Keeping
Executors often fail to keep proper financial records. With the potential for lawsuits and legal claims against Estates and their Executors, it’s essential that an Executor keep detailed financial records. A thorough Executor will keep official invoices, transaction receipts, bank statements, and other documentation in an orderly and secure filing system. They may also choose to back up formal financial and other records with handwritten or typed details about the transactions shown on the ‘official’ statements.
Mistake #3: Failing to Communicate with Estate Beneficiaries
Communication is key to effective Estate administration. Strained relationships between Executors and beneficiaries can lead to conflict, stress, and even lawsuits against the Executor. One of the biggest mistakes an Executor can make is failing to adequately communicate with beneficiaries. While beneficiaries shouldn’t interfere with your Executorship role, candid and regular communication with Estate beneficiaries, providing them with timelines and ‘next steps’ in the Estate administration process, and providing an adequate accounting of the Estate funds you handle will make your life much easier.
Mistake #4: Not Hiring a Probate Lawyer
While hiring a lawyer can be expensive, one of the most common mistakes that Executors make is going through probate without the assistance of a qualified probate lawyer. While some Executors avoid hiring a probate lawyer to save money, the cost savings that they ultimately realize may be far outweighed by the hassle, stress, and potential legal liability that they may open themselves up to if they fail to fulfill their legal obligations to the Estate.
A knowledgeable probate lawyer will reduce your workload, provide you with valuable legal advice, and ensure that you don’t overlook any of your obligations to the Estate. If you’re on the fence about hiring a probate lawyer, call a few different firms in your area to get an idea of their cost structure and the services that they offer—you may find that legal fees are actually less than you initially expected, and decide that hiring a probate lawyer is the right option for you.
Mistake #5: Failing to File Required Tax Returns
Executors who fail to file required tax returns will eventually find themselves in ‘hot water’ with the Canada Revenue Agency (CRA). Estate Executors are required to file tax returns for both the deceased and the Estate, and should also obtain a Clearance Certificate from the CRA in most cases. An experienced tax accountant can assist you in determining which filings are necessary, and with completing the requisite returns.
Mistake #6: Neglecting to Serve Adequate Notice on Interested Parties
Estate administration laws in Alberta require an Executor to serve notice on various parties who may have interests in, or entitlements to, a deceased’s Estate. Executors may overlook serving notices on certain parties, as notice entitlements aren’t always obvious or intuitive. Your Wills & Estates lawyer can help you determine who is entitled to notice and prepare any required notices on your behalf.
Mistake #7: Neglecting to Advertise for Creditors
In some cases, the deceased may have had unknown creditors or unsatisfied debts. In such situations, an Executor is required to post newspaper notice to potential creditors, advising them of the deceased’s death. Executors who neglect to advertise for creditors may open themselves up to liability, or mistakenly distribute Estate assets to beneficiaries before satisfying creditor obligations.
Mistake #8: Mishandling/Borrowing Estate Funds
Executors sometimes mishandle or misappropriate Estate funds. Oftentimes, an otherwise honest Executor carelessly borrows or fails to adequately track their handling of Estate funds, and finds themselves ‘out-of-bounds’. It’s important that you, as an Estate Executor, never borrow or otherwise use Estate funds for your own purposes. When in doubt about a particular transaction, contact your probate lawyer first.
Mistake #9: Not Following the Will
No matter how much you think that a particular loved one ‘deserves’ a share of the deceased’s Estate, a particular family heirloom, or to act as the Estate’s Executor, it’s essential that you follow the deceased’s valid last Will.
Mistake #10: Neglecting to Have Beneficiaries Sign Releases
As a probate lawyer, this is one of the mistakes that I see Executors make most frequently. Executors are, by law, required to provide Estate beneficiaries with an accounting of their handling of all Estate funds from the date of the deceased’s death to the date of distribution. Once they’ve provided an accounting to the Estate’s beneficiaries, the Executor should ensure that each beneficiary approves the accounting and the Executor’s handling of the Estate funds, before distributing funds to any beneficiary. Overlooking this aspect of Estate administration can open an Executor up to unwanted legal liability. The peace-of-mind that the release process affords an Executor can’t be overstated, either.
Our Probate Lawyers Can Help You Avoid the Pitfalls of Executorship
If you’re an Estate Executor or Personal Representative, the experienced probate lawyers at West Legal can help you avoid the mistakes and pitfalls that Executors most commonly make. We’ll give you an honest assessment of whether probate is required in your circumstances, and, if probate is necessary, we’ll guide you through the probate process and provide you with valuable legal advice that will help you administer the Estate in an efficient, stress-free manner. Contact the knowledgeable probate lawyers at West Legal today for a free-of-charge, no-obligation consultation.