Do Beneficiaries Have Rights in Ontario?
Strictly speaking, beneficiaries of a deceased’s estate do not have “rights” per se. Beneficiaries are not entitled to do any of the things that an Executor or Estate Trustee is obligated to do. Beneficiaries are, however, entitled to an accounting of all the dealings of the Executor or Estate Trustee. They are also entitled to have their inheritance paid within a “reasonable” amount of time. If a beneficiary believes an Executor or Estate Trustee is acting improperly, then they are also entitled to apply to the court to have them removed.
An Executor or Estate Trustee has several duties and obligations. Below is a non-exhaustive list of duties:
- Make funeral arrangements.
- Determine, locate, and notify the beneficiaries.
- Provide notice of the deceased’s death to third parties and government agencies, including Old Age Security and the Canada Pension Plan.
- Locate the estate inventory, make a detailed list, identify the value of assets for tax and distribution purposes and, where applicable, take the required steps to secure and safeguard the assets.
- Open an estate bank account following the obtaining of the Certificate of Appointment and keep records of all expenses incurred by or on behalf of the Estate.
- Determine, settle, and pay the outstanding debts of the deceased.
- File tax returns in all necessary jurisdictions, pay taxes owing and, following the payment and assessment of amounts owing from the estate, obtain appropriate tax clearances or releases.
- Distribute the assets as directed by the Will.
An Executor or Estate Trustee has an obligation to administer the deceased’s estate in accordance with the powers and authorizations granted by the Will. In addition, they are in a fiduciary relationship to the beneficiaries. This means they must always act in the best interest of the beneficiaries, and they must treat all beneficiaries with an even hand.
Beneficiaries are entitled to a proper accounting of all the dealings of the Executor or Estate Trustee, which would include a list of the assets of the deceased’s estate as of the deceased’s date of death, and an accounting of the disposition of any estate assets, including if any assets are sold, the values received by the Executor or Estate Trustees (including real estate). Executors and Estate Trustees must produce their accounts to a beneficiary when asked.
A beneficiary also can expect to be paid their inheritance within a “reasonable” time. Many are familiar with the term the “executor’s year”, which is a common law term. It means that the Executor or Estate Trustee has one year from the date of death or of obtaining the Certificate of Appointment of Estate Trustee (also known as probate), to administer and wrap up the estate. Realistically speaking, only the most simple and non-contentious estates are wrapped up within a year. What is a “reasonable” time to make a distribution out of an estate is subjective and depends on the complexity of the estate.
Lastly, if a beneficiary believes an Executor or Estate Trustee is acting improperly or to the detriment of the estate, then a beneficiary can make an application to the Court to have the Executor or Estate Trustee removed. However, be forewarned that a Court will only remove an Executor or Estate Trustee if clear evidence of necessity is provided.
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