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Why You Shouldn’t be Paying for Estate Expenses Out-of-Pocket

If you are acting as Executor, Administrator or Personal Representative for an estate, one of the last things you should do is pay estate expenses with your own funds in the hope of being reimbursed from the estate.

What are estate expenses? Well, estate expenses can be a variety of things that the estate would have to pay for: property taxes, property insurance, maintenance fees associated with estate property (utilities and the like), accounting fees, legal fees, debts of the deceased that were still outstanding at the time of his/her death and, of course, funeral expenses.

Why shouldn’t you pay these in anticipation of being reimbursed by the estate? Because in many instances, estate funds will be frozen in an estate account by the bank until such time as a Grant of Probate is obtained by the Executor. Meaning that the Executor will not be able to reimburse him/herself until Probate is granted. The next question becomes: what is Probate?

Probate is an application to the court to confirm the validity of the Will and authorize the person appointed therein to act as the Executor. (If there was no Will, then a Grant of Administration will be required to confirm the appointment of a relative who volunteers to handle the deceased’s estate). The process and paperwork required to obtain a Grant of Probate (or a Grant of Administration) can sometimes be complex. Moreover, the Surrogate Court backlog in Alberta (because of their Covid 19 policies and procedures) has resulted in as long as a 6-12 month wait from the date you submit the application until the date the Grant is issued. Estate expenses can add up quickly and funeral expenses can be a very heavy financial burden for an Executor to carry for 6-12 months.

So what should the Executor do? The Executor should bring all invoices and bills directly to the bank where the estate account is located and have the bank render payment on behalf of the estate. If there are not enough estate funds to pay funeral expenses, then the Executor should speak with the funeral home to arrange for payment via the Government of Alberta’s Funeral Benefit Program. To qualify for the program the deceased must have either been receiving Income Support, AISH or qualify as low income. For more information, click here.

Should you have any questions or concerns about this process or the process of obtaining a Grant of Probate or Administration, contact our office. One of our Certified Executor Advisors would be happy to assist you.

© 2023 Next Step Executor Services

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