Ontario Executor Services – Create Inventories to Value Estate Assets

Suddenly, you learn you are the executor of an estate.

Don’t expect to find neat and up-to-date files called, “My Estate Inventory” or “For My Executor”. Few people are that organized. You must, instead, act like a detective. Remember, you are handling another person’s valuables. Be ready to account for every penny in an estate inventory.

Don’t count every cup and saucer. To comply with Ontario estate administration tax, you must appraise valuables, vehicles and special assets, like artwork, boats, snowmobiles, etc. Details will be required to calculate provincial estate administration tax (EAT). Later you will use this value when you file provincial estate information returns (EIRs).

Use your estate inventory to help calculate taxes. There are two kinds of taxes in most estates; federal income tax and provincial probate tax now called estate administration tax (EAT). Your inventory for federal income taxes also helps calculate capital gains and losses.

Record non-probate assets that pass outside of the will estate. You may not control certain jointly owned or designated assets. These items pass outside of the will. But they can generate income tax bills you’ll pay as executor for the estate. Consider if you need to recover joint assets that belong to the estate. You’ll need legal advice for this.

Why is creating your estate inventory listing all estate assets important? It explains the difference between probate and non-probate assets.

Powers of attorney cease to be effective when someone dies. Notify attorneys to request their financial accounting, if necessary. You can run into attorneys who are bad eggs. Seek legal advice about your options.

Protect creditors and beneficiaries whose rights can often conflict. Pay estate creditors first in case there is a shortfall. In most estates, the federal government, Canada Revenue Agency (CRA), is the largest estate creditor. You don’t have to pay estate bills with your money. Make sure the estate is solvent to pay its bills.

Are there loans or mortgages to pay? You may also need to prepare a debt inventory. Is any life insurance payable to the estate to retire debts?

What Debts Can Be Deducted to Calculate EAT?

Deductions are limited to registered mortgages or lines of credit on real estate. You cannot deduct funeral expenses, credit or debit cards or household expenses from the estate’s value to calculate EAT.

Need Help Creating an Estate Inventory?

I can help you understand your responsibilities as an Ontario estate executor. Do you have questions about what to do as executor? Contact me for a meeting to discuss your needs. I look forward to helping you.

As an Ontario Certified Specialist, estate law is all I do.