How to Clear Estate Settlement Hurdles With Ease
If your executor is a loved one, when you pass, their immediate focus will be on making arrangements and getting through the emotional weight of your loss.
Completing estate administration tasks may not be top of mind.
Since settling an estate has many hurdles – and clearing them can be time-consuming, frustrating, and unexpectedly complicated – it’s important that your executor is prepared so they can keep their focus where it’s needed.
This month’s article discusses how a thorough estate plan can help your executor clear settlement hurdles with ease, covering:
Probate: Timing and a Missing Will
Most estates require probate – a court process that confirms a will is valid and current – and that the person named as the executor is willing, eligible and able to act.
Depending on where you live and how busy the courts are, completing probate may take anywhere from only a couple of weeks to many months.
If your executor needs access to bank accounts to pay expenses, that delay can quickly become a big problem.
Another common hurdle is locating your original will. In most cases, your executor will need the original signed document to apply for probate.
You can minimize the impacts of these hurdles by:
- Structuring your affairs to reduce or avoid probate
- Keeping a reserve of accessible funds for immediate expenses
- Storing the original will in a secure location known to your executor
To learn more about probate and strategies to avoid it, read our blogs – Probate by Design and Surviving Probate Delays
Missing Documents and Incomplete Records
Many first-time executors feel overwhelmed, and with little direction, don’t know where to start.
They may not know where to find bank statements, insurance policies, investment records, property documents or a full list of debts.
And the job gets much harder if they can’t find passwords and digital access information.
Without a current inventory of vital information, your executor may spend weeks searching, calling institutions, and waiting for answers – causing delays and frustration.
You can make a meaningful difference by:
- Keeping an updated list of accounts, policies, assets, liabilities, and digital assets
- Including institution names, policy and account numbers, and contact information
- Maintaining a separate, secure list of passwords and digital access details
- Reviewing and updating these lists regularly and after life events – like divorce, marriage, births
- Showing your executor where these records are stored
Review our Family Playbook to learn how we can help you streamline your document organization.
A little organization now can save your executor and family a great deal of time and stress later.
Banking Hassles and Immediate Cash Needs
Once a financial institution is notified of a death, accounts are usually frozen until an estate account is established. That can create immediate practical problems.
In many cases, probate will be required. If not, banks may still ask for consent from all beneficiaries, which can become a challenge if someone is difficult to reach.
And before the estate account is ready, your executor may have to pay funeral expenses, legal fees, probate fees and other urgent expenses.
This can create a heavy strain, especially if they don’t have the funds and are a loved one who is also grieving your loss.
Reduce this risk by:
- Keeping at least one account with accessible funds
- Setting up auto bill payments where possible– usually banks allow these payments to continue
- Asking your main financial institutions in advance how they handle estates
- Setting up a cash reserve or insurance policy for a loved one to help cover short‑term needs
When your executor or a loved one has immediate access to funds, the whole process becomes far more manageable and less stressful.
Family Conflict and Disputed Wills
Even when you have clearly stated your intentions in your will, loved ones may not agree with them.
If your executor is also a beneficiary, which is very common, there may be questions about fairness, impartiality, or speed of administration.
Disputes may arise over whether the:
- will is valid and the most current version
- will was made under pressure or at a time of mental decline
- distribution feels unfair
- named executor should be acting at all
- executor is moving too slowly or not communicating enough
Such disputes can greatly extend settling an estate. They can also drive up legal costs and create long-lasting damage between family members.
To learn more read our blog – Protect Your Family From Estate Disputes
Reduce the likelihood of conflict and disputed wills by:
- Working with an experienced estate lawyer to prepare a clear, well-drafted will
- Updating your will after major health changes or life events
- Regularly reviewing your beneficiary designations
- Having honest, respectful conversations with loved ones about your wishes, where appropriate
- Leaving a letter of explanation to help clarify your wishes
You may not be able to prevent every disagreement, but you can make your intentions clear and easy to understand to ease potential family tension.
Beneficiaries – Title Issues – Foreign Assets
Some of the most challenging estate problems and often the biggest hurdles are the ones that may catch your executor off guard, including:
- Named beneficiaries who have moved, changed names, or lost contact with you or family and are difficult to locate
- Named beneficiaries on registered accounts or insurance policies that don’t align with beneficiaries in the will, creating confusion or unintended disbursements
- Registered title for property ownership that does not match what’s stated in the will can also create delays
- Foreign assets creates complexity – your executor may encounter issues with estate administration regarding their authority in a foreign country causing delays
To learn more, read our blogs – Outdated Beneficiaries Could Blow Up Your Estate Plan and – Property Ownership Assumptions that Can Derail Your Estate Plan
You can help avoid these problems by:
- Keeping beneficiary contact information current
- Coordinating RRSPs, RRIFs, life insurance, joint accounts, and other beneficiary designations with your broader estate plan
- Updating property ownership records when your circumstances change
- Ensuring your will and title documents are consistent
- Getting professional estate advice for your foreign assets
These details may seem small now, but they can create major delays and stress later.
CRA Clearance: The Tax Hurdle
Tax is often the final hurdle in estate administration.
Your executor must file the deceased’s final tax returns and pay any taxes owed. Only then can the Canada Revenue Agency (CRA) issue a clearance certificate.
That certificate is an important step before the estate can be fully closed and assets distributed.
The challenge is that this process can take up to one year, and in complex estates, it could take longer.
Because executors can be personally liable if assets are distributed too early, many wait for the clearance certificate to be certain no further taxes are due, which can be frustrating for beneficiaries.
You can make your executor’s job easier by:
- Keeping financial records organized throughout your lifetime
- Paying taxes due yearly
- Working with a tax professional who understands estates
- Working with your accountant to optimize tax outcomes in advance, especially if you have RRSPs, RRIFs, business interests, or other complex assets
Good tax planning can save your executor an enormous amount of uncertainty.
Clearing Estate Hurdles for Your Executor
There’s no getting around it – estate settlement is rarely quick or simple.
It involves legal steps, financial administration, tax filings, and potentially family disruption.
Yet, many of the biggest hurdles can be avoided or managed easily with a thoughtful estate plan.
When you keep your will safe and accessible, organize documents and passwords, update and coordinate beneficiary designations and prepare for up-front expenses, you simplify and expedite the process.
Clearing a path for your executor eases their stress and gives them and your beneficiaries the gifts of clarity, receiving a faster inheritance and peace of mind.
Author: Janet Jackson, Contributor: Jill Chambers
Financial Concierge™ offers Professional Executor and Power of Attorney services to assist with executor, attorney duties or help with managing daily financial activities. Learn more about Financial Concierge™ here.
DISCLAIMER: This blog is not intended to be legal or financial advice and should not be construed as anything other than for information purposes.
