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Wednesday, March 17, 2010

Executor liability


Most people who act as an executor on an estate do so only once in a lifetime. This means that there are an awful lot of rookie executors out there doing their best to figure out what they are supposed to be doing. It's not easy.

An executor is personally liable for any losses he or she causes the estate. That means that if the executor is negligent or very slow-moving or reckless with any of the assets of the estate and that causes a loss in monetary value, the executor is personally on the hook for repaying the loss. The loss could be penalties and interest on a tax return that the executor filed extremely late for no good reason. It could be the purchase of a house where the executor sold the estate's house for much less than market value because he or she didn't bother getting estimates. It could be covering expenses such as meals or travel that should not be covered as they are not legitimate estate expenses.

This rule can be tough to translate into actual practice, because most people understand that an executor's expenses and legal fees are covered by the estate. This is often taken by inexperienced executors to mean they can charge every meal, every kilometre they drive, every item they purchase, to the estate, and that no matter what they do, they are backed by estate money. However, the estate will pay the reasonable costs and expenses of a proper administration. The estate will not pay for the executor's mistakes that could have been avoided with a little bit of attention. The estate won't pay for the executor's trip to Hawaii.

There is a line that can be crossed by an executor. There comes a point where the executor's behaviour is so unreasonable that it amounts to fraud or neglect. The courts deal with estates like this on a case-by-case basis.

If the executor has simply neglected to take care of things and monetary value has been lost, the executor could repay the loss by reducing or completely eliminating the pay he would otherwise have received for being the executor. If it goes beyond that, and the executor has behaved in an egregious way, foregoing the fee might not be enough. The executor could be held liable in court for losses that must be paid out of his own money.

If you are a beneficiary and you really believe that the executor on an estate you're involved in is causing losses to the estate, make an appointment to see an experienced estate planning lawyer. Take all the paperwork relating to the estate with you. Get an opinion on what, if anything, should be done about the executor.

If you are an executor and you are worried about your own liability, remember that if you are honest, let everyone know what you're doing, and move things along as quickly as is reasonably possible, you are not likely to run into trouble. You can also avoid losses and mistakes by relying on experienced professional help, such as accountants, lawyers, realtors and appraisers. That way you can back up your actions with documented proof of why you took the steps you took.

Most estates are wrapped up within a year (not including receipt of the final tax clearance certificate from Canada Revenue Agency), so this should be your goal. It might take longer if the estate involves selling a business, dealing with real estate in other countries, asking the court for clarification of things in the Will, etc.

63 comments:

  1. Suspicious and not liking itOctober 23, 2011 at 3:52 PM

    I posted but can't find it, so I'll do it again. I'm a beneficiary who was told by the Executrix that her lawyer(same lawyer as the Testator)was applying for a Grant of Probate. Alberta law states the beneficiaries MUST be notified BEFORE application is filed with Surrogate Court. Questioning this upset her and she indicated she'd been waiting for all the documents to come in before notifying the beneficiaries. She will not divulge the name of their lawyer. I feel under-informed and distrustful now. I am, according to the Testator, not 'getting very much', so my concern isn't with the what or really the when. I can wait. My concern is the secrecy. Should I be arming myself? I hate being suspicious. Or should I merely wait until that lawyer contacts me and take it that she is one of those Executrix' who feels it's no one's business but hers?

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    1. How long has it been since the death of the testator? It can take several months for the estate to be valued and that is necessary before an application for probate is made. It is concerning that your executrix is not even saying who the lawyer is - that is an unnecessary obstructionist stance. How do you know you're in the will at all? Have you seen the will? If it takes more than 3 months for any information to come to you I'd get myself down to the court office to see if an application has been filed - it is public record - so if one has been made the name of the lawyer and all relevant information on the estate will be avialable. Good Luck

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  3. Prior to beneficiaries signing a "Release" should they recieve/see all original receipts for disbursements, bank accounts, life insurance policies. Is the "Executor" supposed to provide these as well? Or is a spreadsheet of such information sufficient?

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    1. The spreadsheet is the starting point. If there appear to be entries that are out of line with reality then you can request copies of vouchers to back up the expenses displayed on the spreadsheet.

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    2. I agree with the person who replied above. It's not possible for an executor to provide original receipts to everyone, as there is only one original. Copying everything for all beneficiaries is usually unnecessary and just adds to expenses. The person who answered above stated it perfectly - if there is something that doesn't seem right, you are entitled to ask for a copy of the voucher or receipt.

      Lynne

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  4. I am an executor of my brother's will. He signed over his inexpensive car to his son and gave his children money before he died. He died broke and no assets. We have contacted his creditors and they claim I am personally liable as the executor for his debt and are threatening to sue me. Can they do this? Am I liable for any debt my brother incurred?

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    1. No, you are not liable for your brother's debts. His estate, to the extent that it will go, is to be used to pay the debts. After that, the creditors are out of luck. I've seen a lot of creditors, particularly credit cards, tell widows and executors they must pay the debts, but you don't have to.

      Lynne

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  5. Lynne, I forgot to tell you why the beneficiary had to file with the court to get the will because the lawyer informed the beneficiary that his mother had passed away and he was originally the executor and beneficiary of the estate before she was deem incapacitated. The lawyer was the one that wrote up the new will for his mother and this lawyer told him who the new executor was. This is when he made contact with the new executor and the executor refused to give the beneficiary a copy of the will, because he claim he did not have to due to he is the power of attorney and that did not end when she died. So off to court the beneficiary went. This is part of my previous questions I sent you to clarify this area for you.

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    1. Michelle, and hopefully Lynne can comment. Power of Attorney applies to a living person. Once the person dies, power of attorney is done.

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    2. I agree totally with the previous poster that the POA ends as soon as the donor of it dies. I don't know how that got all the way to court. You'd think the lawyers would have straightened the POA person out long before then.

      Lynne

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  6. is it necessary for the executor of a will to disclose all the assets of an estate to the beneficiaries prior to administering the will?

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    1. No, there is no rule that says you have to disclose prior to taking steps. In most provinces, the executor is required to give notice of the application for probate at the time the probate is filed (which is, obviously, before you administer the will). The purpose of that notice is to let a beneficiary know what he or she is going to inherit, so this must include a list of assets for residuary beneficiaries. Having said all that, I wonder why you wouldn't tell beneficiaries what the assets are, either before or after you get started on the administration. If there is no good reason to hide the information, why hide it?

      Lynne

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  7. My mother died within a month of being diagnosed of cancer and while she was in the hospital her lawyer friend prepared a Will and appointed my sister as executer althought my mother had no assets or money but later was found out that she owned the thousands for dollars of income tax. My mother had life insurance that my sister was the beneficary for. My sister finally did my mother's taxes and found the exact amount that is owing to the government and the government is telling my sister she is personally responsible for paying this back. My question is can the CRA do after my sister for the money even though my mother didn't have anything? Will they see that she recieved life insurance therefore she some money to pay it or does that not count as being part of the estate? What does she need to do in order to get the government to stop asking her to pay the taxes as the estate is insolvent. Thanks.

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    1. Under Canadian Life Insurance Laws, your sister receives the life insurance benefit tax-free and is not liable to cover expenses with the money. It is hers to keep. The Government can make a claim to your mother's estate but will back away when they find that it is insolvent.

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    2. The above comment is correct; the life insurance is not part of the estate. Since the question is how to make the government stop asking for payment, the executor needs to send them some paperwork. Since your mother had no assets, the will would not have gone through probate, so there is no court-filed inventory to give them. She could, however, create a list of assets and debts, signed in her capacity as executor, to explain the situation.

      Lynne

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  8. My father in law just passed away last week. My wife has been named as executor in his will but I'm not sure she is able to deal with her father's estate. He was in debt way over his head and his estate is about negative -$48,000 from what we can calculate so far. He primary residence has 2 mortages totalling $198,000 but the house is way out in the country and may sell for about $175-$200K in a poor rural market. He owed about $35,000 (unsecured) to over eight credit card and credit lines while just making minimum payments. He died suddenly without being able to clean up his financial lifestyle. He had about $300 in his bank account when he died. No life insurance.

    Should my wife decline to be executor and walk away. If she does take on the job and can't handle it, can she back away without personal liability or costs? I think that this will costs us lots of time and our own money to cover expenses.

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    1. Your wife should not take on the job unless she realizes that she cannot legally back away. Once she begins acting as executor, she cannot quit until either the entire estate is wound up, or the court gives her permission to quit.

      Taking on the role of executor doesn't expose her to costs. She is not exposed to personal liability unless she makes mistakes or does something fraudulent. She is not liable personally for unpaid estate debts.

      The credit card companies are going to get nothing from this estate and they aren't going to be happy about it. In my experience, they will tell the executor that she must pay the account from her own money. This is not true; she does not have to pay anything out of her own pocket. They keep doing this because people keep believing them and paying them.

      Someone has to deal with this estate, and since your wife has been named, she should think about who would take care of it if she does not. Yes, it will be time-consuming, but it's something that people do for others in their families.

      Lynne

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  9. As co-executor who has a copy of the will and nothing else, can I be held legally and financially responsible for costs if a co-executor (who has power of attorney and all other financial and legal documents) runs up debt and runs off with the money from the estate? I don't trust either the co-executor or the author of the will.

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    1. The personal liability of an executor is so complex that I just wrote a book about it. I included a chapter devoted just to co-executor liability. Perhaps you should pick up a copy of it (you can buy it on this blog by clicking on the image on the left hand side).

      In case you don't want to read it, I can give a bit of information here that might help. As I see it, you have two options. One is to get out of it entirely, and the other is to learn to get along with the other person.

      Option 1: Given that you have so little faith in the co-executor and the testator, perhaps you should consider renouncing your role as executor completely and letting the other person deal with it. This is available only at the beginning of the estate, before you do any executor's work.

      Option 2: As a general rule, one co-executor is not responsible for the actions of the other co-executor. so if he wastes or steals estate assets, you are not responsible for that. HOWEVER... and this is a big however... if you are a co-executor and just sit back and let the other executor do whatever he wants and you make no effort to intervene, you may well be liable because of your passivity. So you have to be all in, or all out.

      Lynne

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  10. Hi my father removed his "roommate" from his will over 7 years ago. Has been filing his taxes as single and so had she. Now "she" is trying to claim common law. They lived in separate bedrooms, all bills including the house are in his name. There was no love lost nor ever mentioned in their "special relationship", in fact she was neglectful and did not call an ambulance when he needed one and then did not contact me, his next of kin for over 36 hours about his death, it was her niece who finally reached out and called me at work. . Any advice on disputing her claim?

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  11. Hi Lynne,
    A disgruntled beneficiary here, in BC.
    How do I initiate a court action to bring an executor to court to show a written statement of house sale, and her reasons for dividing up residual cash from estate from house sale?
    I am one of four beneficiaries in BC, will was probated etc, executor has told me to accept what she thinks is fair to beneficiaries. she figures 10 grand to me and 30 grand each to 3 beneficiaires.
    will states that house to be divided by four beneficiaries. In my view, the house, when it sold, the residual should be divided equally, at moment executor thinks I should recieve 10'000 of 100'000 of house sale cash.
    I not signing a release an want to have a judge decide on how distribution should be divided among four beneficiaires.
    I cant afford a legal lawyer, legal aid only involves itself for crimnal matters?,
    I am stumbling thru legal system, and just want a judge to ask, executor her reasons for not disclosing statement of accounts to me, and how she came up with dividing house/estate sale cash between beneficiaries.

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  12. A relative is an executor of a very small estate. Another relative in the will is causing more lawyer's fees. If there is no money left in the estate after all this, is the executor personally responsible for any further fees and disbursements? Should the lawyer stop working on it once the estate is depleted?

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  13. My father was the only child and executor of his mother's will when she passed away. Her husband passed several years before that. Before my Grandfather died, he mentioned that the grandkids would get a bit of money but that when my Grandma died, we would get the larger portion of our inheiritance, and he made it sound like quite a tidy sum. Grandma lived quite a few years longer than him and by the time she passed away, I had forgotten that he had told me this. My father was very secretive about the will and never mentioned that we were left anything at all which seemed very odd but we were raised to be polite and not to ask questions. Well more than a decade has passed and my siblings and I have come to the conclusion that our father ignored the wishes of my grandparents and decided not disperse the money we were to receive on my Grandmother's death. Knowing my Grandparents, there was no way they would not leave something substantial to their grandkids. We were just too young to question it at the time. We have never seen the will. It would not be an option to ask our father to see it;he's a very secretive man. More than anything we are all curious as to what he's keeping from us. Is there a way to see the will without starting a fuss. If there are monies that were held back, is it too late to do anything about? Where to even start.

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    1. As Lynne hasn't answered, if you remember where they lived, I would start with LAND TITLES, who may have copies of wills from whenever housing titles changed, or at least the names of the legal representatives.

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    2. I would start at LAND TITLES if you remember where your relatives lived. They would have records of the legal representatives involved when the home tranfered. And they might have copies of the will.

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    3. did you ever figure this out? if not, try the local probate office as it would have had to be filed if there was significant monies in her estate. then you can get a copy of the will.

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  14. A very elderly uncle who was a bit "eccentric" died with property and bank accounts but with about $250K in cash in the house. The executor does not want to include this in the estate, fearing that the government will somehow think it was cash income made "under the table", but he simply cashed his cheques and hid the money.

    A few of the beneficiaries do NOT want this. They want to be paid by cheque and with a receipt, knowing that if they deposit $50K in the bank, it will raise flags. We see no reason not to include it in the estate, as there is no estate tax, even though the notary's fee may be higher.

    Is there any way to compel the executor (who otherwise is doing a good job, albeit at a snail's pace) to include it in the estate? If it is not included, what would the penalty to the executor be, and even worse, would the beneficiaries also be criminally liable if they were aware of it?

    I thank you for your help.

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    1. The executor is obligated to include the money in the estate and to include it in the inventory that is filed with the court.

      Generally speaking, penalties to the executor are not criminal, but are within the civil law. Now if the money was kept by the executor and not given to the beneficiaries, that's criminal, but in this case he does not seem to be suggesting anything like that.

      The usual penalties to an executor for making major mistakes on an estate include such things as being removed as executor or being ordered by a judge to lose the executor's pay he otherwise would have received. He can also be sued by a beneficiary if his actions lead to legal problems or increased taxes, etc.

      Lynne

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  15. I'd have entered this under ~"Top 5 mistakes executor's make" but there was no room. As executor of my mother's estate, I responded to an offer for an e-savings account with 'bonus interest' and opened up this account at my "mother's" bank solely for the purpose of accruing interest on the estate funds while they waited for probate to finish and getting the final clearance letter from Revenue Canada. As the survivor of my mother's bank accounts I held jointly with her for administrative purposes, the offer was made to me personaly and not available to the estate (bank account). The problem is (of course?) that now I've received a 2015 T5 in my name/SIN for the interest gained on the savings acccount. Just to be clear, all the cash assets are willed and will be distributed to all Mom's 'issue'imp (including me) equally. I believe I have some idea how Revenue Canada operates and if I don't include the T5 income above in my 2015 return, I will automatically get a reassessment including the T5 interest income. I've talked to an apparently knowledgeable person in the 'estate' category at Revenue Canada (I find it's always best to talk to these people, they are generally more knowledgeable then the 'first responders' and if you just mention 'estate' you'll be referred to them), who as I thought said it was all done electronically and there was no way to get in front of this and if (or when?) my 2015 return was reassessed to include the 'estate' T5 income, I would respond then (probably needing to show I had by then claimed the interest on the estate T3 return) and he believed the whole thing would be resolved very quickly. I guess my question is do you agree this is the best/only way to deal with this (rather than writing a letter now to Revenue Canada, or trying to get a revised T5 from the bank)?

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  16. The deceased died 3.5 years ago leaving a sizable will which still isn't settled and may not be for months or years yet, because the executor is now being asked to put the will in chronological order by a beneficiary who is requesting that, claiming that hide nor hair can be made from the 100 or so page estate left behind, which seems to balance but is difficult to verify because there is no main base file.
    Can the beneficiaries claim legal costs incurred to ensure that the will would be filed in chronological order? It appears very poor documentation was done and since none of the beneficiaries were ever allowed to see the way the accounting was being done despite requests, the carelessness could not have been detected earlier. The executor had been extremely secretive throughout.

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  17. The executor claimed that it was only discovered in 2015 that the accountant had not ensured that Revenue Canada had received the papers, nor had the executor done anything to ensure it. That means that back taxes will be owned when finally the will is settled, and all beneficiaries will be asked to pay those back taxes. Is it not the obligation of the executor to pay them since he did not check to ensure that they were sent in? Is it not his duty to claim negligence from the accountant? Or will the beneficiaries really supposed to be responsible for what will be high back taxes whenever the 3.5 year old will is settled? The executor states it will be the responsibility of each beneficiary after they receive their portion of the will.

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    1. I assume that in this case, the estate had already been paid to the beneficiaries, and that's why you're saying the beneficiaries have to pay it, rather than the estate has to pay it. I don't see this as being the responsibility of the estate or the beneficiaries. The executor and/or the accountant were responsible for the paperwork and it appears that an error was made by one or both of them. Depending on the amount of taxes, the executor might make a fight of it, so these things are never as easy in real life as they seem in a blog post.

      Lynne

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  18. We were required to settle part of a will through mediation a year ago based on a percentage of that will. However, we were never allowed to see the actual books and had to trust that the figure the executor gave us on paper was the real figure in the will and we believed it was pretty well complete.

    An entire year after the mediation, in which the complaining beneficiary was awarded a percentage of the will, the executor finally decided to finish off the will and send the beneficiaries a copy.

    The 100 page copy was so sloppy and disorganized, however, that this will may continue for months or years.

    Was such a mediation case legal? I mean how can you be forced to mediate on a percentage of a will when you have no idea what amount that percentage is based upon and when it is nowhere near completion? The will is now again being contested by one of the beneficiaries so of course that could mean that the settled upon amount for the first beneficiary could be a very much higher percentage than was allotted and already paid out with deal closed.

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    1. As a general rule, a mediation is not binding unless all of the participants signed an agreement to that effect. If you signed anything after the mediation session, go back and check the fine print. It does happen that mediated settlements get re-opened when fresh information comes to light.

      Lynne

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  19. Hello. My friend has inherited 25% of his mother's house in her will. His two brothers each also inherited 25% and some nieces and nephews the rest. One brother is the executor. He wants to sell the house to his daughter at what appears to be under market value with no appraisal. My friend has offered to buy it for $50,000 more than this price. Is there any way to stop the sale or can he only go after the executor later when the accounts are done? He is in BC.

    Thanks!

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    1. Your friend can intervene through the courts to stop the sale. The basis for the case would be that the executor is not maximizing the estate and that he is putting other interests ahead of that of the estate.

      Lynne

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  20. Thank you for your site. My partner was appointed executor for a relative's handwritten will. He is very nervous because my partner is a professional and is very nervous the beneficiaries will take issue with estate decisions, and hold him personally liable, and thus hurt his professional designation. He has been extremely careful in all of his estate duties so far, and in fact contracted a lawyer to act on behalf of the Estate and guide him. I appreciate his worry, however, because we understand professionals like accountants are held to a much higher standard. How worried do people, who are lawyers or accountants by training, have to really be when they are appointed executor? He's very stressed out. Is it better to just excuse himself of the duties?

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    1. I understand his concerns, and I agree that the beneficiaries will certainly expect him to be more or less perfect in his administration of the estate. If something went wrong, I would expect the courts to understand that he is not an experienced executor.

      Renouncing (i.e. turning down) the job is an option. I know that the lawyer, accountant or banker in the family usually gets named to be the executor of everyone's will, but perhaps there is someone else who could do the job.

      Another option is for your partner to take on the job of executor but hire a trust company to complete the administration of the estate. He'd still have ultimate control but would have someone with experience carrying out the tasks. This is especially great for the investing and money management since that is in-house expertise for trust companies. Some lawyers, like me, also take on estate administration for an executor (in my office we call it "executor rescue" because it's usually needed when an executor is about to be overwhelmed by an estate).

      Most executors will hire a lawyer to help, but most of the time the lawyer's job is to provide legal advice, take the will through probate, and provide releases. All of the rest is up to the executor unless he wants to pay the lawyer by the hour to do that work, which is pretty darn expensive. A trust company will charge a percentage so the fee is more certain. I find that to be the best arrangement so that's what I do in my office too, but I don't think you'll find many lawyers who do things that way.

      Lynne

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  21. Anonymous said...
    An elderly friend of mine has asked me to be executor of her estate and Power of Attorney. I have only known her for 2 years and do not know her family at all. I know she has one daughter who she doesn't get along with. I don't believe she has a large estate as she doesn't own the home she is living in but resides in a senior's complex. Because I know very little about her I am nervous about taking this on. I am a senior myself and do not want to take on anything that may cost me financially as I only have my pension. I really would like to help my friend as she is not doing well but not too sure what all this would involve. I guess my question is 'Would it be a good idea to act as executor and POW for someone I know very little about but would like to help?

    November 7, 2016 at 2:34 PM

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  22. My uncle passed away three years ago. My cousin served as executor. My uncle's will contained special provisions for my mentally handicapped sister: her share was to be kept in trust and not vest, be doled out in amounts that would not jeopardize her eligibility for government assistance, and the will contained a provision that should my sister die before her trust was exhausted, the remaining funds would fall back into the estate and be distributed to the other beneficiaries. All the other beneficiaries have received their shares of the estate, and the executor has taken her share and paid her lawyer, but the trust has not been set up. In fact, she wants me to take the money and set up the trust, and she has suggested that if my sister dies, I should just keep the money. I think that would be both illegal and risky because, as I understand it, both the beneficiaries and their heirs would have a legitimate claim; one that might lie dormant for many year and then materialize at a time when, through the miracle of compound interest, the amounts in question might not be so small. So long as there is a provision that the money must return and be distributed to the remaining beneficiaries should my sister die, I am not prepared to do so. If the executor can get the other beneficiaries to waive their claim, then I would be prepared to have the executor's lawyer establish a trust that I would administer. If the executor either declines to ask other to waive their claim or asks only to find that one or more are unwilling to do so, then I assume that it is the executor's responsibility to establish the trust. I would be prepared to administer it in conformance with the provisions of the will, but my cousin needs to remain as executor to take care of the re-distribution in the event that my sister dies. The amount in question is just over $26,000, which means it should be exhausted in about six years. My cousin doesn't want to be bothered administering the trust. She could retain someone to administer the trust at a cost to the estate, or I could do it at no cost to the estate ... and I have offered that. Unfortunately, my cousin now claims she is unwilling to act any longer as executor. Am I correct in assuming that, having taken payment for her role as executor, it is up to her to carry her duties to completion? And if she nonetheless abandons her role with duties still unfulfilled, what happens then?

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    1. She's not entitled to just quit and walk away. She is still the executor, like it or not, until the court releases her. If she applies to the court to be released, she will have to pass her accounts and the court is hardly likely to give her the OK to quit when she hasn't set up the trust. If she simply leaves it and doesn't set up the trust, eventually someone - whether it's you, another beneficiary, or the person who acts on behalf of the disabled beneficiary - can take her to court. The outcome of the lawsuit could be that she is forced to repay the executor fee, that she is forced to pass accounts, etc. She'll end up paying legal costs for herself and for the people who must resort to the courts to make her finish the job she took on. And depending on what happens with the money, she may end up being charged with stealing it, since she isn't handing it over to the beneficiary to whom it was bequeathed.

      Lynne

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    2. Our secretive, headstrong uncle, 90 years old and full of guile and craft as well as piss and vinegar (if you'll excuse the expression), has persuaded himself that he has been placed in omnipotent and sole control of the estate of our late father as per the terms of the Will (which does not allow this) and that can do as he pleases with it without the consent or even knowledge of the three heirs (a procedure nowhere permitted by the Will). As such, he has for the past 15 years been dipping into the till for payment of a large salary to his his wife (for nil work done), substantial donations to charities of his choice, and a series of byzantine property investments, to sort out which, when the time comes, will be the devil's own work for the heirs. In effect, it has become clear, he has been using the estate holdings and our future inheritance as a personal chequing account.

      About all this, I'm afraid, we have become aware only recently: when challenged, we are told, repeatedly, that he and our late father "had a verbal agreement" authorizing it: end of story. For such an agreement not a shred of proof or evidence, written or otherwise, exists.

      He has also made it clear that he is committed to doing everything in his power to prevent the three heirs from entering into their rightful inheritance as the stated beneficiaries of the Estate. They are, he has declared, not to be trusted with money matters. The grandchildren,he has decided, are to be its beneficiaries when they become adults...

      Are my brother, sister and I, professionals now in our sixties [!], justified in concluding that this man has (a) exceeded his brief of stewardship of the Estate and misconceived the terms of the Will (which give him no permission to act as he has), and (b) acted to the detriment of the three heirs and legatees? Are we right that these unilateral, unauthorized disbursements amount to theft, for which restitution can properly be claimed?

      If so, what to do? Is legal action the best or indeed only option?

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  23. I am interested to know if an accountant/executor is hired to do an estate and this person misfiles taxes or any portion of the estate, can the accountant/executor be held liable for the taxes and money owed to the government on the estate. All inheritance is gone because a accountant/executor handled the estate and now the people have lost it all and have to pay it all back to the government. Is there a way to recover any of the money due to negligence on the executor actions.

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  24. i'd like to understand if all beneficiaries share the liability of the executor fees or do the executor fees come out of the final distribution for the beneficiaries who aren't executors.

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    1. The executor fees come out of the general estate, so they are shared by all residuary beneficiaries. If the executors are also beneficiaries, they too pay their share of the executor fees.

      Lynne

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  25. Can a lawyer fill out court forms for a fee, such as 74.14, 74.17 etc I need HELP

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    1. The forms you've mentioned are for applying to the court for a certificate of probate. When you call a law firm, don't ask whether they'll fill in forms for you because they'll probably say no. If you ask if they'll apply to get probate for you, they'll probably say yes. The difference is that they will want to decide which forms are appropriate for you based on your situation. No lawyer is going to accept a bundle of forms, fill them in and just hand them back without knowing whether they are the right forms and WHY they are the right forms. That will get a lawyer sued in no time.

      Lynne

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  26. I am the executor of my brothers estate of which the only money was from the sale of his home. I have had to have several years of back taxes prepared both for personal and business. I have paid the CRA the money owing for the taxes that I have had prepared, but now they say more is owing as there were back taxes and interest. It is no apparent that there will not be enough funds left to cover what is owed to the CRA. This means no money to pay for my services as executor. Can I be paid for my executor services prior to giving all the money to the CRA or am I just out of luck for all the hours of work that I have done trying to sort this mess out?

    ReplyDelete
  27. Hi, 

My mother recently passed away. In her will, I was named the sole executor. In the process of tying up all the loose ends. I sent Equifax and TransUnion pages from the will, which showed that I was appointed the executor and asked to put a death notice on my mothers account. In that process, I learned the estate is severely insolvent.

    I have also notified CRA and the Ontario government that she has passed, but I have not provided them any information about my 'role' as an executor. They informed me that I should let the bank know, in an effort to prevent the GST payment that is normally directly deposited into her account.

I went into one of her banks, where she owed a great deal of money through a unsecured credit card. In an effort to notify them, I provided them with a copy of the death certificate and asked that the account be frozen. Although the account was ONLY in her name, I was met with a great deal of questions, leading myself to believe I may soon regret going in. I ended up leaving in the midst of being interrogated, concerned for my own well being I left. However, they took a copy of the death certificate. I am also unsure if they froze the account.

    I have read a great deal of your posts and truly appreciate them. I have not filed for probate and thus have not been formally appointed the executor.

    My concern is that I have performed too many functions to renounce the duties of the executor This post mentions “You may only renounce if you do not fulfill any of the functions of an executor.” I am still a student, have limited funds, and have only recently realized the magnitude of this role. In addition to the estate being severely insolvent and the concerns that they will come after me, I am concerned that the creditors will force my mother’s estate into probate and force me to be the executor.

    ReplyDelete
  28. pt 2
    My concern is that I have performed too many functions to renounce the duties of the executor This post mentions “You may only renounce if you do not fulfill any of the functions of an executor.” I am still a student, have limited funds, and have only recently realized the magnitude of this role. In addition to the estate being severely insolvent and the concerns that they will come after me, I am concerned that the creditors will force my mother’s estate into probate and force me to be the executor.

    As of now, I have completed the following:
    -paid for funeral services (roughly $6000)
    -applied for death benefit ($2500 directly spent on funeral service, I needed to add $4500 of my own savings for the rest of the funeral service)
    -notified Equifax and TransUnion, providing parts of the will and copies of my ID to them
    -informed CRA and the provincial government of Ontario of my mothers passing (I did NOT provide them a copy of any part of the will and thus are not the executor in their eyes)
    -an attempt to notify one bank/creditor

    My concerns are:
    -Can the creditors force her estate into probate?
    -Have I done too much to renounce the role of an executor, assuming this is even necessary (should I even be renouncing the role?) Or do you suggest simply doing nothing
    -CRA mentioned that if I am unable to freeze the account, that I will need to return the funds to them. However, I am concerned that further puts me at risk of being forced into the role of an executor. Should I simply ignore this and let the process settle itself?
    -are the CRA different than other unsecured creditors? Do I need to pay them if I am trying to stop any involvement as an executor? or should I ignore the request to return the GST/HST credit? I ask because I have read that the creditors will get their portion of what ever is left of her estate to be divided amongst her creditors.
    -Taxes. I have normally done my mother’s taxes in the past. I am concerned that doing her taxes this past year will further cement myself into the executor role. Should I be ignoring her taxes as well?
    -If I simply do nothing, should I be expecting calls, mail, or receiving a plaintiff’s claim?

    It may also be useful to know that I did not cosign for any of her debt, my step father just completed the survivorship application for the home they lived in for 15 years as joint tenants, and he was also unaware of her debt (he did not cosign). He is also concerned that they come after his home. From the credit bureau's information, the debt appears to be from the past 5 years. Is that something he should be concerned about?

    Finally, My mother has less than 10 dollars in her bank account and kept separate accounts from my step father. The death certificate that the bank had taken, had my name with the title “Son/executor” next to it. Although, I have since gone to the funeral services to have to changed since I have not formally taken on the role as executor and do not plan to take on this role.

    ReplyDelete
  29. I know this sounds crazy, but can someone sue an estate, or myself as the one remaining executor (co executor is now deceased) 30+ years after the death? A lawyer was involved at every stage, and to the best of my memory everyone signed a release. We had clearance from Rev. Can., etc. but I don't even know if I can locate all of that paperwork at this point! I can't believe it, but two people have started to talk about taking legal action after all of this time. Am I on the hook for this for the rest of my life? I was sure that it was all signed, sealed, and dispursed as honestly and accurately as possible.

    ReplyDelete
    Replies
    1. You haven't SEEN crazy until you've spent a week in my office! :D

      You are an executor for life. However, if people have signed Releases, they're out of luck. They've already knocked themselves out of position to sue you by signing a Release.

      The Releases might have been filed at the court. Not everyone does that, but your lawyer might have. It's easy to do a quick search on the file number or the name of the deceased to see if they were filed. If not, check with the lawyer to see whether the file still exists. Some firms keep the paper files for many years when there are trusts or estates involved. Others transfer them onto e-files for storage. It's worth a call.

      There's also the matter of the 30 years passing. If nothing new has happened, they are out of time.

      Lynne

      Delete
  30. Does that mean my brother who is executor of my father's estate dos not need to provide us with the information about the estate? I have requested the information and he has not provided the in 2 years.
    Also because we signed the release does that mean he can keep what ever he stole from the estate?
    He provided no information at the time or since.
    Can I go to the police and charge him with theft, embezalment etc?
    There is between $50,00-$100,000 as far as we can tell, with him with holding the information.
    The executor has not privided the information and my father died in 2015 and the house was sold in 2016.
    Do I go file charges with the RCMP or spend money I don't have on a lawyer to stop him from robbing us?

    ReplyDelete
    Replies
    1. A release should have a date on it. If it has anything close to standard wording, it will say that you release the executor for all of his actions up to the date of the release. So if the thefts you are talking about took place during the time covered by the release, you are probably out of luck. If you signed the release based on falsified information provided by him, that might be an exception but as a general rule, the release is final and that's that. If releases could just be ignored, there would be no point to them.

      As I've said in many posts, if you have proof of theft or fraud, take it to the police.

      Lynne

      Delete
  31. My father died in 2015. There are 3 people who were to inherit. Myself my older brother (executor) and my younger brother.
    The house was sold in 2016 do not know how much exactly we have not recieved any information about the estate.
    The house was valued at $500,000 and suposedly it was sold for $475,000 while he is claiming we were 'lucky to get that for the house. The house had been totally renovated...
    There is so much conflicting bs that he 'told us,' we are possitive he stole from the estate.
    We only recieved $46,000x3 on the estate. $46000 of that was for my older brother (executor)
    The executor first said a bunch of stuff had to be paid, then later claimed it was paid before Dad died.
    Suposedly my older brother is now being an executor for a living and We are concerned he will rob those people like he did to us.
    I asked him for the information and he claimed he did he duty by law even though we have seen none of the information he was supose to provide.
    Can you sugest options?

    ReplyDelete
  32. My aunt died and there was no original Will in her safety deposit box, nor in her apartment. The executor found a photocopy at the estate attorney's office and passed it off as being in our aunt's apartment found a year after she died. The courts accepted this as truth and the seven million dollar estate went to the executrix and her organization. Can we sue the executrix for perjury and lying to the judge in order to get the seven million dollars?

    ReplyDelete
    Replies
    1. Yes, if you can prove it, then of course you can challenge the will and the executor. It isn't necessarily going to be easy, but then estate litigation generally is not easy. Don't wait too long or you may run out of time.

      Lynne

      Delete
  33. As executor I still owe money to a charity My late husband passed away almost 3 years ago
    I got involved with an online scammer who basically robbed me of my life savings & the money set aside for the charity Will I be sued or charged with my negligence

    ReplyDelete
  34. What if a beneficiary finds out that an estate disbursement did not include the money to be received from a residential property overseas mot yet sold.
    The executor is also a beneficiary
    How does the law protect the other beneficiaries and what is the recourse for the other beneficiaries

    ReplyDelete
    Replies
    1. Perhaps there is going to be another distribution. If there is future money coming into the estate, I would assume there will be another estate distribution once it arrives.

      If that's not the case, and the executor has said this is the final distribution of the estate, then you need to discuss this with the executor. If necessary, you might end up suing him for your share of the additional funds.

      The law protects the beneficiaries in several ways. The Trustee Act of each province sets out the limits and rights of executors. We have hundreds of years of trustee law confirming that executors cannot simply keep some or all of the estate just because they want to.

      Recourse for beneficiaries who do not receive what they are supposed to receive is through the civil court system. Sometimes it ends up in a trial, but the vast majority of disputes are settled by way of negotiation.

      Lynne

      Delete

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