Before we go any further, however, something important needs to be said, and although it may seem fairly obvious, it is easy to lose sight of this fact in our rush to finish off the estate: Once the cheques have been sent to the beneficiaries, you’ll likely be unable to get the money back. Therefore, as a precaution let’s review some of the tasks that you should have completed by now, remembering that each estate is unique.

All of the creditors should have been paid by now. That means all loans, mortgages, credit cards, invoices, etc. In addition, the executor’s fee should have been paid. Any outstanding tax returns have been filed and resulting income tax paid (and tax clearance certificates received). And, any assets that needed to be sold have in fact been sold.

So, now you have a bank full of money and you’re ready to write the cheques, but have the accounts been passed by the beneficiaries? Passing the accounts is a very important and necessary step, where the beneficiaries review and approve all of the bookkeeping entries, raising concerns as necessary, and they agree to the immediate distribution of the proceeds. Every beneficiary should grant approval, not just the majority, so if any beneficiary does not pass the accounts, regardless of the reason, the executor should apply to the court to have the accounts formally passed. Any concerns can be discussed at that time, and the judge’s ruling will be final.

The accounting data provided to the beneficiaries will also state how much money each person will receive, taking into consideration debts owed by any of the beneficiaries. Many executors keep the beneficiaries well informed along the way, providing regular status reports and addressing concerns as they’re raised. However, in other estates the executor may not have been quite as transparent, so this may be the first time the beneficiaries have seen the figures. Executors would be well advised to manage everyone’s expectations to avoid any hard feelings. For example, just because the house has been sold doesn’t mean the money can be distributed right away.

When distributing physical assets (eg. coin collection) the executor should receive a signed receipt from the beneficiary indicating the item has been received.

Depending on the country the beneficiary resides in, some money may need to be deducted for income tax. It will be up to the beneficiary to claim that money back from CRA by filing an income tax return.

In conclusion, distributing the proceeds of an estate can be the fun part. The beneficiaries have been patiently waiting, and the executor has been working diligently to finish the estate. Carefully ensure that all tasks have been completed, and there shouldn’t be any problems. Measure twice, cut once.

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.

• Estate Taxes: When you die, your estate assets must be inventoried and valued as of the date of death. The sum total of all estate assets is then potentially subject to estate taxes. Your estate may take advantage of the current exemption amount that applies to all estates. The exemption amount fluctuates each year. For 2012 the exemption amount is $5,120,000 — an all time high. For 2013, however, it is set to return to $1 million unless Congress passes a new tax law. All assets above the exemption amount will be taxed. The tax rate also changes each year as a result of the changes in the federal tax laws passed by Congress. Although the tax rate for 2012 is at 35 per cent, that, too, is scheduled to increase to 55 percent for 2013 unless Congress acts. Unfortunately, there is no way to know when you will die or what the current exemption amount or tax rate will be. Planning for the worst case scenario is best.

• Gift Taxes: In the event you are thinking that gifting your estate assets prior to death may be the answer to avoiding estate taxes, think again. Gifts are also taxed if they are above the lifetime exemption amount. These amounts, like the estate exemption and tax rate amounts, are also subject to change on a yearly basis as federal tax laws change. Gift tax rates have historically been between 35 and 55 percent with the lifetime exemption amount around $1 million. That amount is much higher for 2012. Gifts that do not qualify for the yearly exclusion or lifetime exemption will be taxed at the current gift tax rate.

The complex and ever changing tax laws is just one more reason why smart consumers will work with an experienced and qualified estate planning attorney to plan their futures. There is no way that self help trusts available in form books or websites or even so-called non-lawyer living trust mills will contain the up to date critical tax planning provisions that you will get in a comprehensive plan prepared by an experienced and qualified attorney.

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Many people have heard of Probate, yet not nearly as many truly understand what it Probate is not an easy process for your loved It can be costly, time-consuming, and can even produce unwanted hard Watch this short video (4:15) and listen to Jerry Shiles and Larry Parman, attorneys at Parman and Easterday, discuss the pros and cons of They discuss what it means to die intestate; what the process of probate could mean for you and your loved ones; and why and how to avoid it with the help of a qualified Estate Planning

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