Generating a List of Assets for the Estate

When someone dies they are deemed to have sold all of their assets at fair market value immediately before death. So, the big question is, what did they own, and what are the values? Answering this question is one of the first big tasks in settling an estate… generating a list of assets and liabilities, as of the date of death (ie. Balance Sheet). The contents of the balance sheet will be used by the person preparing the probate forms, either the executor or their lawyer.

Generating a list of assets can be very easy in many estates, but very complex and frustrating in other estates. Firstly, is there a will? If there is, then the bank will likely share information with you, such as account numbers and balances. But if there’s no will then most companies will refuse to provide any information due to privacy concerns. Write letters to any banks, financial institutions, insurance companies, service providers, pension offices… everyone who the deceased did business with. Ask them for account numbers, values and any other details you can think of, with respect to the assets (possibly) owned and debts owing.

Most people are helpful, but sometimes you’ll hit a dead end, in which case you’ll have to dig deeper. Search through the deceased’s home. Look in filing cabinets, desks, closets, boxes, drawers. Speak with their lawyer, accountant, financial planner, relatives, friends. Contact any and all companies whose documents you find. And if you ask yourself, “Should I bother contacting this company?”, my answer would be, “For the price of a stamp, why wouldn’t you”.

Seek whatever help you may need to establish market values, such as professional appraisals for jewellery, antiques, real estate and companies. Calculate interest earned up to the date of death on financial investments such as bonds and GIC’s. Research those stock certificates you found in the safety deposit box. The company may have changed its name or been sold.

The CPP Death Benefit as well as the final pension cheques need to be shown as assets, even if they haven’t arrived yet. And then there’s the assets that can easily get overlooked, such as the damage deposit from the apartment rental, or the trust/comfort account at the care home. The condo or timeshare in Florida needs to be shown. Insurance policies where there is no named beneficiary must also be included, because the estate will be the beneficiary.

You do not need to include joint bank accounts where there’s a right of survivorship, or real estate owned in joint tenancy, because the surviving owner simply continues to own them.

Now that you have your list of assets & liabilities, what’s next? In most cases, filing for probate.

Gregg Medwid is the owner and president of Executor Support, a firm based in Coquitlam, British Columbia, with expertise assisting executors and administrators in settling estates. The project management expertise and customer service focus Medwid brings to Executor Support ensures questions are answered and help is given when it is most needed.

This article is in no way intended to substitute for competent legal advice.

Gregg Medwid, Owner
Executor Support
gregg@executorsupport.ca
604-999-2106
http://www.ExecutorSupport.ca

Assets That Do Not Form Part of the Estate

When somebody die, they are deemed to have sold all of their assets just before death. Of course, in reality, nothing has been sold yet, and it will be up to the executor to sell or bequeath the assets of the estate, following the terms of the will. However, in many estates there are assets which are not owned by the estate. But how can that be? How can the assets be owned by the deceased while he was alive, but not owned by his estate after death? If the estate doesn’t own those assets, who does?

Some assets are owned jointly, with each owner having the right of survivorship. For example, a joint bank account. Each of the two owners owns the entire bank account, and when one of them passes away, the name of the deceased is removed from the account, leaving the survivor as the only owner. The estate is not the owner of that bank account, but rather the survivor is the owner. Another common example is the family home, which is often times owned by a couple in joint tenancy. When one of the two owners dies, the name of the deceased is removed from title, leaving the survivor’s name on title. Once again, the house does not form part of the estate.

There are other common examples, too, such as insurance policies and retirement savings. Most insurance policies and retirement savings accounts have one or more named beneficiaries, so the proceeds of the policy will go directly to the named beneficiaries, meaning the policy and RRSP/RRIF do not form part of the estate.

If you need to file for probate, only those assets owned by the estate will get included, meaning you will not have to pay probate fees for those other assets. So why then are insurance policies sometimes included in the probate application? If the policy owner never named a beneficiary, or if the beneficiary died, then the estate becomes the beneficiary, meaning the value of the policy needs to be included in the list of assets, on which probate fees are calculated.

By now some of you might be thinking you could save a lot of time and money if you became a joint owner on your parents’ house. You’d save on probate fees, and you might even eliminate the need for probate altogether. Well, you’d be correct on those two points, but there’s more to consider, especially for your parent(s), so you’d be well-advised to speak with an accountant before going on title.

Sometimes real estate is owned by two or more people as Tenants in Common, rather than Joint Tenancy. If one of the owners dies, that person’s share of the property forms part of the estate, can be sold or bequeathed, and does not automatically transfer to the surviving owner(s). You’d rarely see this type of ownership for the family home, but you would frequently see it for investment properties.

Gregg Medwid is the owner and president of Executor Support, a firm based in Coquitlam, British Columbia, with expertise assisting executors and administrators in settling estates. The project management expertise and customer service focus Medwid brings to Executor Support ensures questions are answered and help is given when it is most needed.

This article is in no way intended to substitute for competent legal advice.

Gregg Medwid, Owner
Executor Support
gregg@executorsupport.ca

Say Goodbye to Clutter (part I)

It Can Be Done

Before many members of the boomer generation can get on to the business of finding and planning the home of their dreams for their next stage in life, they need to develop a strategy that will allow them to go to the next- stage housing , clutter free. There are more avenues for disposing and distributing unwanted belongings than ever before, but it critical to understand your objectives. Is getting money your primary motivation? Do you just want your things to go to a good home and become useful again? Do you want your excess possessions to support the work of non-profits? Are you concerned about the environmental impact of discarding so much stuff? How can you keep the cost under control?

We have helped countless families through the process and have learned a great deal concerning what works and what doesn’t. It is hard to do when you don’t have a plan. If you have already found a new place, you will need to evaluate all of your current belongings for their suitability and practicality. Measuring rooms and furniture is mandatory. If you haven’t decided where you are going, you still need to examine what activities need to continue in a new environment, and which belong to a past life. Then figure out which possessions are associated with those interests, work and pastimes and downsize accordingly. The following are the critical factors to keep in mind when undertaking a project of this magnitude:

1. Don’t Underestimate

The TV shows that demonstrate how to de-clutter have motivated thousands confront their demons around stuff. However, sometimes they give the impression that results are instantaneous. As the Australian study “Stuff Happens” Unused things cluttering up our homes confirms, people who have lived in places for a long time, generally have more work to do. We recommend beginning 6 months to a year in advance of a proposed move to sorting and purging. You don’t want to get into a time crunch that forces you into making bad decisions, or worse, taking things with you that won’t fit with the new décor or lifestyle.

2. Start with Areas of the House You Are Not Using

Some of the most cluttered areas in homes are rooms that are being used for storage, like spare rooms, basements and garages. If you find the idea of getting rid of things to be daunting, these areas generally contain articles that are rarely if ever utilized.-discarded clothing, extra sets of dishes, holiday decorations, old blankets, schoolwork, furniture that has replaced in the front rooms, etc. all seem to wind up in these rooms. It is a good place to begin, as decisions will be easier to make.

3. Stick with One Room at a Time

Whatever you do, don’t fall victim to zigzagging. That’s when you start in one area, go into another room to get something, become distracted by a project that requires attention, and open a second front of de-cluttering. This is a success- prevention strategy of the first order. You will feel like nothing gets accomplished and you will create at atmosphere that will dissolve into chaos

4. Sort by Category

No matter where you start, arm yourself with boxes and appropriate containers fro sorting. Decide on what you want to take to the new place that can be packed up and labeled until you move and designate an area for storing it- either inside or out of the home. Key categories include Donate, Toss, Sell, Move to Another Room and I Don’t Know. There can be sub-categories for sale to consignment, on-line or garage sale.

5. What About Emotional Attachment?

Many people maintain a strong emotional connection to specific items. Sometimes we feel that we are the custodians of our family’s legacy, embodied in the heirlooms we inherit. People feel guilty if they choose to part with these. It is often easier if you can photograph something, incorporate it in an art project or find somewhere to donate this type of things where it will be appreciated by the recipients. If you have a large collection, it is permissible to save a representative portion and allow yourself to donate what you don’t have room for.

As easy as they may seem, these first 5 steps will require time and effort to accomplish.  Thus, I will stop here for this week and let you get started.  The next 5 steps will be posted next week so don’t miss out!

If you have any question, simply comment below or even better, contact us at Good Riddance! We’d love to hear from you.

Susan Borax
E: goodriddance@shaw.ca
P: 604 421 5952

Susan Borax and Heather Knittel

Co-author of Good Riddance: Showing Clutter the Door.
Good Riddance Professional Organizing Solutions
Practically Daughters Senior Move Managers

www.goodriddance.ca

An Introduction to Executors and Probate

It is no wonder there is confusion around executors, estates and probate. No one wants to consider their own demise so discussions tend to be avoided. Death, however, is a certainty, and with this in mind you need the basics in place to protect your loved ones.

In this article, I will explain what an executor does, why you need one and will also provide an introduction to probate.

An executor carries out your final wishes as detailed in your will. When there is uncertainty, your executor plays a part in sorting through the details and in essence, does their best to act as you would in distributing your assets within the confines of the law. Without a will, an administrator is selected. This individual manages the estate similarly to an executor; however, the absence of a will can make for a much more involved process.

While an executor may or may not be a beneficiary, it is essential that the person you assign is responsible, organized and a good communicator. Communication plays a key role as managing an estate can be complex and an executor must keep the family and other beneficiaries informed at all points.

Among their first tasks, the executor arranges a funeral and informs others of the death. Informing extends beyond friends and loved-ones to organizations such as government agencies, banks, etc.

The executor must also complete the very detailed task of settling the estate. This begins with cataloguing all assets and liabilities and determining what items form part of the estate and what passes directly to a beneficiary. Assets with an assigned beneficiary (RRSPs, insurance products, etc.) will avoid going through probate which is another reason why pre-planning will benefit your family.

Because the process of taking inventory of assets, settling debts, and liquidating the estate can be complex and take a long time, detailed financial records must be kept for all amounts flowing into and out of the estate. Additionally, the final tax return must be prepared and submitted by the executor, as well as possibly a tax return for the estate itself.

Probate certainly has its myths and uncertainty. Most people have heard of probate, but have little understanding of how it works.

For estates with a value of more than $25,000, probate is usually required. Probate grants the executor the authority needed to settle the estate by proving that the will, and the executor’s role, is valid to banks, pension offices and other organizations.

Within the Lower Mainland, there are probate registries in Vancouver, New Westminster and Chilliwack, with others around the province. Probate filing documents can be prepared by the executor (a kit is available in many office supply stores) or by a lawyer, and must include the list of assets and liabilities with values. The fee to file is $200 plus probate fee – approximately 1.4% of the value of assets within the estate.

Generally the courts will process the application within 2 to 3 months granting the executor the authority necessary to finalize details of the estate.

Obviously the process can be time-consuming and up to 5% of the value of the estate is available for the executor for their service, however, it is important to note that this money comes out of the estate and will reduce the asset value available to beneficiaries.

Mortality is far from a fun topic, but planning and preparation will make things easier for your executor and loved ones. No one has yet figured out how to live forever, so take the time now to ensure your estate is in order.

    Gregg Medwid is the owner and president of Executor Support, a Coquitlam based firm with expertise assisting executors and administrators in settling estates. The project management expertise and customer service focus Medwid brings to Executor Support ensures questions are answered and help is given when it is most needed.

This article is in no way intended to substitute for competent legal advice.

Gregg Medwid, Owner

Executor Support

gregg@executorsupport.ca

604-999-2106

http://www.ExecutorSupport.ca