Protect Your Clients’ Estates: The Importance of Public Notices

The responsibilities of estate executors are complex, and the role is often stressful and time-consuming. Executors are tasked with identifying and collecting the assets of the deceased’s estate, safeguarding and investing those assets pending distribution to beneficiaries, overseeing the payment of debts and liabilities owed by the estate, filing tax returns for the deceased and the estate, and ultimately distributing assets to beneficiaries in accordance with the provisions of the will.

Issuing timely public notices and notifications is a vital aspect of executors' role, and any missteps or negligence could land them in hot water. Let’s explore some of the required public notifications involved in the estate administration process.

General Notifications

There are a number of people and organizations that should be notified about someone’s death. Some of these notifications are time-sensitive; for example, you typically have 30 days after someone’s passing to inform the court and present a will.

Some notifications may be made informally, while others require specific contact methods, ranging from phone calls to notarized letters and public notifications.

While not a complete list, here’s a good starting point for some of the notifications you may need to make over time:

• Banks and brokerage accounts.
• Businesses/partnerships.
• Close friends and family.
• Credit card companies.
• Credit reporting agencies.
• Creditors.
• Employer.
• Heirs.
• Insurance companies.
• Landlord.
• Lawyer.
• Local service providers.
• Medical providers.
• Membership organizations.
• Newspaper and other subscriptions.
• Post office.
• Probate court.
• Provincial driver's license authority (Canada only).
• Trustees.
• Utility companies.

Probate Notices

Probate is the court-supervised process of administering and settling the estate of a deceased person. Probate involves the following actions:

• Validating a deceased person’s will, if one exists.
• Appointing someone to administer the deceased's estate or deal with their assets and debts.

Once the court determines the deceased’s will is valid, it allows the executor to execute the will and administer the estate. (Should the deceased die without making a will, their next-of-kin or another individual can apply to the court to assume this role.)

It is often impossible to wrap up an estate until the court issues a document stating who will be in charge of the estate administration process.

Most estates are required to go through probate unless they only contain assets under joint ownership, meaning they automatically add or pass through the right of survivorship.

Some executors elect to go through probate even if it’s not required. That’s because applying for probate reduces their potential liability and the chance of claims being brought against the estate or themselves in their personal capacity.

When is Probate Required?

Probate will likely be required if:

• A property exists in the deceased’s name alone.
• A bank or another third party requested it to release the funds.
• The estate has beneficiaries who are minors.
• The deceased owned stocks, bonds, or shares in a public company.
• “The estate” was a named beneficiary in an insurance policy.
• A lawsuit relating to the estate exists.

When is Probate Not Required?

As we mentioned, probate is not always required to settle an estate in Canada. For example, in cases where:

• There’s no property in the estate.
• The deceased held property or accounts jointly (in these cases, these assets will transfer directly to the surviving owner(s)).
• No access to financial institutions such as banks or investments is required.
• The estate has a small value.

Creditors Notices

When somebody dies, their estate assets cannot be distributed to their beneficiaries until any outstanding debts the deceased had are settled. Whatever remains after creditors have been paid can then be inherited by the deceased’s beneficiaries (spouse, children, etc.)

It’s the job of the estate trustee to notify any creditors about the deceased’s passing and identify and pay these outstanding debts.

A creditors notice is essentially a public announcement made by executors or estate administrators to notify the deceased’s creditors that their estate is being settled.

What Debts are Relevant for Notice to Creditors?

Some debts are relatively easy to identify, especially if a secured creditor like a mortgage lender is involved. However, other debts may exist that executors have no way of identifying. These debts may take the form of old, unpaid utility or credit card bills, outstanding municipal taxes, or personal loans. If the deceased lived or worked in multiple cities or performed business activities online, the likelihood of them having outstanding debts increases.

Of course, despite their best efforts, it may be impossible for executors to track down and uncover every possible debt the deceased may have had. That’s why the law requires trustees to advertise for creditors.

How Does a Notice to Creditors Work?

Here’s how notices to creditors work:

• The executor publishes a public advertisement—the notice to creditors—to inform them of the estate’s probate status.
• The notice must include the deceased’s name, a deadline (typically 30-120 days) for submitting claims, and the contact information for the executor.
• Once this time period has passed, the estate will be distributed with regard only to claims that have been filed.

Why Don’t Some Executors Publish Notices to Creditors?

In some cases, executors fail to publish notices to creditors because they feel sufficiently confident that the deceased didn’t have any outstanding debts of which they’re unaware. This is a risky move.

A notice to creditors should be published for every estate, no matter the size. Here’s why:

• Legal requirement: Estate trustees are legally required to advertise for creditors by publishing a notice online.
• Limits estate liabilities: Publishing a notice removes the ability of creditors of an estate to come forward after the notice period.
• Reduces executor liabilities: Many estate trustees (both executors and administrators) don’t advertise for creditors. This is unwise, as trustees who don’t publish a notice to creditors put themselves at risk of personal liability to creditors.

Some executors skip this step because advertising for creditors used to be prohibitively expensive. In days gone by, these notices were typically published in print newspapers. Just imagine the cost of having to publish the same notice in multiple cities around the country!

However, all that’s changed with the rise of the digital era and services for publishing notices to creditors online. Today, the cost of advertising for creditors is minimal.

Publishing notices to creditors online is quick and easy with Estateably:

• Select the jurisdiction where the notice will be published
• This will select the appropriate template for your notice
• Fill in the relevant information
• Checkout

What’s more, our partnership with MetCredit ensures that creditors' claims are appropriately verified and addressed.

Streamline Estate Administration with Estateably

Estateably is a cloud-based platform that enables professionals to streamline their estate and trust administration practices. Professionals save time through the automation of probate forms and precedent letters, and the ability to manage inventory and contacts with easy-to-use accounting and one-click reports.

Learn more about how to publish public notices with Estateably or book a demo to get a closer look at our platform.