Manage Distributions

Distribution Asset

In the top right of the Distribution dialog you will see an Asset dropdown which you can use to select the asset you want to distribute. In the example diagram above, the "Diamond Necklace" is being distributed (and the selection is grayed out and unchangeable since in this example we started the process by clicking that asset's Distributed cell).

Date

By default, EstateExec will fill in the distribution date with today's date. You can change the date as desired, and you can also choose to clear the date, leaving it blank to indicate that this is a future plan that has not yet occurred (it can be very helpful to establish such planned distributions before actually distributing anything, so you can ensure that the overall outcome will be as desired). Once you set a distribution's date, the item is considered to have been physically delivered to the heir; until then, it is only allocated (e.g., assigned) to that heir.

Reason

The reason for the particular distribution may have tax and other distribution implications:

• Beneficiary - A distribution controlled outside the will (such as an RRSP beneficiary)
• Bequest - A distribution specified by the will
• Residuary - A distribution of the residuary estate that you decided
• Heir Request - A distribution of the residuary estate that you decided, trying to honour a request by an heir

Note that if you are filtering the Distributions table, you can select "Discretionary" and the table will include both standard allocations and heir requests, since both are in the same legal category, under the executor's discretionary control.

Heir

The available list of heirs comes from your entries on the Heirs tab (EstateExec uses the term "heir" to mean anyone who will inherit from the estate). If an asset will be split among multiple heirs, create one distribution per person, setting the Distribution Type for each distribution to either Asset Percentage or Fixed $ Amount (Asset Percentage is usually best, so that if the asset fluctuates in value, you won't have to keep editing the distributions to tweak them).

If you select the decedent's spouse (as specified on the Heirs tab), an additional checkbox will appear so you can defer any deemed proceeds that would have otherwise been associated with the portion of the asset handled by this distribution. By default, this box is checked, and once you save the transaction, EstateExec will automatically adjust the asset's deemed proceeds, ACB, and other dependencies.

If the asset is a Retirement Account (e.g., RRSP), you will instead be shown a checkbox allowing you to indicate that this distribution should be considered a spousal rollover, and thus the ACB at Death should be set to $0 rather than automatically stepped-up to market value (note that if you do this, you will need to notify the CRA of the rollover so it can adjust the decedent's T4 slip).

If you have already adjusted an asset's ACB at Death via the Assets table or the Edit | Asset Cost Base menu, you will be shown a second checkbox which you can use to tell EstateExec not to further adjust the asset's ACB at Death due to this distribution.

Distribution Type

You can define the type of distribution in one of 3 ways:

• Asset Percentage: You wish to give an heir a defined percentage of an asset (e.g., 50% of the house).
• Entire Asset: You want to give 100% of an asset to a given heir (e.g., a diamond necklace).
• Fixed $ Amount: You want to give an heir a specific dollar amount (e.g., a $5,000.00 bequest).

If the will specifies a certain percentage, it's best to express the distribution that way. When specifying a distribution by percent, you can override the calculated value if you need to tweak it. For example, if the will divides things equally among 3 heirs, you can specify in each distribution that the heir gets 33.333%, and override the Value field in each distribution as necessary so that they are all exactly equal and the asset has no remaining value. If you like, you can set one of the heirs to get 33.334%, so the combined amount is exactly 100%, and simply ensure that the values of each distribution are set to the proper identical amount.

Note: By its nature, a percentage distribution is proportional to the corresponding asset's value. If you define a percentage distribution, and then later adjust the Value Now of the asset, the distribution will adjust to reflect the specified percentage of the new value. Once you assign a date to a distribution, though, its value becomes fixed, and any subsequent changes to the asset's Value Now will not affect the distribution (which you presumably already made in the real world). Because of the dynamic nature of future percentage distributions, you cannot override the value of such a distribution until you assign a date, signalling that you have actually made the distribution.

Some other notes about partial distributions:

• To see all distributions associated with an asset, either filter the Asset column in the Assets table, or click on the asset's Distributed cell in the Assets table.
• An asset's "Distributed" cell in the Assets table will be shown in gray if any of its distributions are not yet done, and the asset's "Value Now" will reflect the remaining undistributed amount. Only the amount actually distributed will be included in the "Distributed" column sum at the bottom of the table.
• A subtle but important point is that if the asset's value and/or cost base fluctuates during the time between one partial distribution and another, the same percentage of the asset may end up being recorded as different distribution values. This is correct, but can cause complications in the real world, so it's best to distribute all portions of an asset simultaneously. Once you set a distribution's date, changes to its asset's remaining Value Now or Adjusted Cost Base will only affect remaining partial distributions that have not yet been made.
• If you define fixed $ amount distributions and percentage distributions from the same asset, and haven't yet assigned dates to those distributions, EstateExec will assume you intend to distribute all the fixed $ amount distributions before distributing the defined percentages of whatever is left over.