Executor Living Outside Ontario: Practical Steps for an Ontario Estate

Being named executor of an Ontario estate while living in another province or country is common. The tasks are the same as for any executor, but you have to do them by phone, mail and through people on the ground.

This article walks through the practical points: whether to act, bond and tax questions linked to where you live, dealing with banks and property, and the filings that cannot be skipped.

Decide whether to act before you start

A person named as estate trustee in a will does not have to act, and if they decline, the beneficiaries may nominate another person. This matters most for far-away executors, because stepping back after you begin is harder. The Trustee Act's out-of-court retirement procedure does not apply to executors or administrators, and an estate trustee who wants to step down after acting generally needs a court order.

If you are unsure, talk to the other beneficiaries and a lawyer before you take any steps as executor.

How your residence can affect bond and tax

Letters probate may not be granted to a person who lives outside Ontario and outside the Commonwealth unless they give security, or a judge dispenses with or reduces it in special circumstances. Ontario.ca states that a bond is needed for a named executor only when the applicant does not live in Ontario, another province or territory, or a Commonwealth country.

For tax purposes, an estate resides where its central management and control actually takes place, and the executor's residence does not always decide this. An executor managing from abroad can affect the estate's residence. If you live outside Canada, get tax advice early, because the result depends on the facts.

Banks, property and records from a distance

A continuing power of attorney for property ends when the grantor dies, and from the date of death the estate trustee named in the will deals with the deceased's property. Your duties include finding the will, winding up the deceased's affairs, paying taxes, bills and other debts, and distributing what remains to those entitled.

Estate trustees must keep accurate records of the assets and transactions in the estate. Remote management makes this more important, not less.

• Keep one file, paper or digital, for every receipt, statement and email about the estate.
• Use an estate account rather than your personal account, so each transaction is easy to trace.
• Ask for written confirmations from banks, insurers and anyone you hire locally.
• Invest only with the care, skill, diligence and judgment of a prudent investor.

You may need local help, such as someone to check on a house or a lawyer to handle filings. A trustee who believes an expense is properly incurred in carrying out the trust may pay it directly from trust property, or pay it personally and recover the same amount. The Superior Court of Justice may later disallow a payment if it finds the expense was not properly incurred. Keeping invoices and a note of why each cost was needed protects you.

Tax filings and Ontario filings you cannot skip

Within 180 calendar days of receiving a certificate of appointment, the estate trustee must file an Estate Information Return with the value of the deceased's assets at death. For applications made on or after January 1, 2020, no Estate Administration Tax is payable if the estate is $50,000 or less, and above that the tax is $15 for each $1,000 (or part) over $50,000.

An estate can be a graduated rate estate for up to 36 months after death, and if it winds up earlier, its tax year ends on the date of final distribution. The legal representative must make sure the returns are filed and any balance owing is paid before distributing, and should apply for a clearance certificate as needed. A clearance certificate is requested on Form TX19, and only after the required returns are filed and assessed. Distributing without one makes the legal representative personally liable for unpaid tax, up to the value of the assets distributed.

What to do next

• Decide whether you will act or decline in writing.
• Find out whether the court will expect a bond based on where you live.
• Line up an Ontario lawyer or accountant who can attend to local matters.
• Open an estate account and start a transaction log.
• Calendar the 180-day Estate Information Return and tax deadlines.
• Hold off on distributions until tax clearance is dealt with.

Executors may be entitled to compensation for their work, and fees paid to an executor are taxable. Ask a lawyer or accountant how that applies to you.

Frequently asked questions