MEMO TO CLIENT OUTLINING ROLES, DUTIES AND COMPENSATION
OF ESTATE TRUSTEE AND SOLICITOR
This memo outlines in general terms various aspects the administration of an Estate. Some of the matters outlined may not be applicable in your particular case. The matters discussed are as follows:
Content of the Will
Role and Duties of the Personal Representative
Role of Solicitor
Compensation of Personal Representative and
Compensation of Solicitor
Contents of the Will
The Will appoints the Estate Trustee(s).
The will also sets out what and how the assets of the estate are to be distributed.
The will also sets out specific powers given to the Estate Trustees.
There may also be miscellaneous provisions related to such matters as funeral arrangements and custody of minor children.
Roles and Duties of Personal Representative
Your obligations as Estate Trustee are set out below. You may note that some of the duties may not be relevant to this Estate:
1. Locate the Will and determine that it is the last valid Will of the deceased.
2. Make funeral arrangements.
3. Obtain proofs of death (these are provided by the funeral home).
4. Locate and preserve all assets - contact employers, banks, tenants, brokers etc..
5. Prepare a list of assets and known liabilities.
6. List all beneficiaries.
7. Retain solicitor to advise you on the administration of the Estate and as to whether it is necessary to apply to the Court for a Certificate of Appointment.
8. Instruct solicitor to bring the Application for a Certificate of Appointment (this of course depends on the solicitor's advice).
9. Collect all assets.
10. Determine all debts and satisfy them.
11. Arrange for the preparation of income tax returns and determine liability for income tax.
12. Prepare accounting, obtain releases from beneficiaries and distribute to beneficiaries .
You will note that in the course of performing these duties, you are obligated to maintain good records and keep all source documentation, such as canceled cheques, receipts and vouchers. Good records are very important. They allow you to respond quickly to requests for information from beneficiaries, this keeps their confidence in you high and contributes to the smooth running of the administration. Good records also make the final accounting to the beneficiaries easier and help you to establish the basis for your compensation.
As you perform your duties, you may seek our advice and you may, where it is necessary, seek the advice of accountants, appraisers or financial advisors. Ultimately, the decision making rests with you, however, and you should be aware of this.
Role of Solicitor
The solicitor's work may include the following:
1. Reviewing the Will.
2. Assisting you in your search for a Will.
3. Advising you on whether an Application for the Certificate of Appointment is necessary.
4. Preparing documentation for the Application for a Certificate of Appointment.
5. Advising you with regard to your duties as Estate Trustee.
6. Advising you with regard to possible claims under the Family Law Act and the Succession Law Reform Act.
7. Advertising for creditors.
8. Preparing documentation for the transfer of assets.
9. Preparing releases.
10. Representing the Estate in Court.
11. Serving, filing and appearing on an Application to Pass Accounts.
Compensation of the Personal Representative
An Estate Trustee is entitled in Ontario to be compensated for care, effort and time expended in administering the Estate. The usual amount of compensation provided is 2.5% of capital receipts and disbursements and 2.5% of revenue receipts and disbursements. In the event that the Estate takes a long time to finalize and requires active management, you may also be entitled to a management fee. In unusual situations where there is litigation, or the lengthy management of very complex assets, you may also be entitled to a "special fee".
You should be aware that claims for compensation are open to challenge. Therefore, as stressed above, it is necessary for you to keep accurate records and the fullest possible documentation of your dealings with the Estate. I recommend that you maintain a detailed recording of the time you spend in administering the Estate. This record should include that date on which you performed the task, the time you started the task, the time you ended the task and the nature of the task. You should be aware that you may be required to testify to establish the effort and time you expended in looking after the Estate. This is more likely where you are claiming a "management" or "special fee".
Please note, in the event that we perform any work that is considered the work of the Estate Trustee, we will be submitting an account for this work, separate and apart from our legal fees. This account will be deducted from compensation due to you.
Fees payable to other experts whose advice and services you seek, e.g. accountants, appraisers, agents etc. are supposed to be payable out of the compensation payable to you. However, the Courts are more and more willing to recognize that the increasing complexity of the assets found in Estates these days requires the assistance of experts and so as not to discourage Estate Trustees from seeking this help, have been ordering these fees to be paid by the Estate.
Compensation of Solicitor
Fees payable to me in acting in my role as solicitor are paid by the Estate. As mentioned above however, the fees for any work performed by me that is properly considered the work of the Estate Trustee, will be deducted from compensation due to you.