Dealing with an estate

Generally, an estate is the assets a person owns when they die. 

Assets are anything worth money.  For example:

• house or condo
• any other land
• bank accounts
• investment accounts and GICs
• valuable jewelry
• valuable artwork
• other household and personal items
• car(s) and other vehicles.

Pets are also assets, as the law thinks of animals as personal property 

An estate typically excludes:

• assets with a named beneficiary. Here are some examples:
  • registered savings accounts that name someone to get the money directly, like RRSPs, RRIFs, and tax free savings accounts (TFSA)
  • pension plans
  • life insurance policies.
• property that the person who died own jointly with someone else, with right of survivorship. For example, if spouses own their home as ‘joint tenants and not as tenants in common’, the home goes directly to the surviving spouse.

When a person dies, these types of assets are said to “pass outside the will”. For example, the bank or trust company transfers the RRSP or RRIF, or pays it out, to the named beneficiary.  This payment does not take into account tax consequences, which must be paid out of the assets that pass through the will. The same is true if there is life insurance that names a beneficiary, although typically, there are no tax consequences for life insurance proceeds.  If the person who died named their estate as beneficiary instead of a person or charity, the money goes to their estate and would be distributed as they directed in their will. 

Assets shared with a spouse or minor children go to the surviving owners.

Shared assets with anyone else, including adult children, are not automatically assumed to go to the survivor owner. For jointly owned accounts, the account may legally pass to the joint owner according to the financial institution paperwork, but the joint owner may then have a legal responsibility to share that account with other beneficiaries of the estate. 

If it is unclear what the person who died wanted to happen with shared assets or if there is a dispute, the executor or administrator of an estate should seek legal advice.

If a person owes debts when they die, like unpaid credit card bills and income tax, the executor or administrator of the estate must first pay those debts out of what is in the estate. Only what is left after all debts are paid may then be given out based on what the will directs or based on the rules that apply when a person dies without a will.

Secured debts (for example, a mortgage) and a surviving married spouse’s or registered domestic partner's interest in the matrimonial home have priority.

If the estate does not have enough assets to pay all the estate debts, the estate is called insolvent. Debts for an insolvent estate must be paid out of what is in the estate in the following order of priority:

• taxes owed to the Canada Revenue Agency
• funeral expenses including a reasonable headstone
• probate taxes and court fees
• executor’s commission and legal fees (treated equally)
• reasonable medical expenses in the last 30 days of the will-maker’s life
• all other debts.

The estate’s debts, including taxes, must be paid before assets are distributed to beneficiaries.  If a personal representative distributes assets before all debts are paid,  they may be personally liable for those debts.

A person who makes a will is called a testator.  If you die without a will, you are said to die intestate.

Nova Scotia’s Probate Act uses the term personal representative to refer to both an executor and an administrator of an estate.

An executor is a person or corporation named in a valid will to carry out the terms of that will. 

An administrator is a person appointed to look after the estate of an individual who dies without a will – that is, a person who dies intestate, or who had a will but did not appoint an executor.  There is a list in the Probate Act of people who are entitled to apply to court to administer an estate.  A surviving married spouse and adult children living in Nova Scotia are at the top of the list, followed by adults who live in Nova Scotia and who are entitled to a share of the estate under the Intestate Succession Act.  The Intestate Succession Act is the provincial law that applies when someone dies without a will.

Probate is a legal process that establishes that a will is the valid last will of the person who died. It is also the process that governs management and distribution of an estate, whether or not there is a will. A grant of probate or administration is a document from the Probate Court that gives a personal representative legal authority to deal with the estate.

Nova Scotia’s Probate Act and regulations outline the rules for probating an estate.

No.  If you do not want to be Executor tell your family member or friend at the time the will is being written. 

If the person who wrote the will has died, you are still allowed to renounce, which means resign or step down, if you do not wish to act as the Executor.  To renounce you would need to contact the Probate Court and fill out a form giving up (renouncing) your right to be Executor, and confirming that you have not intermeddled in the estate.  Intermeddled basically means interfering with the estate, or doing things that show you've taken on the job of managing the estate.  If you do not wish to be Executor it is best to step down before you take any steps to deal with the estate.

You do not need any specific skills or experience to be an Executor, although it helps if you have some business knowledge.  It does require time and attention.  In some cases, for example - a will that involves a trust fund for children, it can include responsibilities that may last for years.  Also, as an executor you can be held legally responsible for any errors or omissions you make in dealing with the estate. 

In some situations, an executor’s job is straightforward and relatively simple.  In other cases it can be very complex.  It depends on the size of the estate and other factors, including:

• how many beneficiaries there are;
• whether the testator owned a business;
• whether the testator had investments and debts;
• whether someone is challenging the will;
• whether the testator established trusts in their will.

You are not required to hire a lawyer. You are allowed to go to Probate Court and file the necessary papers without a lawyer.   However, you should consider the complexity and size of the estate when deciding if you are able to handle the interpretation and distribution yourself.  You may be held personally liable if the duties are not carried out properly. Here are some tips for finding a lawyer, if you decide to hire one.

The Probate Court provides information, including check lists and forms, for personal representatives who are dealing with an estate without a lawyer. Visit courts.ns.ca and look under ‘Probate Court’ and ‘represent yourself’, or look under ‘courts’ in the government section of the telephone book for probate court locations.

A personal representative’s duties will vary depending on the complexity of the estate.  As an estate’s personal representative you should keep very accurate and detailed records. If you are concerned about whether you are fulfilling all your duties as personal representative, you should speak with a lawyer. 

Some of the duties you may have as an estate’s personal representative are listed below:

• You may play a role in funeral arrangements, depending on the deceased’s wishes and those of their family.   You may be able to take funeral bills to the deceased’s bank and have a cheque drawn on their account to pay them, as long as there is enough money in the account;
• Open an estate bank account;
• Take steps to protect the estate’s assets.  For example, make sure assets are insured, change the locks on an apartment or house, secure valuables in a safety deposit box or other suitable storage;
• Check that proper insurance is still in effect as some insurance policies are automatically invalidated if a residence is left vacant; 
• Make an inventory of all estate assets and debts;
• Make sure estate debts are paid first, out of what is in the estate;
• Cancel the deceased’s charge accounts and subscriptions, and contact Canada Post to have the deceased’s mail redirected;
• Contact the Canada Pension Plan and the deceased’s employer, in case there are benefits which should be part of the estate.  For Canada Pension, this may include a death benefit, survivor’s pension, and/or children’s benefit;
• Apply to Probate Court for a grant of probate or administration.  Probate is generally required before a personal representative will be allowed to deal with the estate’s assets, particularly if there is land or a house that is only in the deceased person’s name, and/or if financial institutions require it.  You should inquire directly with the financial institution involved as the practices of institutions differ; 
• Make sure that appropriate tax returns are filed, and that any income tax owed by the estate or the deceased person is paid.  Get a Clearance Certificate from the Canada Revenue Agency;
• After estate debts are paid and a clearance certificate obtained, distribute the estate assets according to the terms of the will or Intestate Succession Act if there is no will.

The Probate Act gives you:

• 20 days from the date of getting a grant to notify all persons entitled to share in the  distribution of the estate;
• 3 months from the date you get the grant to file an inventory of the estate with the Probate Court.  Items such as inexpensive personal clothing or anything jointly owned with another person don’t need to be included in the inventory.

Before the estate can be distributed to the beneficiaries, you must advertise in the Royal Gazette that the deceased’s estate is being probated, and that creditors who may have a claim on the estate should come forward.  This advertisement period lasts for 6 months. The Royal Gazette, Part 1, is Nova Scotia's official government record of proclamations and other required legal notices. For more information about the Royal Gazette, and fees for placing an estate notice, go to  gov.ns.ca/just/regulations/rg1/index.htm or call (902) 424-8575.

The estate’s debts, including taxes, must be paid before assets are distributed to beneficiaries.  If you distribute assets before all debts are paid, you may be personally liable for those debts.

Yes, there are circumstances under which the Probate Court may remove an estate’s personal representative and appoint another person in his or her place.  Under the new Probate Act the Court must be satisfied that a personal representative’s removal would be in the best interests of the persons interested in the estate.  The Act sets out specific reasons for removal, including if the personal representative:

1.    fails to comply with a court order;
2.    becomes insolvent or mentally incompetent;
3.    neglects to administer the estate;
4.    wastes the estate;
5.    is convicted of theft and/or fraud offences under the Criminal Code of Canada.

A Personal Representative may also apply to Probate Court on his or her own behalf to be allowed to step down from his or her duties.

The Probate Court may allow you a commission of up to 5% of the value of the estate, unless the will states otherwise.  This is above and beyond any out-of-pocket expenses you may have had while carrying out your responsibilities.  The amount of the commission is based on the complexity of and work involved in probating the estate, the success of the estate under your management, as well as other factors.

Probate forms are available from your local Probate Court, listed under ‘Courts’ in the government pages of the telephone book, or visit www.courts.ns.ca for probate court locations and contact information.

• The Probate Court in each of Nova Scotiaís probate districts has information available to the public. You may obtain copies by visiting or by calling your local Probate Court office or by going to the Representing Yourself section of the Courts of Nova Scotia website. The phone number for your local Probate Court office should be listed in the blue government pages of your phone book under "Courts". 
  
  The information available from the Probate Court includes:
  -The Probate Act - Questions and answers
  -Dealing with an estate 
  -Passing the accounts of an estate in Probate Court - checklist
  -How to prepare the final account of the personal representative

• A lawyer in private practice who deals with probate, wills & estates
• Legal Information Society of Nova Scotia for free legal information
• Notify the federal government of a death
• Canada Revenue Agency (tax issues) - 'What to do following a death'
• Nova Scotia Public Trustee Deceased Estate Services: novascotia.ca/just/pto/services_ea.asp
• Nova Scotia Government publication (2017): 'After the loss of a loved one: a guide to legal and emotional concerns (pdf)
• Vital Statistics Nova Scotia (death certificates): novascotia.ca/sns/access/vitalstats/death.asp
• Department of Community Services Nova Scotia (funeral expenses):  http://novascotia.ca/coms/department/contact/
• Grief counselling and support: ask your healthcare provider, funeral director, or Canadian Mental Health Association-Nova Scotia.  You can also call 211 or go to www.ns.211.ca/ to find grief support services near you