Estates: The Role of the Personal Representative

*Please note that School of Scheff is not legal advice and should not be taken as such. School of Scheff provides legal information which is specific to the Province of Alberta. Should you reside outside the Province of Alberta, please contact a lawyer in your jurisdiction with any legal queries as the laws across the Canadian provinces vary widely.*

Being a personal representative of an Estate is a big job. You may have heard this referred to as being an Executor or Executrix. In the Province of Alberta, under the estate administration legislation we refer to this person as a Personal Representative; but it means the same as Executor / Executrix. In this post we’ll talk about what a Personal Representative is, what they do, and some common questions that arise.

What is a Personal Representative?

As mentioned above, it is also referred to as an Executor / Executrix, and it is the person that is named in a Will or appointed by the Court on application to administer an Estate. The deceased person selects this individual in their Will, or if there is no Will this person applies to the Court to administer the Estate, and they are tasked with settling the estate and distributing the property to the beneficiaries according to the instructions set out in the Will or the laws of the Province of Alberta.

What does a Personal Representative do?

The first thing to know is it’s a job – and its often not very much fun. Many people don’t give much consideration to whether the person they’re appointing as their Personal Representative actually has the requisite skills needed to do the job. When thinking about this, you want to appoint someone who has the skills necessary to carry out the four main responsibilities that a Personal Representative has:

1. Identifying the estate assets and liabilities;
2. Administering and managing the estate;
3. Satisfying the debts and obligations the estate; and
4. Distributing and accounting for the administration of the estate.

Within each of these responsibilities is a set of tasks that must be completed. Each Estate is different and some are more complex than others. Generally a Personal Representative needs to carry out these tasks:

• Make all funeral arrangements.
• Identify all savings and chequing accounts of the deceased. Notify all financial institutions about the death and obtain up-to-date information about the balances on deposit.
• Locate all insurance policies and obtain information about the amount payable on each. Notify the insurer of the death.
• Prepare a detailed statement of assets and liabilities.
• Arrange for storage and insurance of any assets that require it.
• Notify the beneficiaries of the death, if necessary, and advise them of their entitlement under the Will.
• Apply for a Grant of Probate, if required.
• File all income tax returns for year of death and any outstanding from former years, as well as any Estate tax returns, if needed.
• Apply for Canada Pension Plan benefits, if any.
• Pay funeral expenses, income taxes payable and all debts of the deceased.
• Distribute the deceased’s property and make any monetary bequests and distribute specific gifts of property according to the instructions in the Will.
• Arrange sale or transfers of the estate assets to the rightful beneficiaries.
• Pay legal fees and any outstanding fees related to administering the estate, including compensation for personal representative(s).
• Report to the beneficiaries and have them sign legal releases prior to receiving monies from the Estate.

This is certainly not an exhaustive list and there can be many different tasks that pop up as assets are being liquidated or transferred to their rightful beneficiaries. Additionally, each third party that a personal representative deals with such as the Land Titles Office and financial institutions, will generally each have their own sets of forms and processes to follow.

Does my Personal Representative have to do all of these tasks themselves?

No! They can get help from a number of people, most commonly a lawyer, but they may also require the assistance of accounting professionals, investment or financial professionals, or realtors, just to name a few.

What if I don’t appoint a Personal Representative?

If you do not have a Will and therefore, have not appointed a Personal Representative, there are a couple of things that can happen. Dying without a Will is called dying Intestate, and dying with a Will is called dying Testate. There is legislation in the Province of Alberta which sets out what occurs when someone dies Intestate (both with who can apply for a Grant and what happens to their assets).

If the deceased persons assets are such that a grant of probate is required (generally, in circumstances where there is land involved or there are large bank accounts or investments) and there is no Will, then someone can apply for a Grant of Administration (which is very similar to a Grant of Probate).

The term Grant of Administration is used when the deceased person is Intestate and the term Grant of Probate is used when the deceased person is Testate.

Under the Estates Administration Act, the following persons, in this order, have a right to apply for a Grant of Administration:

• the surviving spouse or surviving adult interdependent partner;
• a child of the deceased person;
• a grandchild of the deceased person;
• a descendant of the deceased person other than a child or grandchild;
• a parent of the deceased person;
• a brother or sister of the deceased person;
• a niece or nephew, if the niece or nephew is a beneficiary under the intestacy;
• the next of kin of the deceased person determined in accordance with sections 67 and 68 of the Wills and Succession Act who are beneficiaries under the intestacy and who are not otherwise referred to above;
• a person who has an interest in the estate because of a relationship with the deceased person;
• a claimant;
• the Crown in right of Alberta.

All of the individuals in the level above you have to renounce their right to apply before anyone in a level below would be able to apply. I.e. in this list, the spouse or AIP would have to renounce, then a child could apply. If there were multiple kids, all of the kids would have to renounce before a grandchild could apply. And so on, and so forth.

Do I have to accept an appointment as a Personal Representative?

No! This is a common misconception. You are under no obligation to act as a Personal Representative. If you are appointed as a Personal Representative under someone’s Will, you do not have to accept the appointment and instead can renounce. To do this, you must fill out a form which in Alberta is called a GA11 – Renunciation.

Can I get paid for my work as a Personal Representative?

A Personal Representative has the right to be paid for their work in administering the Estate. If the testator has made no provision for payment in the Will, then the Personal Representative can make a claim for financial compensation before the Court of Kings Bench Surrogate Court. It’s also important to note that Personal Representative fees are taxable as employment income. Additionally, Personal Representatives also have the right to be reimbursed for all reasonable expenses made while administering the estate.

Do I inherit the debts of the deceased / can I be held liable for the deceased debts if I act as the Personal Representative?

Generally, no! This is another common misconception, especially among children with parents who may be experiencing monetary challenges. Usually, one of the only circumstances in which the personal representative may be liable for a debt of a deceased person is if the personal representative is also a joint debtor. For instance, if two spouses both own a home and have taken out a mortgage, and then one spouse dies. The surviving spouse is very often appointed as the personal representative and because this mortgage was a joint debt to begin with, it remains a joint debt in death. If the deceased person is the only person responsible for the debt, then the debt is dealt with in the course of the estate administration. If the deceased person’s liabilities exceed the assets that they have at the time of their death, then the Estate can be bankrupt. In this case, the creditors get a share of what is left after limited expenses are paid – usually, funeral expenses, legal fees, and personal representative expenses – and unfortunately, the beneficiaries do not receive any funds from the Estate.

To Conclude…

Serving as a Personal Representative is a significant responsibility that involves a wide range of tasks and obligations, as such, it is essential to choose a capable individual for this role. Navigating the role of a Personal Representative can be challenging, but with proper guidance and understanding, it becomes a manageable task in the process of settling an estate.

If you require assistance with the administration of an Estate, please get in touch with my office at 403-328-1766.