Frequently Asked Questions

1. If I have the will which says I'm the executor, is the bank required to give me account access?

For better or for worse, banks have a lot of discretion when it comes to helping the executor. They can make things very difficult and there isn't much the executor can do in the way of recourse. Best practices are:

1. Be proactive — consolidate all accounts to one bank which has a relationship with the executor and provide them with notarized copies of the will and power of attorney for property,
2. Get the will probated promptly as banks usually won't move until they have a copy of the certificate of appointment in hand,
3. Manage expectations and be very patient,
4. Speak to a branch manager as tellers are often ill-prepared for any conversation about estates.

2. Should I delay telling the bank about the account holder's passing so I can pay various expenses before the accounts are frozen?

No. Simply logging into another person's bank account could be considered fraud even when the will clearly states that you are the executor. One should always work with the financial institution to follow proper procedure in order to avoid making costly mistakes.

3. Should I get an estate loan to cover expenses while I wait for access to the estate's funds?

If you can avoid doing so, then no — the interest rates on estate loans are astronomical (as high as 50%)!

4. Should an account holder place their executor as a joint owner on their bank account to avoid slow bureaucratic processes at the bank?

No. While we all want to believe that unfortunate things only ever happen to other people, the reality is that money tends to create conflict wherever it's given the opportunity to do so. A joint owner can withdraw 100% of the funds from the account the moment the joint ownership is created. The risk of untowardness totally outweighs any benefits to the estate.

5. Should we go to great lengths in estate planning to keep money and assets out of the estate in order to reduce probate fees?

No. People focus on this far too greatly and often end up creating bigger problems for themselves in trying to create loopholes. In Ontario, probate fees are 1.5% of the total estate value less $50,000. Thus, on a $1M estate, probate fees will be $14,250. Relative to other provinces, this is a high fee. However — and this is crucial! — relative to other potential expenses (or losses), this amount is almost trivial. Never forget: probate is good. It protects the executor. 1.5% is a minor irritation.

6. If I shouldn't worry too much about probate fees, is there something else I should be thinking about?

Yes!!! You should be thinking about income tax and capital gains tax! Anything left over in the decedent's RRSP, TFSA, etc. is deemed sold — triggering capital gains tax — and the proceeds are recorded as earned income in the final tax year, triggering income tax. If you haven't planned for this, then the government of Canada will be your happiest beneficiary. Good planning can save tens or even hundreds of thousands of dollars! Don't get sidetracked by probate fees. There are much bigger fish to fry!

7. Is it OK if the executor lives in a different province or country?

Yes, but it's far less than ideal. There are a couple of issues here. First, when the executor lives out of province, the court is likely to order a surety bond. This is essentially an insurance policy in case the executor acts improperly. A bond protects the estate as the provider would pay the estate a lump sum to cover any losses. This may sound great but the problems are:

1. Surety bonds are expensive (1–2% of the estate value), and
2. Their requirement adds one more step in the administration process, which is already hard enough.

Second, an out-of-province executor will have a harder time coordinating the various activities — in particular, managing real property like a house. Generally speaking, it's a lot easier for the executor to get things done with boots on the ground. Overall, an out-of-province executor is doable but it's not the best practice. Avoid if possible.

8. Where does the executor start when the moment arrives?

Assuming the health authorities are involved, the funeral home is the first stop. While there is a lot to do, the executor is responsible for the funeral arrangements and this can't be taken lightly. Everybody needs to grieve. This is a fact that requires the utmost respect of everybody involved. Go at a reasonable pace. The funeral home is also very helpful with notifications. For a small fee (~$250), the funeral home staff will communicate with various government departments to do things like stop payments such as CPP. This is great value — we recommend accepting it. Next, if you're going this alone, next steps include locating the will, alerting the bank(s), and securing real/digital property. However, unless you're in the estate business and already have all the answers, your next step should be to retain a Certified Executor Advisor (CEA) and figure out your next moves in partnership with that person. Your executorship could define the next year or two of your life — don't let it.

9. Is this will valid?

A valid will is one that has been signed by two eligible witnesses (i.e., neither the spouse, nor a beneficiary, nor the spouse of a beneficiary, nor a minor). If it hasn't been notarized then the court will need to contact the witnesses to verify their signatures (what a pain). If the witnesses cannot be located or are deceased, you're in a pickle and the will is probably invalid. Thus, best practice is to have the will notarized. If the will is signed by two witnesses and notarized, then it is likely valid (unless a more recently drafted will appears). Some notary publics will have two people on staff who can be your witnesses (super convenient). Otherwise, getting the will notarized will require the will-maker (testator) to travel to the notary with at least one witness. There is one online/digital provider for notarization — NotaryPro — however, we cannot guarantee that the court will accept digital signatures at this time (adoption varies by courthouse). With the greatest respect for the people at NotaryPro, we do not recommend using their services for wills or powers of attorney at this time.

10. Will Google help the executor access a deceased person's Gmail account?

No. Google and other firms owe their allegiance to their customers. While access to the email tends to make life easier for the executor — i.e., where accounts need to be located/cancelled, business partners need to be contacted, etc. — one should keep in mind that an email may contain a trove of personal communications that nobody should have access to. Privacy may have been important to the deceased person. Also, one needs to consider the privacy of those whom the person communicated with. If possible, the executor should place respect for others' privacy over their own convenience and stay out of the person's email and text messages. All that said, life is much easier when the executor has digital access. After the fact, this can be impossible to attain but things can be done in advance to ensure a smooth transition. Ensuring that photos upload to a cloud account is an important step. In addition, providers like 1Password have succession capability which allows the executor to secure the master password, gaining access to everything. This is a good option as long as one remembers not to commit bank fraud!

11. Can I acquire the family cottage for $1 and avoid paying all the tax?

No. The government will order an appraisal and tax will be paid based on the assessed fair market value. If you are planning on keeping the cottage in the family, there are a couple of things to remember. First, the government will deem the cottage as "sold at fair market value" on the date of death. This will trigger capital gains tax. If the cottage has been in the family for a long time, this could mean that the tax bill will run into the hundreds of thousands of dollars. If you haven't planned to pay this somehow (perhaps using life insurance), you may have to sell the cottage in order to pay this tax. Second, major improvements made to the cottage can be capitalized, increasing the "adjusted cost basis", and lowering the tax bill. Getting all of this organized early is going to be much easier than doing it on the fly. This is one more reason to retain a Certified Executor Advisor today in order to get prepared!

12. Should the will be kept in the safety deposit box at the bank?

No. The bank will not let you touch anything unless you have the will in hand (and usually probated). If the will is in the safety deposit box, the executor faces a chicken-and-egg problem: you can't open the box unless you have the will, and you can't get the will unless you open the box. Executors should get prepared and make sure the will is not at the bank! Lawyer's offices will usually have secure storage for wills and many Canadians opt to use them. If this is where the will is, it's very important that the executor knows about it — for if they can't find the will, then there is no will and intestacy rules apply (a catastrophe!). A great solution for testators is to register the will at the Canada Will Registry so that the executor can search for it and learn about its location when the time comes. Again, proactive executors should initiate the conversation (i.e., Is there a will? Where? Is it current? Is it valid?). Finally, many opt to keep their wills in their homes. If this is your solution, have you done anything to prevent against fire, water, mold, or rodents? If you use a safe, have you ensured that the executor can open it? If the court can't read the will, then there is no will and intestacy rules apply. There's always a catch. This is why many people opt to store their will in a sealed plastic bag in the freezer. All things considered, this isn't as crazy as it sounds.

13. Should I get a lawyer to help me apply for a Certificate of Appointment of Estate Trustee (probate)?

Canadians often turn to lawyers to get the ball rolling. To apply for probate, the executor will need to collect the will, the death certificate, a complete listing of assets and liabilities, and will need to fill out a few forms. These forms are found on the Government of Ontario website. At a minimum, four forms will be required: 74A, 74B, 74C, and the information form. To have a lawyer help with this first step will cost approximately $2,000 in the simplest of cases. An experienced lawyer can usually ensure that the forms will be accepted by the court on the first attempt — a non-trivial benefit given that it can take months for the process to complete, depending on your location. However, starting with a lawyer often means continuing with a lawyer at significant expense due to high hourly fees. If the plan is to work with a CEA (as it should be), it will pay off to do these forms with this person due to the benefits of coordination and lower overall fees in the end.