How Do I Organize an Estate Administration as Executor?

The Master Administration File: Five Records Every Executor Needs

Every well-run estate administration in Canada or the United States rests on one master file with five components: (1) an asset inventory listing every asset and debt at its date-of-death value with the document that proves it; (2) an estate ledger recording every dollar into and out of the estate bank account, with receipts; (3) a correspondence log noting every call and letter to banks, government agencies, and beneficiaries with dates and reference numbers; (4) a tax file holding the deceased's final return, estate returns, and agency correspondence; and (5) a beneficiary communications file preserving every status update sent.

This structure is not bureaucratic overkill — it is legal self-defense. In Canada, any beneficiary can compel a formal 'passing of accounts' where a court reviews the executor's records line by line; in the US, probate courts in many states require a formal inventory and accounting before the estate closes. Executors who kept contemporaneous records sail through; executors reconstructing eighteen months of transactions from memory pay lawyers to do it and often lose part of their compensation claim. Contemporaneous time records also matter: executor compensation (commonly benchmarked around 2.5% of receipts and disbursements in Ontario, or set by statutory fee schedules in states like California and New York) is far easier to justify with a time log.

Notifications and the Estate Bank Account

Notification is a first-90-days job with a distinct checklist per institution type. Financial institutions: send the death certificate, request written date-of-death balances (needed for the inventory and probate fees), and freeze automatic payments. Government: in Canada, notify Service Canada (CPP/OAS stop, and a CPP death benefit of up to $2,500 may be claimable) and the CRA; in the US, notify the Social Security Administration — benefits paid for the month of death or later must be returned — and the IRS. Land registry: confirm how title is held; jointly held property may pass by survivorship outside the estate. Utilities, insurers, and subscriptions: redirect or cancel, and critically, tell the home insurer if a property is now vacant — standard policies restrict or void coverage after roughly 30 days of vacancy.

The estate bank account is the administration's financial spine. It is opened in the name of 'The Estate of [the deceased]' — banks typically require the death certificate, the will, and the probate grant (US banks also require the estate's EIN from the IRS). Every estate receipt is deposited there and every estate expense paid from it; nothing runs through the executor's personal account. Commingling funds is the most common rookie executor error and the fastest route to personal liability, beneficiary suspicion, and a forced passing of accounts.

Distribution Done Right: Clearances, Accounts, and Releases

Distribution is where executors get personally burned, because an executor who distributes before liabilities are settled can be personally liable for the shortfall. In Canada, the key protection is the CRA clearance certificate: distributing without one leaves the executor personally liable for the deceased's unpaid taxes up to the value distributed. In the US, the federal claims priority statute (31 U.S.C. § 3713) makes a personal representative who pays other claims before federal taxes personally liable, and each state imposes creditor-claim notice periods — often three to six months after published notice — before distribution is safe.

The safe closing sequence is: quantify and pay debts and taxes, prepare final accounts showing every transaction from death to distribution, present the accounts to beneficiaries, and obtain a signed release and indemnity from each beneficiary before the final cheques go out. If any beneficiary refuses to sign, the executor's remedy is a formal passing of accounts (court accounting), where a judge approves the administration and compensation. Interim distributions are workable mid-administration, but only with a documented holdback sized to cover taxes and contingencies. A straightforward estate typically closes within the informal 'executor's year' to eighteen months; real estate sales, business interests, foreign assets, or disputes extend that considerably.

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