Governing Document(s) – If there is a Will, this is the document that usually apoints the estate trustee and is the source of the estate trustee’s authority if appointed therein. However, if the person who wishes to act as estate trustee is not named in the Will, a grant of representation is required to legally appoint the person but the Will still contains the instructions for the overall administration of the estate (e.g. payment of taxes and expenses) and the distribution of property of the testator’s estate governed by the Will.
Other relevant documents in the administration of a deceased’s estate can include: secondary Wills, contracts; investment and plan agreements as well as insurance policies including any beneficiary designations on plans or policies; shareholder, partnership and family law agreements; mortgage and other loan agreements as well as guarantees.
Proof of Authority – This refers to the grant of representation (e.g. letters probate or letters of administration). In most jurisdictions it is not mandatory to prove a Will however there can be benefits to doing it including stopping the running of some limitation periods. If there is no valid Will, or the Will does not appoint the person who wishes to act, then a grant is necessary to establish authority.
Tasks – Every estate is different so it is important for the estate trustees to understand not only the general legal rules but the specific requirements for their estate which is why all relevant documentation needs to be collected up at the start and carefully reviewed. Professional assistance may be needed to understand the contents of the documents such as the Will or agreements to which the testator was a party.
Typical tasks an estate trustee is expected to complete include, but are not limited to: locate and review all governing and other documents; determine whether probate is required and follow necessary procedures if it is; locate and secure all property of the deceased; determine all liabilities of the deceased to creditors and others which may require an advertisement to creditors to be published according to legal practice; develop a plan for the management of the estate property; retain professional advisors to assist as required; file tax returns for the deceased’s year of death, any prior years of the deceased, and any estate tax years; establish any trusts created under the Will and develop a plan for the management of trust property; file tax returns for trust tax years; maintain records of the management of the estate; maintain records of the management of any trusts; report to beneficiaries of the estate and any trusts are appropriate; satisfy all debts of the deceased and obtain discharges; distribute the income and capital of the estate as required by the Will or laws of intestacy for the applicable jurisdiction; distribute the income and capital of any trusts according to the terms of the trusts; obtain releases from the beneficiaries of the estate and any trusts; wind up the estate and any trusts at the required time; pass estate accounts and obtain a discharge from the court.
This is not a conclusive list and the tasks are not necessarily listed in the order to be completed. Estate trustees should obtain professional advice to determine exactly what tasks need to be completed in their particular circumstances.
Coming soon – a PDF checklist for estate administration.