As I mentioned in a recent post about tax clearance certificates (click here to read it), an executor usually waits for Canada Revenue Agency to send him or her a Tax Clearance Certificate before giving the beneficiaries their shares of the estate. This procedure arises from the fact that an executor is required by law to pay all debts and taxes before giving money to beneficiaries, and the Clearance Certificate is proof that there are no more taxes owing by the estate.
However, there is a process for an executor to give the beneficiaries most of their inheritance before getting the Clearance Certificate, a process known as an interim distribution.
Before an executor takes this step, consider the fact that if he or she pays the beneficiaries before paying Canada Revenue Agency, that executor will have to come up with the tax money, even if it is out of his or her own money. Once you've given the money out to the beneficiaries, it's pretty hard to get some of it back again to pay taxes.
To boil down a detailed process into a simple description, the idea of an interim distribution is to hold back enough money in the estate to pay future taxes, future expenses and any legal or accounting fees, and to distribute the rest to the beneficiaries. The executor will produce a legal accounting of the estate that details all of his or her financial transactions on behalf of the estate. It will also include a Statement of Proposed Distribution that shows how much of the estate the executor proposes to give out to the beneficiaries now, and how much is being held back for taxes and other expenses. The financial documents are given to the beneficiaries along with a Release document. If all beneficiaries agree and sign their Releases, then the executor can go ahead with the interim distribution.
How do you know how much to hold back for taxes? Obviously you must get this number correct. I have never proceeded with an interim distribution without working with a tax accountant who can estimate better than I can what taxes might be owing by the estate.
Most of the time, beneficiaries will pressure executors to make an interim distribution because it takes months to get a Tax Clearance Certificate. However, beneficiaries should understand that they cannot force an executor to make an interim distribution because it means the executor is assuming risk for the payment of estate taxes.
PLEASE NOTE: The maximum number of comments this system will allow is 200, and this post now has 200 comments. If you post here now, I won't be able to read or respond to your question. Please feel free to ask your question on any thread with less than 200 posts.
As executor, I'm facing an unexpected obstacle. The estate's lawyer is insistent that 20% of the estate be held back until final disbursement after the Clearance Certificate is granted in Spring 2011. From all the information I have given her, we can foresee no debts except a very modest tax payment (approx. $300) to Revenue Canada. The gentleman who died was an eighty-three year old pensioner whose only asset was his home and a modest bank account of several thousand dollars. I have ensured that his bills are paid completely. He was a widower with three daughters to whom he bequeathed his estate equally. The lawyer's position seems difficult to fathom and I wondered if you've come across anything like this in your experience. 20% of the estate is about $80,000. The amount seems unreasonable. The heirs agree. Is the judgment call mine to make or must I defer to the lawyer's wishes?
ReplyDeleteI understand that your response in no way constitutes a client/lawyer relationship. Thank you.
Hi Annette,
ReplyDeleteThanks for your question. At the end of the day, it's your call since you're the one who will assume the risk if you release the money and there is still tax or debt unpaid. Did you by any chance get that $300 estimate from an accountant? If not, that might be a way to go, as you don't want to be ambushed by a capital gain (or some other unexpected monster). I would expect any lawyer acting for an estate to suggest that you leave a nice big cushion in the account for unexpected expenses. Is there some pressing reason that the 20% shouldn't be held? As I said, it's your call.
Lynne
my wifes father is the executor of his mothers will (there are only the 2 survivors) - can He control when and how much money my wife gets? - he is currently only releasing a little per month and is threatening to 'cut her off' unless she if she doesnt do what he wants. Please advise
ReplyDeleteHi. The extent to which an executor can control the money going out to beneficiaries is going to depend on a number of factors, starting with the wording of the will. Is the money that your wife is supposed to get an outright gift or is it held in trust? If it's held in trust, the executor will have the amount of discretion set out in the trust itself. You and your wife should probably take a copy of the will to an experienced estate lawyer for a frank discussion of the will. It is highly unlikely that an executor will have any ability to cut someone off, but again, you need to know what the will says and what it means.
ReplyDeleteLynne
Thank you for this site, it's most helpful - and remarkably clear!
ReplyDeleteHere's my situation: There are two executors for my mother's will. One is a lawyer and the other is her second husband. The latter has essentially disappeared and is not making himself available to sign cheques for interim distribution, although the lawyer has agreed to it. Her husband also delayed the tax filings significantly - it has been well over two years since she passed.
The accountant has confirmed the tax holdback required is minimal, so we are anxious to settle this and one of the beneficiaries is in need of this money.
Do we have any recourse? Is there a time frame after which his inaction becomes a legal issue?
Once taxes are filed,how long does it generally take to obtain a tax clearance certificate?
Any help you can offer would be much appreciated.
Thank you.
Thank you-
Hi, sorry to hear that the estate is in such a schmozzle. Yes, there is in fact a time frame after which an executor's inaction becomes a legal issue. After one year, sometimes referred to as the Executor's Year, the beneficiaries can apply to the court to lean on the executor to get on with it. Taking something to court is always expensive and time-consuming, but if the guy just won't co-operate you might not have much of a choice.
ReplyDeleteIn your case, you have one willing executor who doesn't need the court's urging, so in my view the situation is a little different. Have you talked to the lawyer executor about asking the court to remove the reluctant executor? That is an alternative to the court trying to make him live up to his role.
There are issues with this option. An executor who is being booted off by the judge always has to account for his actions as executor. There might be some difficulty figuring out what he did versus what the lawyer executor did. But this might be a lesser evil than letting the estate go on even longer.
I hope it goes well,
Lynne
Great site. Coming to Calgary?
ReplyDeleteI haven't got any specific plans for Calgary right now. I do have plans for Leduc, Red Deer, Drumheller, Spruce Grove and Athabasca in the next few weeks. Do you have a conference or seminar coming up?
ReplyDeleteLynne
My friends Dad is the Exutar of her Grandmothers will (his mother) it has been coming up to 2 years since she passed on & the house sold several months ago. He says he is working on the paper work for the taxes but is planning a vacation for several months out of the Country. My friend is worried he will spend the money from the sale of the house which is to be divided among the beneficeries, can he do this? Can he access the money for personal use? He is leaving for the Philipines for 3 months. My friend has tried to approach this with his Dad but he gets angry & tells him to stay out of his business. He sent him a small amount as an advnace but has no idea when the remaining amount will be given. Is there anyway he can "steal" legally or move to the Philipines with the money? He is from BC & I'm not sure what he legally can do with the estate money. I don't get a good feeling but my friend won't stand up to his Dad or the other beneficeries.
ReplyDeleteThank you for this site it is very imformative.
ReplyDeleteOur grandfather recently passed away. We moved into his basement a few years ago to help with the farm and are still living here. His will distributes the estate equally between his three children.
We have decided to purchase the farm (his pricipal residence). My understanding is that the principal residence and any cash he had in the bank are not taxed. Can we purchase the house directly from the estate or do we have to wait until the estate is settled? I'm assuming that once the estate is settled and title of the property is registered to the three children they would have to pay capital gains tax when they sold it to us. If we can purchase the house from the estate, are there any tax ramifications we should be aware of?
Does it make any difference if we purchase the house before or after filing for probate?
Thank you very much for any information you can provide us with.
The executor's job is to distribute the money in the estate according to the will. So, no, the executor can't legally spend it on himself. If he does take the money and move to the Phillippines, there isn't much the beneficiaries are going to be able to do about it under Canadian law. This situation should be stopped before it happens. Why is everyone so afraid of him? If your friend is unwilling to even stand up for herself (and for the wishes of the grandmother who made the will) she stands a good chance of losing her inheritance. If she doesn't feel she can handle it alone, perhaps she should hire a lawyer to at least find out more about the state of the estate finances.
ReplyDeleteLynne
My father passed away in March 2009 and named my brother as executor. He has not initiated any communication regarding the estate settlement since April 2009. I asked him in June 2010 if he had applied for the tax clearance certificate and he said that he sent in the application in May 2010. I noticed that your blog indicates several months are required to receive the certificate but there are family problems that leave me wondering if he has, in fact, applied for it, or if perhaps he has received it and is not distributing the assets our of spite. Is there any way that the beneficiaries can find out if the clearance certificate has been applied for and if it has been issued?
ReplyDeleteMost estates are wrapped up in about a year. In common law, that's known as the "executor's year". Once that amount of time has passed, a beneficiary who has not received his or her share of the estate has the right to press the executor for a distribution.
ReplyDeleteIn your case, information seems to be scarce and possibly contradictory. You need to know more. He may have applied for the certificate but it has been delayed or rejected for some reason. Perhaps he has received it, as you say, but there is something else he needs to figure out. I've never understood or liked the secrecy of some executors; all that does is cause speculation.
As you've already tried asking the executor yourself without success, you might consider asking a lawyer to contact the executor for you. This doesn't mean you have to sue him. It just means that the lawyer will know better than you what to say in a letter and what to make of the reply. There could be a good reason for delay, in which case the executor will get a chance to explain it. But if not, the lawyer can help you get the show back on the road.
Lynne
One more question, please. If we do hire a lawyer, does the estate pay the fees (given the situation), or will be beneficiaries be responsible to pay for the consulting lawyer? 4 out of 6 beneficiaries (executor is also a beneficiary) are involved in this process.
ReplyDeleteI would not assume that the estate is going to pay for it. If the matter did end up in a court fight, you could ask the judge to have the estate pay but you shouldn't ever count on having your costs covered from an estate.
ReplyDeleteI would think that any lawyer who is about to jump into a family situation that might be a fight is going to ask for a retainer ahead of time. Perhaps you and the other beneficiaries could get together and pool your resources.
Another possibility is that if it turns out that the executor has no good reason for delay or has somehow messed things up, you could ask that he lose some of his executor's pay. Perhaps in the amount of the legal fees. This would mean that this amount remains in the estate for the beneficiaries, in effect repaying the legal fees. It's worth a try.
Lynne
Hi there,
ReplyDeleteMy father passed away June 2009. My cousin is the executor, who has not been communicative since the beginning. I have asked asked questions regarding the status but they refuse to give me any concert answers, they have been telling me for the last year that they are waiting for "one more document". These people have been unreasonable and uncooperative. I was told that they will slow the process down if I continue to push them. The first time I had ever asked anything was last yr at tax time which was almost a yr. Anyhow I guess I want to know from you if A) am I out of line asking question considering I am an heir on the will. B) is this out of the norm for a will to take so ( not a huge estate) C) do I have any recourse?
I look forward to your response.
S
Hello S,
ReplyDeleteA) You said you're an heir, but you didn't say whether you're a residuary heir or not. Given that the person who passed away is your father, I'll assume that you are. If so, yes, you are entitled to ask questions. I always shake my head when I see executors getting their knickers in a twist because of beneficiaries asking questions. Certainly beneficiaries have that right, and what many executors don't seem to get is that the beneficiaries have an OBLIGATION to ask questions. They are the ones keeping the executor in line.
B) It's been almost two years since your father passed. I would say that's beyond the norm for a modest estate, but not unheard of. No doubt the "one document" they are waiting for is the tax clearance certificate. Sometimes that really does take an unbelievably long time to arrive.
C) Yes you have recourse, but always think carefully about both positive and negative potential outcomes before going ahead. It appears that the executors are not going to give you anything voluntarily, or perhaps they think they already have. Your next step is to hire a lawyer, not necessarily to start a fight, but to find out what's happening. Just be warned that lots of people out there consider lawyers to be hired pitbulls (a description I've never bought into, but then, I'm a lawyer) and may react in a hostile way at what they consider an act of war.
Lynne
Help "please"
ReplyDeleteMy mother passed away in march 08 leaving everything to her husband and children, my father then passed in oct08 leaving everything to the 5 children. We were informed that as no one of "sane nature" resided in Ontario we had to get an estate trustee to handle the matters. Needless to say we used our parents real estate lawyer who acts in good faith but is approaching 75 years old.
Everything goes slowly and we agreed on a $300 per hour charge for his service. Needless to say he sells one thing at a time, now almost 3 years later he has over $300,000 (left) in cash on hand but does not want to release the funds as he (or accountant) failed to file with taxation on time. We were then penalized over $40,000 in penality and our lawyer wants to keep the $300,000 in the event one of the beneficiaries decides to sue him over his mistake 9or accountant) in the filing fee.
So as a result of someone's negligence, not necessarily his (maybe accountant or taxation canada)the estate has $40,000 less, and because he is the estate trustee or lawyer he is failing to disperse the $300,000 in cash on hand as he might need it to defend the initial mistake.
My question is, is this right, or should we be getting a new estate lawyer, this mistake or taxation penalty is over a year old and still no resolve. I see our monies all eaten up by fee's and time replying to our e-mails and phone calls requesting our own monies.
3 years and counting.
Wow! what a mess. I have some questions of my own. I'm not sure what is meant by a "sane nature" or who gets to decide something like that. But if there were no suitable famiiy members, why didn't you just hire a trust company? A trust co would have charged you a percentage of around 3 1/2 %. Using the lawyer you used, you obviously spent WAY more than that.
ReplyDeleteAlso, why would you get a real estate lawyer? You don't go to a dentist to get your appendix looked at, or a pediatrician to get your eyes checked. Unfortunately you collectively compounded your mistake by hiring someone that likely doesn't really know the area of law as well as a specialist would.
Now it seems that the estate is mired down and not moving. Worse, you as beneficiaries are losing big time because errors are being made and not being addressed. You're right, the mistake could have been made by the accountant, not the lawyer. Especially if the accountant is one that normally wouldn't be working on estates.
If it were me, I'd bail on that lawyer and get someone new to help. If the trustee was appointed by the court, you may not be able to replace him. But keep in mind that the court appointed a trustee, not a lawyer. The trustee is an individual person who just happens to be a lawyer. He should not be both lawyer and trustee for the same estate. You can hire an estate lawyer who will have to try to guide the trustee.
Best of luck.
Lynne
What a wealth of information, thank you. My question, my Dad chose my brother as Executor of his will, there are four siblings. My brother is very organized and up to the task. After my Dad's death my brother changed the locks on the house to "protect the estate" and do an inventory. He has not allowed us back into the residence. I live in another city and my brother emailed me yesterday to say that he has gone through the entire house and disposed of what he considered garbage and set a date for us to come to the home to draw straws for what he considers to be the estate. I was looking forward to going home to my Dad's home and sifting through my Dad's things and am shocked to hear that my brother has done this without any discussion. In discussions with my Dad, I know that this was not what he wanted. He had directed me to take certain files and items. Does the Executor have the right to lock us out of the parental home and to discard personal items of my Dad's without communicating the process to his sisters. Thank you.
ReplyDeleteHi. I'm sorry to hear about your Dad. This probably isn't the answer you wanted, but yes, the executor does have the right to lock everyone out of your dad's house. In fact, it's important that executors do exactly that where there is no spouse left living in the house. You have to realize that not everyone who enjoys sifting through their parent's things does so to feel closer to their parent, as I believe you wanted to do. In many, many cases items disappear because the kids help themselves. Then the other kids get mad at the executor for not protecting the estate property.
ReplyDeleteIf your dad wanted you to have specific items, he should have let the executor know. There is no way an executor can take into account instructions that he simply wasn't given, particularly if those instructions conflict with other instructions he DID get.
Your brother sounds like he is handling the estate just right. Setting a day for everyone to gather and choose items is one of the ways lawyers recommend that executors proceed. It's designed to give everyone equal access, equal information and feel part of the process.
As you haven't been to the house yet, you don't know which items are there and which are not. You may yet be able to have the items your dad mentioned to you. It won't be an easy day for any of you, but hang in there.
Lynne
My husband's father passed away a couple of years ago. He was appointed executor. He got all of the necessary tax clearance and certificates prior to distributing the estate. The estate was distributed and then Revenue Canada came back to say they made a mistake and something that was distributed was taxable so it has automatically been applied to my husband's personal taxes. If Revenue Canada can do this then what is the point of obtaining a tax clearance certificate prior to final distribution?
ReplyDeleteThere is no trust so I do not think that another tax clearance letter was required. This was a mistake Revenue Canada made in assessing if an item was taxable.
Thanks in advance. Your advice is helpful for those unsure as to how to proceed.
S
As this is a purely tax question, I would suggest that you consult an experienced chartered accountant.
ReplyDeleteLynne
Good info. Thank you.
ReplyDeleteMy questions are: can an executor exclude a beneficiary mentioned in the will?
Can an executor get a clearance certificate without giving beneficiaries information regarding the estate including expsenses?
Hi. You're welcome.
ReplyDeleteSince I have no facts, obviously I can't comment on a specific case, but I can answer both of your questions in a general way.
First of all, can an executor exclude a beneficiary named in the will? The general answer is no, if by excluding a beneficiary you mean arbitrarily deciding not to honour a gift made in the will. It's not the executor's job to re-write the will, though lord knows there are enough executors out there doing exactly that and getting away with it.
It could be that there is some condition or contingency attached to the gift to the beneficiary. For example, sometimes people leave gifts that only take place if the beneficiary has reached a certain age, or has graduated from college, etc etc. If the conditions aren't met then the executor can rightly exclude the beneficiary.
As for your second question, certainly an executor can get a clearance certificate without any contact with beneficiaries. The clearance certificate only indicates that all taxes have been paid. The beneficiaries don't have any say in that.
Now, having said that, it would be pretty unusual for an executor to get all the way to the stage of requesting a clearance certificate without providing any information to the residuary beneficiaries.
Hope this leads you in the right direction.
Lynne
Hi there,
ReplyDeleteHow long can money stay in an estate with waiting payments that are not claimed? My mother passed away 2 years ago, and we sent formal notice to each of her debt holders that the estate can only offer each aprox 20% of her total debt. The estate was divided equally among each debt holder and to date, after 2 years, only 3 credit card companies have accepted the offer, and the balance is still in our estate account.
What i am wondering is how long do they have to accept the offer, and when can we distribute the money to family?
Hi Lynne,
ReplyDeleteMy wife is a beneficiary of her father's estate along with her 2 sisters. Our nephew who is a CA was appointed to be the administrator of the estate. The estate probate certificate has been issued by the court and he has set up an estate account with the bank my late father-in-law used. My nephew has agreed to do an interim distribution and held back 5 times the amount needed to settle the estate. We are okay with that as we suggested that he be conservative. The bank would not issue cheques to him for the estate account. They are controlling all payments. they have paid for funeral expenses, final bills and the deceased final income taxes. He has provided a direction to the bank to issue the interim distribution with sign-offs from all the beneficiaries. The financial advisor at the bank said that this would have to go through their Estate Department for approval. It has been over 2 weeks since this request was submitted. My question is, do the banks have legal authority to interfere with an estate administrator's management of the estate account?
Can they refuse to issue cheques to the administrator? Under the estate law that I have read I see no legal obligation for financial institutions to regulate this scenario. The explanation provided to me by the bank is so that to ensure the beneficiaries are paid according to the direction of the will and to mitigate any potential lawsuits from beneficiaries in the event that an administrator runs off with the estate's money. Isn't that the law's job?
Thomas
Hi Lynne,
ReplyDeleteMy friend's father is an only child. The grandparents have both passed away (grandmother most recent - 2006). The will provided an inheritance of $25,000 plus interest for each of her 3 grandchildren to be paid at age 21. My friend is the yougest of the 3. The two older grandchildren each received $25,000 (no interest) when they turned 21. My friend has recently celebrated his 21st bday. He approached his father (who is executor of the estate) about receiving his inheritance and has learned that his father has spent the money. Is it legal for the executor to do this? What, if any, type of recourse does my friend have??
Thank you for your time...
Very informative, thanks
ReplyDeleteMy question, My grandmother passed away in January 2011, my Uncle and Aunt are co-executors, but she (Aunt) is very uncooperative, wont speak to the lawyer or meet with him. She will only communicate through her sister, and she wants her money from the estate given to her in cash through her sister. I believe she owes the government megga back taxes and this is the reason she will not meet with anyone. How long do the beneficiaries have to put up with her not willing to cooperate and can she be removed as executor? Thanks
Hi,
ReplyDeleteYour aunt's behaviour reminds me of the way small children hide - the "if I can't see you, you can't see me" method of concealment. If you are correct in assuming that she is trying to fly under the radar by not meeting with anyone, she is naive and frankly, pretty ridiculous. The estate is a taxpayer on its own, and the government will see its record of what way paid to whom. Including your wanna be-invisible aunt.
On to your question. I really wonder why she is even willing to continue as executor. She should have renounced her executorship and let your uncle carry on solo. However, as the estate is already underway, it's too late for her to renounce; that has to be done before the executor takes any steps.
She can voluntarily step down, but will require the court's approval to do so.
Removing an executor is possible, but it's difficult because the court wants to try to uphold the choices made by the testator in her will. That's not to say it's impossible, but it will depend on the facts. Keep the general (common law) rule of one year in mind - that any executor has a year to wind up an estate. If the year elapses and it's clear that she is delaying for her own personal gain, perhaps you should speak to an estate litigation lawyer to get a feel for how strong a case you have.
I feel your pain. I can't begin to tell you how many messages I get about executors doing a terrible job, usually for their own ends. Best of luck.
Lynne
What an awesome blog!
ReplyDeleteMy grandmother passed away in jan 2011. She only had 3 bank accounts and a house, with no debts.
Probate has already been granted about a month ago. I am wondering, with the total will in the 700k (divided between 4 people) , can a partial distribution be possible anytime soon?
My guess is the only thing holding things up is the certificate of clearance from the CRA and the upkeep of the home (value is 170k of the 700k).
Just wondering if its normal to have a distribution in these circumstances Thank you kindly!!
I am currently the Power of Attorney for my mother, who is living out her years in a long term care facility because of extreme dementia. My niece has been named as a beneficiary for an assurance policy that my mother has (70% to her, 25% to myself). But this will not take effect until such time that my mother passes away. But knowing that money has been set aside for her for post-secondary education , she has asked if she could get an advance on a portion of the inheritance because she is attending college this fall. And while I will get her and her m other to sign an agreement that the funds will be returned to the estate once she receives her inheritance, could I be doing something that is jeopardizing to myself by distributing funds early (I am not the Executor of the Will nor do I know how it is worded, although I am the only remaining immediate family member)
ReplyDeleteThe first thing that strikes me in this scenario is that "funds have been set aside" for the niece. They have not been set aside. You said that the niece is the beneficiary of an insurance policy - that is not estate money! In fact that money will never be in the estate and has nothing to do with the estate. So my first reaction to the question about whether the niece can get an advance is a resounding NO.
ReplyDeleteThe second thing that I notice is that you are the POA for your Mom, not your niece. Your job is to maximize your Mom's financial position and always to act in her best interest. You are only entitled to use her money for your Mom, her spouse (if there was one) and her own children who are financially dependent on her. Not your niece.
If I were in your shoes, I wouldn't do it.
Lynne
Hi Lynne,
ReplyDeleteMy father passed away in 2005 and we are still trying to get his estate finalized. Without going into the whole long story, my question to you is.. can his lawyer hold onto the estate funds even after we've received the Clearance Certificates from CRA? There is absolutely nothing left to do. During the past 6 years, I've had this lawyer investigated by the Law Society who did conduct an investigation and did find areas of concern. I've also had to hire another lawyer to represent myself and my siblings (I am co-executor). We've all signed a Release and Direction which were faxed to the lawyer in question by our new lawyer on August 19th 2011. Our lawyer has called to follow-up but his calls are never returned.
I told our new lawyer that perhaps a call to the local authorities might result in the release of our inheritance. Any suggestions would be greatly appreciated!!
Hi Lynn,
ReplyDeleteMy dad passed away. There are a number of siblings. There are some unresolved property issues that are delaying the settlement. Because of this, we have not been able to arrange an interim distribution. Some of the siblings will not sign until the property issues are resolved. Can the executor proceed with an interim payment despite lacking signatures or are there time frames or legal issues that prevent this?
Thanks for your help.
All potential beneficiaries must be notified
ReplyDeleteI live out west and have a sister living out west too, I have 2 brothers living back east in ontario. Have not had contact with both brothers
for 20 plus years. My father loved all of us each in our own ways. He passed away last summer and I still haven't seen the will, however know
that we are all listed as four equal beneficiaries. They both cleaned out my dads place and my sister and I recieved nothing, or a list of
its contents, we know he had a saftey deposit box, a savings, checking and RRIF accounts.I was told that they dont know my dads lawyer and
they think she doesnt even retain her office anymore? They are asking me and my sister for bank account numbers so they can give us "our"
share. It seams pretty sudden as its only been 90 days since death. Ive not given my bank #, signed a release, or seen any financial
documents which Im hoping to see. My questions are, how can I find out the truth about what my dad really had, and can they both just keep
what ever they want? can they produce financial documents that have things omitted from it ? Who watches the executor? how do i fin out for
my sister and I Thanx
Can a family member who you were co-listed as Executor and Power of Attorney remove your name due to the fact that you live out of the country?
ReplyDeleteMy father passed away a few weeks ago.
ReplyDeleteBoth myself and my sister are the executers and beneficiaries of the will wich is to be divided equally.
My sister was living with my Dad at time of passing. I wish to list house and she wishes to wait until spring and informs me the household expenses should come out of both half of the estate.
My question is am i not right in thinking that all expenses including taxes should only come out of her settlement as she wishes not to sell.
I would appreciate any advice.
thanks
Hi, thanks for your question. There is a lot to consider here, and my first question is why she wants to wait until spring. If she needs a few weeks to get her stuff together and find somewhere to live, that's probably one thing, but spring is a good 6 or 8 months away. Does she think that the selling price would be higher then? If it is, and you two share the higher proceeds equally, you're both going to benefit. However, if the bottom falls out of the market and the house sells for significantly less in the spring, she could be in a precarious legal position.
ReplyDeleteOn to your question about the expenses. When a house is in an estate, the residuary beneficiaries (in this case both of you) usually pay for ONLY the costs that help maintain the capital asset. These expenses are the repairs to the house, the fire insurance and the property tax. Other expenses, which you might think of as consumables, such as light, heat, water, phone, internet etc are NOT to be paid from the estate. They should be paid by your sister because they don't enhance the value of the house.
Lynne
Hi,
ReplyDeleteMy grandmother passed away in April of 2009. We are located in California and she was a Canadian citizen and passed away in Canada. The Executor of the Estate is the lawyer that handled her estate and will. We were all given an interim distribution and $100,000 is being held till the clearance certificate comes back. July 2011 was a year from the date we were told it was filed and come to find out last week it was never filed so we are being told it will be at least another year. The lawyer is claiming it is not her fault that she didn't check with accountant to ensure it was filed and the 18 month time frame has not lapsed so there was no reason to inquire sooner. She takes no blame and all she can say is "I am sure this is frustrating for you". The lawyer has already taken her share so she is not affected at all by this matter, is there anything I can do at this point and is the lawyer in violation of the law in any way or can I file a complaint for negligence?? When is a lawyer supposed to take their share of the estate? Please help
Watch out before making interim distributions. Canada Revenue Agency is now asking for the social insurance numbers of the beneficiaries as part of the process that takes place before a clearance certificate is granted.
ReplyDeletehttp://www.cra-arc.gc.ca/tx/ndvdls/lf-vnts/dth/clrnc-eng.html
In my view, this sets the stage for CRA to serve a garnishing order upon the estate in order to collect income taxes owing where a beneficiary owes unpaid back taxes. I haven't read the Income Tax Act or the applicable regulations, but I imagine that the CRA has the power to do this.
Although this is a hypothetical situation, it could happen and if the monies to satisfy the amount demanded in the garnishing order are not available because of an interim distribution, you as personal representative could possibly be held liable for the amounts owing.
I would be seeking advise on this point
before making any interim distribution before a clearance certificate has been issued. I would also be asking the beneficiaries to provide proof that their income taxes for the most recent taxation year have been paid in full before distributing anything prior to clearance being issued.
hello My Husband passed away three weeks ago and I have received a letter from his son's lawyer lawyer requesting a copy of the will and statement of assets at the time of death.My husband had no life insurance all he has is a LIRA fund that he has left 20% to me and 80% to his son.My husband had no assets as we were only married for 1 1/2 yrs and moved into my home when we were married.His son is aware of a CPP settlement he received prior to his death.Does he have any claim to anything besides the LIRA fund since my husband has left everything to me in his will but this Fund.
ReplyDeleteThanks for the excellent blog!
ReplyDeleteMy uncle's estate has not been settled after three long years. The executor seems to be dragging his heels. There was a Clearence Certificate apllied for about 18 months ago and through some screw up, we don't really know what happened, it was not sent or something went wrong. It was expected to be sent about 8 months ago but they had to submit it again. We contacted the lawyer for the estate two months ago and they talked to the executor who said the clearence was approved and sent to the person's supervisor for final clearence and we would receive it within a month. The Lawyer said the money would be distributed within a month, so the executor, my other uncle, would not agree to an interim distribution. That was a little over two months ago.
I am thinking I should contact the Estate lawyer again to find out what is going on. My uncle had named his three surviving siblings as beneficiaries, my Mom, my other uncle and my aunt. My Mom died 18 months ago and never got to enjoy her share but we, her children, will be getting her share.
If the certificate does not come soon, is there some action we can take to have an interim distribution made? My Mom an the rest of us did not get along well with my uncle, could he be delaying payout in spite? It seems funny that it has taken this long and then after getting our hopes up that it is delayed once again.
Thanks so much for your time.
My Mom was a beneficiary of an estate in 2006. She died in 2010 and we discovered that she never cashed the $16,000 cheque. We contacted the executor who, after many phone calls and excuses gave us (the beneficiaries of my Mom's estate) $4,000 until he could sell his cottage to raise the rest of the money. Is there anything we can do? We have a letter from him confirming that he owes us the $12,000. We are in Ontario. Thanks for your help.
ReplyDeleteMy grandfather passed away leaving my aunt executor of the estate. My aunt has invoiced the estate most of the estate proceeds for taking care of his affairs while he was living as well as charged trustee fees. Is this allowed?
ReplyDeleteHi sbm,
ReplyDeleteI'm very sorry to hear about the recent loss of your husband. I'm glad he made a will to protect you, and I believe that it will. His son hired a lawyer to find out the situation, and you were cooperative and provided information. Not much else is likely to happen there, though no doubt you will have to coordinate the paperwork for the LIRA with the son's lawyer.
I haven't seen your husband's will nor do I know anything about it, but for the purposes of this question I'll assume that it's valid. If it is, I don't believe that his son will have any claim on the estate. I say that because it appears that his son is an adult who is financially independent of his father, and you haven't said that he is handicapped in any way.
This indicates to me that the son is not a person who can be defined as a dependent of your husband. In the normal course of events, only dependents have an automatic right to ask for some or more of an estate.
Having said that, I know there are parts of the country that allow variation of wills on moral or "fairness" grounds. Is there any reason why it would be more fair for the rest of your husband's estate to be shared with his son?
Lynne
Hi Alice,
ReplyDeleteIf the executor has acknowledged the debt, has made partial payment and is voluntarily selling assets to repay the rest,I don't see that there is much left to do in terms of collection that would advance the matter further. Perhaps you could put a lien on the title to the cottage in the amount of the unpaid debt. That way the debt would have to be paid before clear title could be had to the property. Before you do that, weigh the cost of placing and later removing the caveat against the risk that the executor won't actually pay up.
Lynne
Our mother passed away over two years ago and other than an initial distribution of $40,000 by the Estate Administrator to each beneficiary, no other distribution has been made even though there is still approx. $1-million in cash, real estate worth $350,000 and some gold jewellery remaining as the bulk of the estate. All estate tax matters have been dealt with and there are no legal impediments to the estate. All that remains to be done is to sell the real estate (which may take some time since it is in Europe) and the jewellery. My two questions are: (1) Does the administrator have the right not to make any further distributions until the real estate and jewellery are sold? (2) Do all the beneficiaries have to agree to any interim distribution? Thank you.
ReplyDeleteI am wondering if an estate owes you money as a residual beneficiary (parent passed away who was sole beneficiary, and am a 1/2 beneficary with sibling in her estate), can the executor withhold this money from you? Do you HAVE to sign a release - what if you do not totally agree with the handling of an estate?
ReplyDeleteThe executor can't withhold money from a beneficiary indefinitely. He or she can withhold it until the estate is wound up and Canada Revenue Agency has issued a Tax Clearance Certificate. Unfortunately it takes months to get that certificate and many a beneficiary (and an executor) has run out of patience while waiting for it.
ReplyDeleteNo, a beneficiary does not have to sign the release that is presented if he or she doesn't agree with the accounting. If signature were mandatory regardless of the contents, the document would be completely meaningless. If a beneficiary doesn't agree with how an estate has been handled, he or she has a couple of choices, depending on what it is they don't agree with. For example, if they don't agree with how much the executor wants to charge as a fee, they can negotiate that with the executor.
If the problem is something larger, say the beneficiary thinks the executor sold the house for only half what it was worth, the beneficiary is probably going to have to hire a lawyer to deal with it.
If you don't like the accounting and simply withhold your signature without doing anything about it, you run the risk that the executor won't ever pass his or her accounts. Whatever problem you have with the estate will never be addressed.
Lynne
Good day,
ReplyDeleteI have a couple of questions.
My father passed away the very beginning of Jan. and my brother passed away 2 months prior to that. I am one of the executors of my fathers will.
1. Since he passed away at the beginning of Jan. do we have to wait until next year to do a final return or can it be filled this year with his 2011 return?
2. He had a RRIF that has 2 directed beneficiaries on the account, myself and my deceased brother. The will also mentions this account and is directed to pay my brother's half to his 2 adult children in the even of us predeceasing him. I was going to use some of this to pay funeral expenses but the bank has yet to pay this out to myself and my niece and nephew. How long does this generally take as from what I have read it is not part of the probate or probate tax but has to be on his final tax return?
Thanks
MEL
Hi Lynne
ReplyDeleteMy mother recently passed away and I am her executor. My brothers and sisters and I are all in accord regarding her assests and there are not arguments at all My problem is that I received the cheque for the death benefits and I have been trying to deposit it. (Mom had a miminal bank account - joint with me- which I will divdide equally with my brothers and sisters once all the monies have come in. There is one more small cheque for under $2500 yet to come. ) I went to a branch of the bank mom and I have the joint account with (mom was in Saskatoon but I live in BC) and they refused to deposit it to the account or set up and estate account for me. they told me I had to go to my bank. A different bank altogether. So I went there but they refused to help me either saying I had to go to her bank. From whatI read, I should be able to set up an estate account without any trouble and use the money if I need to in order to finish paying her funeral expenses and ambulance costs. How can I get this done with the banks not helping me at all
I agree with the bank not depositing the cheque into the joint account, as that would be the same as giving you the money personally. But they should have opened an executor's account for you to handle estate funds.
DeleteYou were right to go to your Mom's branch. You are a customer there and so was she and it's the logical place. I haven't heard of anyone refusing to open an account in these circumstances.
It sounds as if your mom's bank made an error. You should go back there and talk to the most senior person you can. In the Scotiabank branches, the people who know the most about estate matters are the Manager of Customer Service and the Branch Manager, so see if you can meet with the equivalent. If even the manager won't open the account for you, stand firm and request that they call their legal department. Every major bank has a central legal department.
Another idea is that if you're dealing with a bank that has a trust company (Scotia, CIBC, RBC, TD, HSBC) ask them to call there while you wait to see what the trust manager has to say about the account.
Lynne
My father-in-law passed away about a month ago. He has 4 children, but divorced their mom about 30 years ago and never provided any financial support for the kids after they separated. He married the "other woman" and the kids have done their best over the years to build a relationship with this lady and maintain a bond with their dad. They sold their farm and downsized to a home and to our understanding were able to set aside a good amount of money for their retirement. Since he has passed, all the wife has done is to moan about how she has no money. She wasn't going to have a funeral since she had no money (so the kids are now putting on a memorial service at their expense). She has his ashes and said she is just going to spread them in a farm fence line (which he had previously said he did not want to happen). The kids would like his ashes and to buy a cemetery plot so he is laid to rest somewhere. His dog was ill, so one of the kids took it home to care for it and has now had ++ vet bills and ultimately had to put the dog down. The one thing my husband wanted of his dad's was his hand tools. He spoke to the wife right away and told her he would be willing to buy the tools from her (since he was pretty sure she would include them in an auction with some farm stuff they still had around). She said she needed the money and he assured her he was sure they could come to an agreement. She just called to tell him that she had an auctioneer come look at everything and that if he wanted the tools he would have to travel there for the auction and bid on them.
ReplyDeleteOne daughter had once been told by her dad that he wanted her to be the executor of his will -- but she has never seen a will. We don't know if one exists. All the kids agree that if my husband had asked his dad for the tools before, that he would have said to take them. My husband is very sentimental about this, as some are also his grandfather's and he would like to be able to pass them down to his own sons.
Can she go ahead and auction his possessions? What if there is a will and the tools were already bequeathed to my husband? No one wants to rock the boat until at least after the memorial service is held (next month as some siblings had to make travel arrangements) and ultimately would like to keep a pleasant relationship with her -- but this seems doubtful as she is being so difficult. How can we go about seeing if there is a will?
Lynne, reading some of these questions makes me wonder. My brother passed away a long time ago (very young). My mom in 2005, my sister 9 months ago. Now my dad. I'm the baby of the family, born late in their lives. Took care of my mother and father. Was POA, but never really used it, my dad and I were very close, my best friend. I have a brother I have seen 8 times in my whole life, last saw in 1980. Attached to my dad's will was a document I never knew about. It says "in the matter of his will, that he be excluded as a residuary beneficiary and that he has not had contact, does not know where he resides or if he is alive. That he is a stranger." It also states "It is my desire that this Statutory Declaration be used and relied upon if any proceedings are taken by him to vary the provisions of my will" I'm unsure what this is all about. Help! Also the bank representing his account has said this will not go to probate, He had no assets, just memorabilia that means alot to me. He liquidated everything the week before he passed. I have an accountant that filed his taxes, both for 2011 and terminal tax return (refunds). All cheques he had coming for March I have forwarded to the bank (Pensions, Insurance etc., as well as his only 2 debts (final phone and cable bill-he was in extended care living). I also sent the bill for his headstone engraving to the bank. I'm confused and still grieving from losing my dad, I miss him terribly, where do I go from here? What's next?
ReplyDeleteI'm so sorry to hear about your Dad. You were lucky to have a father like that and I'm sure you treasure your memories of him.
ReplyDeleteGrief doesn't make it any easier to deal with an estate, that's for sure. You haven't said who your father left things to in his will. Did he leave all to you? Obviously he left out your estranged brother, but were you to share the estate with anyone else? If so, you should let them know.
It's unusual to see a separate Statutory Declaration like the one you mentioned. Usually if a "logical" beneficiary like a son is going to be left out of a will, there is a sentence in the will that explains basically the same thing that the Statutory Declaration says.
If you are the only beneficiary, you are entitled to keep the memorabilia, as well as any funds left over after the bills are paid.
Are you the executor of the will? If so, it's up to you whether or not the will goes to probate. If there's no real reason to go to the expense and trouble, then by all means don't do it. You should still follow the will without submitting it to the court for probate.
You said that your father had no assets but you also said there is a bank account and liquidated everything a week before death, so clearly there is something there. Make sure you apply for the CPP death benefit. It's only $2500 but it's intended to help cover costs like the funeral and headstone.
It sounds as if you have things pretty well in hand. You've even dealt with the taxes. Once all of the bills have been paid, pay the rest of the funds to yourself and close the account. You don't have to declare the inheritance on your own taxes. You have covered everything off very well as far as I can see.
Lynne
Hi Lynne,
ReplyDeleteMy wife passed away in November 2011. I have inherited a 1/3 share of the value of the house she owned, and have the option to purchase the property by buying the other 2/3's from the estate
The estate lawyer who drew up the will told the executor that the house could be sold to me before the house is out of probate (applied for in December) so long as my wife's taxes have been done, and show no money owing.
With the risk of rising interest rates I have been anxious to buy the balance of the house from the estate.
I asked the executor to make sure with the lawyer that their information was indeed correct.
I asked the executor the following questions:
What additional, or upcoming steps must be taken to complete the administration of the estate? How much funds remain for ongoing payments to the lawyer and expenses to the estate? Are there any receipts or documents missing that would be needed in the event of an audit? Are there any tasks left to do that might be done by an accountant or specialist? When will you call the lawyer about the query in my previous email regarding the prerequisite conditions necessary for the house to be sold?
These are important questions for me; do you feel these are reasonable for me to ask?"
The first email response that I received from the executor stated simply "I will let you know when the house can be sold to you"
I wasn't satisfied with this answer, and restated my questions in the above quoted text. The reply I got was:
"These details of the estate are my responsibility. The sale of the house pertains to you and I will let you know when you can buy the house. The house sale will take place when I have finished a number of other details pertaining to the estate."
I feel that the executor is being evasive and secretive. They also told me that they were reluctant to call the lawyer so as not to incur more cost to the estate.
I feel I have the right to know what the status is of the ongoing activity with processing the will, and to know that appropriate resources are being reasonably employed.
Does the executor have the right to withhold answers such I have asked?
My parent passed away Sunday and my brother was made executor. He does not contact me about anything, but will tell everything to my boyfriend. My brother did say I could come to the home to get whatever I bought or would like and take it home. Is this legal or should I put something in writing? What's left in the home is not worth much as my parent had dispersed things before he got ill. My brother did tell me that the will would probably go into probate until he can find out what is going on with my ill sister.
ReplyDeleteHi Lynne
ReplyDeleteMy question is; Is it legal for a lawyer to have executor's sign papers giving her control of an estate. My 2 uncles are executor's of my grandfather's will and my Uncles' wanted to keep a lawyer out of the estate matters as it is costly, however when they hired a lawyer to close the sale of my grandfather's house to one uncle she had them sign papers giving her control. I questioned her and she told me I wasn't privy to this information. She has since held the money from the house sale in an account in her name and won't distribute the monies. She keeps saying she is waiting for a clearance certificate which was sent to her by my uncles 4 times. This woman seems shady to me do I as an inheritee of my deseased father's share have rights to inquiry as to the where abouts of the money? My uncles cannot get the lawyer to return calls and on visits to her office she has shut the door in their faces saying she is busy. We are all concerned.
My wife and brother are in dispute. My brother in law has filed against my wife claiming many accusations. Now 2 years in to the process we find that many of the items have no merit. However he still refuses to settle. What can my wife do.
ReplyDeleteThere are three executors stated in a will. Will this pose a problem down the road. Was the layer who drafted this will negligent in allowing this to happen.
ReplyDeleteThank you Lynne. To answer your questions, he left everything to me except for $5000.00 to my brother, who so far can't find, I will be putting this in a savings account until I locate him. Because I am so young he had listed another executor, but in searching for him, his brother called me last night to let me know he had passed away. He has been so kind, and said he would send whatever I needed to prove his passing. The bank called me yesterday and said I need a lawyer and to file for probate because of the large amount. They also have given me the name of a lady that handles estates and financial affairs that is attached to the bank. Do I need to hire a lawyer and file for probate? I feel like the bank is controling everything and don't have anyone to go to. The bank won't let me have access to the accounts to pay for things, I have had to send the bills to them to pay. Is this right? What should I do? Does the bank have control like this? My friend says something is wrong?
ReplyDeleteHi Lynne,
ReplyDeleteMy father has been the executor for two estates where both myself and other siblings were named as heir's. We have never asked to see the will for each nor was it ever shown to us. It was always difficult to ask questions as he would get very defensive so we've never asked for a final accounting. As far as I'm aware the estates have not been fully settled, I belive we received interm distributions, and for my grandmothers it has been nearly 15 years for my great uncle about 8. I'm assuming that after the interm distributions, debts, taxes etc. there would have been a balance of some sort. How do we determine the status of each estate, whether both have been settled and
whether there was a balance of funds the heir's should have received.
Thanks in advance,
Donna
Discovered your wonderful blog while researching about an issue we, the residuary beneficiaries, are encountering with the executor, who is not a family member nor a professional executor, of my aunt's will.
ReplyDeleteMy aunt passed away in early this year and right from the start the executor has been antagonistic and uncommunicative. The nasty emails began after we asked the estate attorney if it was appropriate for an individual to be included in emails to the heirs, discussing specifics of the estate. She was assisting but not in a professional or advisory capacity. When we then went to the estate attorney asking how to deal with accusations made by the executor, we received an even angrier email from the executor. After this email to the estate attorney, certain of the heirs were then subjected to a vitriolic email from the executor which claimed that the estate attorney was of the same opinion.
The attorney has responded only to the first email from the heirs but by the timing of the nasty emails from the executor we suspect that the attorney has simply passed the communications on to the executor. The attorney has not responded to advise that he cannot discuss issues with the heirs.
In early April, the executor allowed the heirs to sort through residual assets at my aunt's apartment. No mention was made that we may be allowed to also sort through items held in a storage locker rented by my aunt, despite requests as to when the appraisal company would be finished with the unit. We discovered this weekend that the appraisal company had never been to the storage unit and that many items have been removed without the knowledge of the heirs.
In March we were informed by email that we had until May 11th to provide written request for the items which we wanted and that the value of any item would be paid for out of our share granted by the will. Any remaining items would then be put up for auction and the value received added to the estate. These items had been removed from my aunt’s apartment by the appraisers. Again, despite requests by the heirs - no list of the assets has been provided.
The executor had been a family friend of my aunt, but in the last few years of her life she had been re-evaluating the friendship and was seeking to have him removed from her will (she bequeathed a valuable stamp collection as well as naming him a residuary heir and executor). He somehow managed to have her declared as mentally incompetent (the timing of which we believe he was aware she was trying to have him removed from the will and he manipulated the situation so that she would be declared incompetent) and she was unable to change her will.
We have been informed that the estate is now being submitted to probate and that due to the backlog in the Ontario Probate Courts that it will be a few months before an interim payment can be provided to the two heirs who are to receive the largest share. We have found that the executor and the estate attorney have been dishonest and non-communicative, except in a defamatory fashion, but we do not know what action, if any, we can take, or whether it is too late to do anything. Our hope is to not delay the process unnecessarily, but we really do want to protect my aunt’s legacy, the estate and our interests.
Lots of background to ask, if the residuary heirs can do anything to ensure that the executor and the estate attorney are being unbiased and are being proper in their handling of the estate or have we missed our window of opportunity?
I am the son, & Executor of my mother's estate - with 2 sisters. I have 2 sisters 1 agreeable and 1 not so. One sister will not sign the Statement of Proposed Distribution for an interim distribution - I can just leave her share in estate account but if she never agrees with what I have done & signs the consent - what then?
ReplyDeleteMy mother in law passed october 31, 2010. All 4 of her children, and 3 of her grandchildren, received their amounts from her estate approximately a year later. Now they have all received a letter askign for $3,300 of those funds to be returned, because the lawyer who handled the estate and/or the executor, miscalculated the amount of taxes that would have to be paid. The problem is, most of the family members no longer have any of those funds left. What are their legal responsibilities in this case, and if they should choose, or be unable to pay those funds, can they be taken to collections or otherwise harassed? Thank you for your time!
ReplyDeleteI answered this question in a new blog post on May 7, 2012.
DeleteLynne
My father passed away 2 months ago. My sister and I are the Executors of his estate.Previous to his death he sold his home and divided between 3 of his 5 children. My sister and I were part of this. I was my father's care giver and power of attorney on his bank account. Our two older brothers are stated in the will to receive x dollars which I had set up in a GIC for payment at my Dad's death. The will clearly states to pay his funeral services and debt. I personally paid the expenses for the funeral $4500.00. My sister will not sign at the bank for me to be reimbursed for these costs. She also raised a stint at the bank and they said it has to go to probate. I have given my sister copies of receipts and informed her of other outstanding bills. His long term care residence and his taxes are over due. She does not take my calls or return my calls. I just leave messages on her home phone. She has gotten one brother to sign a paper, he does not know what it is nor do I since she will not speak to me. I do not understand the behavior at all. Can she A) have me removed as executor and B) can she send the documents for Probate without my signature. I have no idea why she is acting this way
ReplyDeletehello there, my mother passed away in 1999 and since then her estate was distributed between my brother and i, of course a clearance certificate was issued by the CRA. her fathers estate was left to her before her death, and is only now available, the taxes were just done in her name, for the money received, and now we need to wait for another clearance cert. to be issued before the distribution. my question is, since there was already a clearance cert issued many years ago, will this one be necessary , and if so, will it take so long?
ReplyDeleteI have received a check marked estate share from the estate of my father by my sister who is executor. I am not sure the amount is correct. If I change this check does that mean I agreed that the amount is correct? The estate is not yet completely settled and the house is still to be sold.
ReplyDeleteMy sister is executrix of my mother's estate. The day my mother passed away, she removed all the valuables from the house and declared that she could 'do whatever she wants' which we know is not correct. It's evident she intends to keep those assets for herself, but the will is clear that all assets are to be divided equally. In the probate application, she declared the value of the personal assets at $1000, which is grossly underestimated. She provided no list of assets and refuses to at this point. She currently has the house on the market, and I'm concerned that she will mishandle that asset as well. What do you suggest?
ReplyDeleteHi
ReplyDeleteMy husband's grandmother passed away in October 2010. Her affairs were always handled by a lawyer and that same lawyer is now the executor of her estate. The will left all monies to my husband's Mom and Aunt and Uncle and if they had already passed which is the case, the monies were to be distributed to the siblings. Hubby's grandmother was a war bride from Belgium. She had clearly stated to us when she as alive that she had no relatives whatsoever in Belgium. The lawyer has a private detective looking for relatives in Belgium. How long does the lawyer have to keep searching for unknown relatives before she can settle the estate. Thanks in advance for the info.
Scenario:
ReplyDelete3 beneficiaries/siblings of parents' estate, one of whom is also the estate trustee. Holographic (hand written signed and dated) Codicil is found by 2 beneficiaries/siblings that was not probated with the will.
The codicil would have given the cottage to the 2 beneficiaries/siblings and not the ET.
When challenged, no explanation is given by the ET.
Question:
Can the 2 beneficiaries/siblings have the codicil probated or is the Estate Trustee the only one who can do this?
Thank You
My grandmother passed away Sept of 2010. The beneficiaries are her children or issues of any deceased children. The bulk of the estate was actually distributed 3 months later. There was about $40 000 left behind. My question is how long does it take to finalize her estate and should we get a notice as to how it was distributed. I'm wondering if I should approach the executor or just be patient. Great site by the way.
ReplyDeleteHi there,
DeleteYou didn't actually say whether you are a beneficiary of the estate, which you could be if your parent named in your grandmother's will predeceased her. This is important because if you are not a beneficiary of the estate, no, don't expect any information about what has happened with the estate. On the other hand, if you are a residuary beneficiary you should be given a full accounting of what's happened. You said that the bulk of the estate was distributed with some held back, which is certainly normal. However, normally the accounting of the estate goes to the beneficiaries at the same time as the bulk of the estate. Now, as a beneficiary, getting an accounting is not really the same as getting a notice, because you don't necessarily have to agree with what was done with the estate. To answer your question about the timing, it sounds as if the executor is waiting for a tax clearance certificate from CRA, which could take many months. If you are a residuary beneficiary you have every right to approach the executor and ask for information and a timeline.
Lynne
You must get so many questions!
ReplyDeleteMy question is about interim distribution of funds. My spouse was recently named as co-Executor of her great-Aunt's will. The other 2 Executors live in Ontario (where her Aunt lived/died). The will specifies a $10,000 fee to each of the Executors. We are wondering whether her travel expenses to conduct Executor duties would come out of the $10K fee, or out of the Estate? The co-executors say that it is our personal expense. We are fine with that, but in that case need to get an advance on that fee as we don't have the funds to travel to Ontario, or hire a local notary/lawyer, etc.
Are the rules around interim distribution of funds the same for the Executor fees or are they a different category compeltely?
THANKS!
Hi there,
DeleteAs a general rule, expenses such as travel are paid to an executor over and above the executor's fee. The fee is meant to be payment for taking on the work, risk and responsibility of the estate, not for the covering of costs. Note though that any general rule can be over-ridden by specific instructions in a will. Make sure you are clear on what the will says. The specific wording becomes very important at times like this. If the fee is specified without anything else being said, you can assume that expenses are to be paid IN ADDITION TO the fee. As for taking some of your fee in advance, that is perfectly acceptable. The beneficiaries don't have to agree to an advance up to $10,000 as that amount was set out in the will. You will need the agreement of your fellow executors of course. An advance like that can be made at any time.
Lynne
Dear Lynne,
ReplyDeleteI am a beneficiary in my friend's will who passed away in December 2011. The total assets are RRSP 107,113.60, LIRA 62,523.23, RRSP 3,479.32. Total
173,116.15.
I am the beneficiary of the small RRSP of 3,479.32.
The Executer of the will (my friends brother)told me to send a letter to CIBC instructing them to send 1,217.76 (35% for tax purposes) to my friends estate and send me a cheque with the rest, 2,262.56. I feel not comfortable to sign that letter. The executer of the will refused to go through a
probate to avoid the fees. I think 35 % taxes on such a small amount is too high.
I hope you can help me.
You should be receiving the full $3,479.32. Yes there is tax to be paid, but that's payable by the estate, not by you. This is the general rule, which will be in place unless the will specifically says that tax is to be paid by the beneficiary who receives the asset. Having that kind of clause is pretty rare, and unless it's there, I'm not sure why they are trying to get you to pay the tax. No doubt it's because they aren't using a lawyer so nobody has told the executor how this works. A lot of people mistakenly think that tax is payable by the person receiving a specific asset. This is not dependent on probate. It makes no difference if the will is probated or not. As you are the beneficiary of the RRSP, you can deal directly with the CIBC and leave the executor out of it. It might be worth your while to chat with a wills lawyer in your area if you are still wondering what to do. Hope this helps.
DeleteLynne
Thanks for your help Lynne and your quick answer to our question!
ReplyDeleteMy parents died 10 years ago. We were to split the property equally amongst 4 of us siblings. My older brother and sister were assigned executors. I have lost patience waiting for them to give me my share.
ReplyDeleteMy brother has all the silver in his basement and refuses to discuss any dispersal however I do have a list of what is there.
My sister has all the jewelry and I have not seen it nor do I have a list of it. There was a robbery at her house and only a jewellry box with some of it was stolen. She says she doesn't know what was stolen. She won't talk about this because it upsets her too much. The remaining is in a safety deposit box. Every now and then she goes out wearing this stuff. All this is upsetting and frustrating to say the least.
I have tried to be nice and patient but I feel there may be some kind of control thing going on that I am not prepared to deal with. How can I finally get my portion and see an end to the process?
How about this: My husbands sisters are the executors and are denying a bill payment to the government for taxes because they "don't have the money" and there is non in the estate. Will this effect David or just themselves? How will it effect them?
ReplyDeleteLynne,
DeleteI have a similar situation except I'm the one who's not paying the taxes! It's a slightly complicated situation. Do you think I might need to hire an estate lawyer?
-Jake
Hi,
ReplyDeleteI'm assuming that David is your husband, and that he is a beneficiary of the estate you're talking about. This situation will affect him in that if there is no money in the estate, he is not going to inherit anything. He isn't going to be liable for the tax bill, if that is what you're worried about.
The sisters may well be affected differently. This will depend on whether or not they have paid anything to the beneficiarie, to themselves, or to other creditors. If they have, they will likely find that the government will pursue them personally for the tax bill.
Lynne
Hi Lynne,
ReplyDeleteThank you for answering a former question. Your answer was very helpful. I have another.
My husband's aunt's will was contested legally by his family, and when it recently went to mediation here in Canada, the mediator assigned certain amounts to all parties in the case. He also reassigned as a new executor a large Canadian Bank. My husband's father seems to think it is taking an incredibly long time for the bank to distribute funds from the estate. We feel the bank is delaying because while the monies are in its trust, it can loan them out and make interest on them. My father-in-law has tried to contact the bank several times and its reps refuse to communicate with him. He was the former executor and knows what is at stake and had begun to settle accounts before the legal case began. My question is this. How long does the Bank have to distribute funds, once a mediator has assigned an estate to it for this process? What would a normal time be, considering estate taxes have already been paid?
Thank you very much.
Hi there,
DeleteSorry to hear that the estate has been such a challenge, but perhaps the worst is past now.
Generally professional executors (trust companies, often owned by banks) are the most efficient due to the fact that they have so much experience in estate matters. My guess is that they are waiting for the tax clearance certificate, and this is what's causing the delay. On an estate that wasn't contentious, they might well do an interim distribution, as they almost always do, but perhaps they are trying to avoid any actions that would involve gathering permission or agreement of beneficiaries who have proven themselves to be in different camps.
In terms of the bank benefitting by delaying, I can only add that they won't get paid for their work until the job is finished, so that would seem a greater incentive to me to complete the work rather than drag it out. A trust company business is not investments; it's administering estates.
I'm not at all surprised that nobody will give information to your father-in-law. An executor only has to give information to residuary beneficiaries of the estate, not to former executors. I wouldn't tell him anything either, unless he was also a residuary beneficiary.
I hope this reply will give some added perspective, though I fully understand how preoccupying an estate can be. Hope it's wound up soon.
Lynne
Hi Lynne - I need some help regarding my Aunt and Uncles estate. They both passed away around the same time in 2004. There are 14 beneficiaries, I am one of them. The estate was quite large, but it is still not completley resolved- does this make any sense to you? One of the executors is also the lawyer for the estate, and trying to get any information from his is like pulling teeth. He does not return phone calls or emails and it has been a year since our last distribution and we have heard nothing from him. I emailed him the end of June and no response. There was still money left in as a holdback. He told us last year that there is a portion of my aunts estate that still hasnt been dealt with completley but no one seems to know what or why. I dont know what it would be that takes 8 years to resolve?So is there anything we can do to light a fire under him? Are we being unreasonable in expecting information from him and wanting the estate to be finished? Thanks so much!!
ReplyDeleteI am the executor of my mother's estate in Manitoba. My sister in Australia and I are equal beneficiaries. She has begun to play games regarding personal effects which she had gone through at the time of death and took back with her what she wanted and declined the rest--signing an agreement she had what she wanted and then months later demanding the declined clothes after she knew they had been given to charities.A polite reponse(after consulting the lawyer) as to her rights in the situation and other communications regarding the estate are not being answered. We expect she is waiting to either 1) lodge a challenge when the accounting is provided and signoff needed for interim distribution, or 2) Spitefully ignore it when mailed and not respond as she did in the case of another estate some years ago. She has also been in a fight with her mother in law's executor. In the first case the estate lawyer has advised me she would need to challenge through the Manitoba courts at her own expense. So my question is how to handle the #2 problem if it arises. Is legal action needed. One more question from reading another post here is does the CRA need her Australian SIN?
ReplyDeleteThanks again for your valuable and informative website, Lynne!
ReplyDeleteI understand the concept of the 'executor's year'.
In our case, the sole executor on my grandfather's estate will be out of country for the 3 months before, and the 3 months after, the one-year anniversary of my grandfather's passing.
Can our lawyer apply to force grant of probate before the expiry of the executor's year given the circumstances?
Thanks in advance
Just a quick question. I was wondering how long does it take for a clearance certificate to be issued if filed electronically and that it has been shown on the assessment that there are outstanding taxes owed by the estate?
ReplyDeleteMy sister and I are co executors of Dad's Will. We have been working for several weeks together on Will search, banking, and preparing for Probate. Suddenly, she wants to contest the Will. Is it too late for her to resign being executor, (nothing has gone to Probate yet) or can she still resign and contest the Will. By the way, she is getting 16% more than I am anyways.
ReplyDeleteCan a Will be contested if a partial distribution has already been paid out?
ReplyDeleteThanks
Hi my Dad passed away and my husband is the executer. We are wondering if there is a way to find out if he has accounts or investments that we are not aware of. We know of the bank he dealt with and his life insurance but he did not have good records and did not talk a lot about it. Any ideas of where to start?
ReplyDeleteI reside in my fathers house and have for the past 10 years. Now that my fathers has passed one of my siblings wishes to purchase the house, take control of the situation and throw me out. Can my sibling do this or do we need a tax clearance certificate prior to selling the house?
ReplyDeleteHi,
DeleteIt sounds as if your father didn't leave a will. If he had left one, it would direct who should take control and what is to happen with the assets.
If he didn't leave a will, someone is going to have to take control, but it isn't simply a matter of wanting to do that. It has to be done through the court as someone has to apply to be appointed as the estate administrator.
If nobody is appointed by the court, nobody can change the title to your father's house. Once someone has legal authority to change the title, yes they can throw you out.
The house has to be sold or transferred before the tax clearance certificate is received. The certificate says that no more tax is payable, so it can't be obtained until the major assets of an estate, such as a house, are dealt with. So don't count on that to buy you time.
Lynne
my common law partner son of our now 2 1/2 year old son passed away may 2011, i just received his income tax return from the government of canada written- to the estate of the late-------. He was 27 didnt have a will im very close with his parents still and they will try to help me cash this cheque. can i just take it to the bank with death certificate? i have acted as heir, receive CPP for me and my son, had his lat owed EI payed to me none of these with a problem
ReplyDeleteHi Lynne,
ReplyDeleteMy father passed away 4 years ago. My brother and I are both executors. Before my father died he gave me some $ for helping my parents when they were ill. My brother has a problem with this and feels he is receiving too little and therefore will not sign his part of the estate and the funds cannot be distributed between us. Taxes have all been paid etc.
Is there anything that can be done about this?
thanks very much
Hi Lynne ,
ReplyDeleteMy Father passed away almost a year ago , my brother & I are executors , there are five siblings total . My father wanted the youngest brother that lived with him to have the house when he passed, he even put his name on the Deed after my Mother passed , two of the siblings claim this is what my Father wanted , the other two don't think its fair , they feel he should have to pay for the house . It was not written in the will that he receive the house , people in the community also knew that was my Fathers wishes, aside from that it is holding things up with moving forward on the will. My question is if one executor is procrastinating can the other executor somehow overrule the aforementioned executor to move forward.
Hi Lynne,
ReplyDeleteMy Dad passed away 3 years ago and I am the executor. In addition to cash which I have distributed to the six beneficiaries, of which I am one, he also left us a cottage that we all agreed to keep in the family. Now, there are several in the family who would like to be bought out, so I have offered to buy all the other five out and we have all agreed on a price. The property is registered in my name, as executor but I don't know how to proceed with this so that ever thing is done in a legal manner. What needs to be done in this case?
I HAVE a similar PROBLEM. I have two brothers. One, the executor. Against my knowledge or wishes, they sold her primary residence, and since the balance of the estate ws to be split between us 3-they unknowing to my put the family cabin'S title IN ALL OUR NAMES, without my consent or agreement. Making me 1/3 repsponsible for the taxes, and I pay All the insurance.
DeleteI have just requested (Mom died in 2006 and received an accounting of the estate. The executing lawyer sent me a cover letter stating to the best of his knowledge the executor had distributed the possessions and artifacts. That the TITLE to the family cabin had been transferred to the THREE of us siblings(I AM TOTALLY against this ass it puts the estate in arrears as a result of capital gains. And He haS REMOVED HIS $9000 PAYMENT FOR FINE SERVICES RENDERED. He attached the final release which he demanded I sign to release him and/or the executor from any further recourse.Can they put my name on a property title I do not want and advices against. (The one brother lives in Ontario, and so shows once a summer for a whole month without doing ANY maintenance or upkeep. I HAVE to do all the upkeep repairs since he lives in another province. The executor/my other sibling says "What do you care you can't go there". My point exactly-made by him.(PS the ONLY accounting f the estate from the lawyer was the 'PROBATE FINISHED." tHE 500 page standard mortgage papers from the selling of her principal estate, and a release I HAVE NOT SIGNED since I agree not only with the keeping of the family cabin(Icannot use it for recrestion yet must work the upkeep and keeping it it put the estate in arrears(values at $250,000). The wayer also mad sure he removed his fee - before receiving the final release from te beneficiaries. Also, if as my brothers states he'll just take the excess as executors fees, do I get paid for all the painting and repairs I took two months of time off to complete? How do I get to mediation without tearing the last of my family apart. The (Older)brother who is not the executor but bullies all the shots lives in another province. How can HE BE THE DECIODING FACTOR ON A CABIN HE SEES FR ONLY 3 WEEKS A YEAR??
Hi Lynne
ReplyDeleteThis is a great site!
Please can you explain how to proceed with an interim distribution when one of four residual beneficiaries refuses to communicate with the other three. Our father passed away last December and we are awaiting the tax clearance form. What recourse do we have if our sister refuses to communicate with us? Would appreciate any opinion you could give.
Thanks,
Jane
Hi Lynne!
ReplyDeleteWhat an informative site! My mother has named me the executor of her estate for when the time comes. My siblings and I live in the States and my mother lives in Canada. Her estate is quite significant (> $1mil) which includes many RRIFs. Someone told me that the Canadian government will take 50% off the top of the estate before distributing to beneficiaries. Is this true?
Thank you!
Nope, not true. What I think the person meant is that a RRIF is taxed when the owner dies because it's made up of before-tax dollars. But they don't take anything "off the top". The amount of the RRIF will be added to your mom's income (or the estate income) in the year she passes away, and she will be able to use deductions and exemptions to reduce that income just as she does now. The tax on the RRIF can end up being pretty high, sometimes as high as 40% but that depends on many variables and most of the time it's lower than that. Some items in the estate, such as her house if she has one, don't get taxed at all. Make sure you use a good accountant to do the tax returns when the time comes - they are worth their weight in gold!
DeleteLynne
My parents passed away leaving my sister & I as co-executors. My sister has passed away & her son as well. My sister having no will leaves her daughter as the sole beneficiary (she sued & became trustee of her mothers estate). My question. I am finalizing everything & now have to distribute the funds. Do I write a cheque to "The estate of so & so (my sisters estate account) or to her daughter (my niece) directly?
ReplyDeleteHello Lynne, What an informative site, thank you ! My Dad died May 2011, and left myself and his lawyer, who is also the estate lawyer, as co-executors. I am sole beneficiary. Dad had a RIFF, $81,000 when he died. I asked the lawyer to collapse the RIFF before years end so that I could declare it when I filed his return, which he did not do, not until May 2012. He does not communicate with me and I was unaware that I needed to declare this RIFF as it had not been collapsed in 2011 and no one advised otherwise.. I had to file an amended return and have to pay $36,000. in taxes which I had expected. Problem is this, I sold my dads' home and though there is $90,000 in a bank account that the lawyer is aware of, he will not release those funds from the house sale. I figure it is his fault the RIFF was not collapsed and that he should have to pay the interest on it( almost $1400.). He also, after several requests will not supply me with a statement of his account to date (fees) and I am tired of asking and being ignored. I am the sole beneficiary and the Will did not need to be probated. I know he needs to wait for the Tax Clearance Certificate but I am angry I have no idea as to his fees. Is he, as co-executor not accountable to me for decisions he makes and to provide me with an ongoing accounting. I know he is entitled to 5% of the estate as co-executor but am just angry about the lack of communication. I asked a lawyer in my homwtown to advise me and he sent a letter to the estate lawyer RE: Fees and it was also ignored. Just tired of it all.Thank you for any help you can provide.
ReplyDeleteHi Lynne,
ReplyDeleteJust a quick question, my brother and I are both Executors of my late Moms estate. Do both of us need to sign for access to her bank accounts, investments, etc.?
Thanks!
An even quicker answer - yes, you both need to sign.
DeleteLynne
Hello Lynne,
ReplyDeleteIf I receive an inheritance from oversees, can this be counted as a gift or do I have to pay hefty taxes on the amount ? How do I handle this the correct way? Thank you in advance.
Hi
ReplyDeleteAs executor of my dad's estate, do I need to get a tax clearance certificate before i clear up and distribute my Dad's estate?
I had Power of Attorny since 2005 and have manage my father's affairs. All of his debts are paid except his final tax return which I know he'll get a refund
You're not required by law to get a tax clearance certificate. Most executors want the certificate because it's proof that there are no taxes outstanding and that distributing the estate money won't result in the executor having to come up with tax money personally. But I can see your point about having acted on the POA for 6 or 7 years. You obviously feel that your level of familiarity with your father's finances reduces your risk that anything is going to come out of the woodwork and surprise you. You can decide whether or not there is enough risk there to make a clearance certificate a good idea.
DeleteLynne
When sending a bank wire inheritance to another state institution, what are the legal issues involved if the money is taken by someone else posing as the beneficiary.
ReplyDeleteHi Lynne! Thank you for all your info, I posted above regarding my Dads' estate and the lawyer as co-executor but I am concerned that I have never in almost 2 years been given a statement of fees and I understand he is obligated to give me an interim one? I have no idea what his fees may be and he hasn't had to perform many tasks to date either.He does not communicate with me, lives in another province and I have been advised by a lawyer where I live that I should file a complaint with the Law Society. He is also co-executor so will be receiving 5%? Is this true and on an estate valued at approx. $300,000., what would he receive? Thank you Lynne and all the best in 2013.
ReplyDeleteHello, Executor
ReplyDeleteI would like to know information about at the time death of my father 2009 all four children were alive. In 2011 my late brother passes away, we still have money in my father's estate bank account to be distributed to benefiicaries. I held back distribution to my brother because of tax concerns. I made disclosures on the clearnance certificate how this money is going to be distributed.
Now, the other executor is asking to divide the remaining money's three ways.
The clearance certificate has been received, how does this money get divided amoung the remaining beneficaries?
Executor
does an executor automatically get 20 % or only if its stated in a will?
ReplyDeleteNo an executor certainly doesn't automatically get 20% of an estate. In Canada the range is up to 5%. If the will says 20% then the executor can charge that much, but that's very high compared to the going rate.
DeleteLynne
Our Mother died in April 2011 and we hired TD Waterhouse to wrap up the Estate for us. It is now almost 2 years later and they are still withholding 45k. TD says that CRA still hasn't hasn't approved the terminal tax even though it was submitted last summer. They say this often happens - Is that usual - is there something amiss going on? I have heard of the executors year, never 2 years???
ReplyDeleteUnfortunately, it does take forever to get CRA clearance. I am often asked the question you asked - whether something is amiss - because it takes so darn long. There isn't anything you can do to speed it up either.
DeleteLynne
hello... My mother passed away last year leaving my sister as the executor of her will... The will states that the insurance policy was to be split bewteen me and my sister after funeral costs nd the balance of the estate was to distributed at the the discression of the executor. My sister refuses me any information and has basically kept everything. Is this legal and what recorse do I have?
ReplyDeleteAre you saying that someone actually signed a will giving the executor full discretion to distribute the estate??? I sincerely hope that no lawyer prepared that will.
DeleteGiving an executor full discretion like that is basically giving everything to her for herself and saying "share it if you want to, but you don't have to".
Have you seen the will? Are you sure that the insurance policy was specifically mentioned as you believe it to be? If it's just part of the estate, then with the discretion you mentioned, your sister would be within her rights to just keep it. That's assuming she has seen a lawyer and knows for sure that she has this full discretion she says she has.
If you have a copy of the will, I urge you to take it to an experienced wills lawyer for an interpretation and a discussion of your position. If the will was prepared without a lawyer and your sister isn't using a lawyer, then you are all trying to navigate the legal system without a compass.
Lynne
Hi,
ReplyDeleteCan you direct me to a downloadable pdf or doc for a interim distribution? I have docs from a paid for book, which doesn't include this... and I can't find one anywhere on the internet.
Thanks so much.
Hi. I don't know of any downloadable documents for an interim distribution. I have included a full set of precedents/samples for this in my book called Alberta Probate Kit. Although the book is mainly about Alberta, obviously, the forms for interim distribution can be used anywhere in Canada.
DeleteLynne
My father is the executor of my aunts estate he promised me the 5% fee if I helped him with the estate I have done all the work except for signing documents now he refuses to give me the % what can I do?
ReplyDeleteIf the money hasn't yet been paid out of the estate, you might think about filing a caveat against the estate. If that isn't an option, your only recourse might be small claims court against your father personally.
DeleteLynne
Hi Lynne: Thank you so much for providing such an informative site! I have several questions for you. First, some background. My mother passed away June 2010 leaving everything to pass onto my father. No clearance certificate was ever applied for or issued. In October 2012 my father passed away. My siblings and I were named executors but they renounced their rights as trustees so I am sole executor of the estate. Probate was applied for in Ontario and issued in February 2013. Here are my questions:
ReplyDelete1. Do I need to go back and apply for a clearance certificate for my mother?
2. Are there specific forms that need to be issued and signed when beneficiaries are paid out and where might I find them? (Background, my one brother is an alcoholic with no money who has been pushing for his share since day 1 and I want to ensure after payment he does come back to say he has not received his share.)
3. Because my dad's house will just be going up on the market and likely selling this spring (hot Toronto market) do I need to wait until after it sells and then submit income taxes for the 2013 year, as well as the 2012 year, or can assets be distributed after the house sale with some funds held back for 2013 taxes (based on a tax accountants calculations)?
4. Is there anything else I should be aware of at this point?
Many thanks! Teresa
Hi Teresa,
DeleteSince you were not the executor of your mother's estate, no you should not be applying for a clearance certificate.
The only published set of forms for an executor's accounting that I know of is the set I included in my Alberta Probate Kit. They apply to all provinces. This is why I wrote the book; resources can be hard to find.
When you say "submit income taxes", I'm reading that as not actually submitting taxes but submitting tax returns, as that seems to make the most sense. I'm no accountant, but it seems to me that you should file the 2012 tax return on time, regardless of what's happening with the house. And yes, in most cases an executor can do an interim distribution of the bulk of the estate, holding back enough for taxes. Whether or not you in particular can do this, I couldn't say for sure because I know only a few facts about the estate.
Is there anything else you should be aware of? Hmm... I'm going to say "yes", even though I have no idea of what you're aware of :)
Lynne
Hi Lynne,
ReplyDeleteThis might be a very basic question, but if my mother wishes to change the executor named in her will, does she have to do so using the same lawyer that drew up the original will?
Our family would prefer not to use the original lawyer, as she was referred to my mother by the person serving as the executor - we would like to have the change handled as independently as possible.
I assume that when you say "our family" would prefer to use another lawyer, you mean that your mother would prefer it. It's her choice.
DeleteAnd she can use any lawyer; it doesn't have to be the same one. However, changing an executor can be done two ways. Either it can be a whole new will, or it can be a codicil (amendment) to the will. Many lawyers don't like doing codicils to wills they didn't draw up because they can't ensure the original will is valid.
Lynne
Hi Lynne,
ReplyDeleteMy father passed away 5 years ago. My sibling and I are both executors. Before my father died he gave me some money for helping my parents when they were ill. My brother has a problem with this and feels he is receiving too little and therefore will not sign his part of the estate and the remaining funds cannot be distributed between us. The will has been probated, taxes paid etc.
Is there anything that can be done about this?
thanks very much
Hi Lynne,
ReplyDeleteCan you please tell me why the estate lawyer and co-executor with me for my dads' estate will not release funds from the sale of my dads' home until he receives the Tax Clearance Certificate? I paid all taxes owing last year and received a notice from CRA stating balance owing as zero. I am the sole beneficiary, dad died May, 2011, and the lawyer has not assisted me in anything. I have only now found out he has not even applied for the certificate. He also in almost 2 years now has never issued me an interim statement of fees despite my constantly requesting one. Can I not have the funds released with him in receipt of that notice from CRA? It is the only asset in the estate. Thank you for all your help Lynne!
will has been written according to wishes of aunt. Will has not be signed yet but named executor and main benficiery feels he should get more so took will away and we do not know why.We have a copy but if will is not signe and witnessed son problems and disputes will escalate.Any advise?
ReplyDeleteHi. If I understand the situation, the will was done in draft and shown to the executor, but was not signed by your aunt. If the will hasn't been signed, then it isn't valid. She can make and sign a new one. And obviously she needs to name a different executor. Thankfully she found out in time that this idiot cares only about himself and would be the worst choice for executor (and possibly beneficiary for that matter).
DeleteLynne
Great site Lynne! Here's a tricky one that my cousin is dealing with right now:
ReplyDeleteMy aunt passed away recently and she is on the title of a house with my other aunt. The title is "tenants in common". My deceased aunt (Aunt #1) actually rented an apartment for the past six years while my other aunt (Aunt #2) lived in the house with my uncle. Aunt #1's spouse passed away some years ago so my cousin has applied to be the estate administrator of Aunt #1. When she passed away, Aunt #1 only had about $4000 in her bank account and no other assets. My question are:
(1) When my cousin tries to remove Aunt #1's name off of the house title, what taxes will there be?
(2) If the taxes are more than $4000, will my cousin be responsible in paying them?
(3) Since Aunt #1 did not buy another property in her life, can we treat the house as a "primary residence" and thus avoid any capital gains since she had been renting elsewhere?
Thanks in advance
My father died a month ago. Executors are my brother and sister. They refuse to provide any information on anything. they also have not provided documentation. I want to know the balances in the bank, they won't email, text, or phone responses to me. As a beneficiary am I entitled to know these balances.
ReplyDeleteLynne
ReplyDeleteMy brother and sister are executor of my fathers will they are in BC and he died in BC.
They won't speak to anyone, so they tell us to speak to the lawyer, which is racking up costs.
who has to pay for us to get information from the lawyer, my sister and brother, or the estate. they are being paid 5% of the Estate to do this work, are they required to communicate with us?
In my opinion, the payment for the lawyer's fees for this should come out of their 5%. Any time the executors ask the lawyer to do things that are clearly the executor's job - as in actually speaking to the people involved in the estate - the executor's fee should be reduced accordingly.
DeleteLynne
My brother is Executor of my fathers Estate in BC, he declared bankruptcy can he be removed as Executor in this case?
ReplyDeleteBankruptcy was in 2000.
If your brother has been discharged from bankruptcy, he can act as executor.
DeleteLynne
My sister has lived on Disability for years for a brain injury in BC. She is Executor of my fathers Will. Because she has a brain injury and it's documented, can I get her removed from being Executor of this Will. How difficult is that to do?
ReplyDeleteMy first question is whether your father is alive. If he is alive, this is not something you have any right to deal with. Only your father can change his choice of executor.
DeleteIf your father has passed away, then your sister must be acting as the executor. You haven't said she is doing a bad job of it, only that she has sustained a brain injury. That fact alone doesn't disqualify her from acting as executor. She could have a hundred brain injuries and all would be irrelevant unless she was incapable of handling the job.
Lynne
Hi my mum passed away in 4 months ago. Her will was sent back from a solicitor who no longer practices. She named in her will her 3 children to split equally her home and funds equally. My sisters have mums money in a bank account in their name after transferring it across into their bank over the past three years. They have written to me saying that they want to split the money and house proceeds between themselves and not give any to me! As the money is now in their name will they be able to do this? What shall I do
ReplyDeleteThis doesn't sit well with me, any more than it does with you. Who is the executor of the estate? That person has a duty to follow the will or be sued.
DeleteI'd be interested to know how your sisters were able to transfer your mother's account to their names. Were they acting under a power of attorney? If so, putting the account into their own names would amount to a crime called Theft by Attorney.
If they did not act under a power of attorney but simply convinced your mother to put their names on the account, this is a case of elder abuse.
I think you should hire a lawyer to make sure you get your one-third and that your mother's will is followed. If cost is an issue, you might be able to find a lawyer who will work on a contingency basis.
Lynne
Hello, this question may not fall into your area of expertise, but I am at a loss as to whom I should approach it to and you appear to be very helpful with others. I apologize if I seem cold, but there is history to my actions. My father is suffering from Alzheimer's and is pretty much at the end of his time. We never had a relationship but when my brother last visited him prior to his decline, he told my brother that he had put stocks and other things in our names to ensure that he would leave us with something to amend his lack of being a parent. I don't know if this is true or not and I'm not even remotely close with his family. Is there anyway to find out if this is true (I feel that the family wouldn't even try to contact us/look for us, in the event of even my dad's passing. Any guidance that you could provide would be greatly appreciated. Thank you
ReplyDeleteI am the executor of an estate. The gentleman passed away in May of 2011. All of his investments had named beneficiaries and the money was disbursed by the investment company shortly after his death. Funds did not go through his estate. He had no other assets other than a bank account of less than $10,000. The investment firm disbursed funds to the 14 beneficiaries some in Canada, US & the UK (totaling approx. $800,000). As executor, I had no control over the disbusement of these funds and could not withhold anything for payment of CRA taxes. However, there is CRA tax owing re: capital gain and the payout of a RIF to several named beneficiaries. As per the filing of his 2011 tax return, the total owing to CRA is $15,000. Funds left in his estate were not sufficient to pay all tax owing. An Accountant has submitted all required documentation and all remaining funds from the bank account (approx. $8,000) however, taxes obviously are not paid in full. Estate was considered insolvent at time of filing and this was indicated in our subsequent request for clearance certificate. Will CRA even consider granting a tax clearance certificate? Or, in your experience what might transpire next? I had no legal recourse to obtain funds from beneficiaries as funds did not go through the estate and many are out of the country. However, CRA tax is still outstanding. The request for a tax clearance certificate was filed in the Fall of 2012, and I am aware it takes months to hear from CRA. But I am concerned re: any liability on my part as executor. Just wondering if you might have any idea as to what I might expect from CRA on this?
ReplyDeleteYou don't have to worry about liability as an executor if you have carried out your responsibilities properly, and from what you've said here, it appears that you have done so.
DeleteIt's standard practice for funds with named beneficiaries to be paid out in full to them as happened in this case. You would not have been able to hold back any of it because none of it was part of the estate.
I know it seems odd to people sometimes, but the tax on RRIFs are not paid out of the RRIFs. The tax is paid from the general residue of the estate. Most people don't understand that rule. In this case there isn't enough to pay the tax, but that's not your fault.
CRA can't and won't try to make you pay the tax personally, if that's what you're worried about.
CRA may choose to pursue beneficiaries for unpaid taxes in some circumstances but that is rare.
Lynne
Lynne
Good morning - a friend of mine is an executor for an estate and has one brother, who is also mentioned in the will. Someone told her that if her brother owes income taxes to CRA and she gives him his portion of the residue, that she can be held liable for his income taxes. Is this true?
ReplyDeleteAn executor is not responsible for checking that beneficiaries have paid their bills before distributing an estate. Has the executor been served with any kind of notice of garnishment or demand? If the brother is in bankruptcy, that is another story. In that case, the executor must pay the inheritance to the bankruptcy trustee.
DeleteLynne
Hi Lynne,
ReplyDeleteVery informative site.
My wife's grandmother passed away leaving her estate to her 5 children, with one of them being named executor.
The primary home that was part of the estate was recently sold and upon closing, the funds from the sale were deposited into the executor's spouse's account. This was apparently due to the executor not having a bank account of their own and apparently not being able to open one because they are not a Canadian citizen and have no photo ID.
My question is, shouldn't the funds have been deposited into a trust account that the executor has some measure of direct control over so that disbursements to the beneficiaries, debt, taxes, etc., could be properly accounted for? Some of the heirs are concerned that the monies are now residing in a bank account of someone who is not an heir according to the will. Some of the siblings are concerned that the executor no longer has control of the funds that should be disbursed equally among the five siblings as per the will.
The executor hired an estate lawyer to work on the estate and I would have expected that the proceeds from the sale of the home would have ended up held in trust by them given the circumstance of the executor not having a bank account of their own.
My wife and I have no personal stake in the estate, however her father is one of the five siblings and both he and other siblings are concerned about this recent development.
I would also be concerned about this. This is absolutely the wrong thing for the executor to do. It seems ridiculous that the court would let someone gain access to all of the assets of an estate but then a bank wouldn't let them open an executor's account. There's a definite gap in our system.
DeleteThe estate funds MUST be kept separate from personal funds. Otherwise there are risk factors such as loss, theft, garnishment or lawsuits against the person that could affect the estate. There are also administrative problems such as determining the income of the estate for tax preparation purposes.
I agree that using the lawyer's trust account would be a solution. The lawyer would charge extra for this, as it's an executor's job to look after the money, but it's still a much better alternative than putting it into a personal account.
Lynne
My grandmother recently left me her house that I grew up in. I had been told since I was a child that he would inherit the home, however the executive of the estate (my aunt), was rather surprised and upset by this. She is, however, one of three beneficiaries of my grandmother's bank account which contains about $10,000; she had no debts when she passed away.
ReplyDeleteMy aunt told me that I could move in so I had assumed that all of the paper work was near completion (and as young adult fresh out of university, I haven't really dealt with anything like this before and didn't have a clue of what it would entail). After about 2 months I have pumped about $6000 into fixing up the house.
Now that everything is cleaned and fixed, my aunt is exclaiming that she would like for me to move out. She said she would like to rent the house to strangers and put the rent money back into the estate, of which she says that she will be entitled to a portion. I'm afraid that my aunt is holding up transferring the house to me because she is trying to expand the amount she is to receive.
As well, she has had a contract drawn up that she wants me to sign that says once the house is under my name I will not have renters or parties, and that I will keep the house maintained. I'm fairly confident that none of this is in my grandmother's will as she had told me many times before she passed to rent out two of the rooms in the house to help pay off my student loans. My aunt has said that if I do not sign the contract, she will sell the house outright, put the money from the sale into my grandmother's bank account, and split it amongst herself and my uncles. Is this legal? Do I have any rights at all in this at all? I kind of get the feeling that she is capitalizing on my naivety because I don't really understand this process yet. I'm not really sure where to turn, as she gets extremely upset when I ask her questions or ask to see the will.
You need a copy of the will. It sounds as if this executor is trying to take advantage of you. I would suggest that you don't sign anything she provides to you until you have taken a copy of the will to a lawyer to find out exactly what your rights are.
DeleteIf the will leaves the house to you, the executor does not have the choice to keep it forever and rent it to tenants. Even in wills where the executor is specifically empowered to take his or her time in distributing the estate, the delay must be reasonable.
Also, check the will to see what it says about the contents of the house, which may or may not belong to you now too.
If she gets upset when you want to see the will, tell her straight up that you're not signing a damn thing until you have all the facts.
Lynne
Hello Lynn,
ReplyDeleteI have a question for you regarding my father's passing. I have a stepparent, my parents never mentioned a will nor has it been brought out if there was one from the day of my father's passing. I have figured that she would have been the executor of the possible will but would never know as since my father's passing she has left me out of her life and all the arrangements following my father's death. This woman raised me so she is not someone new to the family as she was close to my father growing up as well. She has since moved away without even leaving a forwarding address. My question is am I entitled legally to a certain percentage of my father's estate within the Ontario Canadian standards. I was told 33% of the estate?
Thank you for your response.
Jayson
Hi Jayson,
DeleteIf there was a will, you are only entitled to what the will leaves to you.
Keep in mind that your father's estate only includes assets that he held in his name alone. If, for example, he and his wife owned there home as joint owners, as the vast majority of married couples do, then the house is hers by right of survivorship. If he had an RRSP or RRIF, he most likely named her as the beneficiary. If they had a joint account, that would be hers by right of survivorship too. What I'm saying is there might not have been much at all to even be included in a will. This is common with married couples.
If there was no will, you would be entitled to a share of the estate under Ontario's intestacy laws. I don't know of the "Ontario Canadian Standards".
Again, your share would only be a share of whatever your father held in his name only.
Lynne
I am the Executor for my fathers Estate and the two beneficiaries to the will are my sister and I. All of my fathers debts have been paid and his income tax was current to the end of 2012. He passed on Easter Sunday of this year and his sole income was CPP and OAS. I filed the return today for 2013 and obviously he does not owe anything for 2013 given it was only three months of income. I have two questions relative to the estate.
ReplyDelete1. If his previous years income tax shows no balance owing, should I phone CRA and confirm there is no outstanding balances to the end of 2012 as a double check? Or assume the returns reflect correctly?
2, Since I know all his debts are paid and he will owe nothing to CRA is there a reason to hold back more than say 2-3000 of the estate for the unexpected. Estate is roughly 100,000.
I look forward to your reply and your site rocks!!
You can phone CRA if you want to, but if you are worried about proof that all taxes are paid, you will have to apply for a tax clearance certificate from them. Not every executor applies for one; it's up to you to assess whether there is any risk in not getting one.
DeleteYou seem to be on top of things and you are looking at exactly the right things.
When you decide how much to hold back, take into account any taxes or bills of the estate, but don't forget to include any final amounts you'll have to pay to an accountant or lawyer who is taking care of the final documents.
Lynne
I am the executor of my mother's estate and in her will, she directed that some funds be given to her grandchildren once they reach the age of 25. Although none are minors, some have a number of years to wait before they receive the funds. If trust accounts are set up, how is the interest earned taxed? Do I, as the executor, need to complete estate tax returns each year until the last grandchild turns 25 and all the trust accounts are closed?
ReplyDeleteHello,
ReplyDeleteAs a beneficiary I have a few questions. My Father passed away in January 2012. Taxes have been filed and taken care of. My question is, if taxes have been paid and debts repayments caught up how long does it take to finalize an estate? How long do people have to claim payment of a debt after someone passes away? After we get the tax clearance certificate will everything be completed and the remainder of the estate can be completely paid out tithe beneficiaries? What do you recommend for a beneficiary if they feel they have not had proper communication or have not receive any documentation regarding the estate payments, deposits and activities from the executor?
Thank you!
Hi. How long does it take to distribute funds to beneficiaries (interim distribution) once all assets have been sold, debts paid, and a tax clearance certificate has been applied for?
ReplyDeleteAn interim distribution can be done at any time after the debts are paid. The whole point of doing an interim distribution, rather than waiting for the clearance certificate to arrive to do a final distribution, is that it can be done quickly.
DeleteLynne
Hello, Lynn. I'm the executor of my mother's estate. She left half of her estate to me and the other half to her caregiver. I did an interim distribution and gave us both 60% of our share of my mother's life insurance. It's been almost a year since my mother died and I'm currently waiting for the Clearance Certificate from Revenue Canada before giving out the rest of the money. The caregiver just dropped off a letter saying they want the rest of their money and that they went to a lawyer who said they could put a lien on my house and assets if I don't comply. This person is kind of a liar and will say anything to get what they want. I don't believe there's anything that they can do to force me to disburse the remainder of the life insurance until I receive the Clearance Certificate but you would know better. Thanks!
ReplyDeleteGood Morning
ReplyDeleteJust a quick question.
Once a tax clearance certificate has been received, what is the normal time frame the beneficiaries wait to receive their inheritance?
Thanks in advance for your help.
I guess I should have asked this question instead of the one above.
ReplyDeleteCan the Executor of the will withhold everyone's (or one person's) inheritance just because he feels like it?
My Mother has been told by her Brother (who is the Executor and one of 4 Beneficiaries my Grandmother's will) that he is angry that she and the other's keep questioning him about the money. It has been just over 3 years of my Grandmother's passing and it is a modest will. None of the Beneficiaries have a copy of the will, the name of the lawyer or have given information what is happening and that is why they have questioned him a couple times throughout the year. At this point he will not speak to any of them. He seems to have full control over this situation.
Please advise.
Hi Lynn,
ReplyDeleteI understand you answering my question does not mean client/solicitor relationship.
Both my parents passed away in 1996. As I was a minor at the time, funds were paid into court if I was a beneficiary on a particular financial asset. The Office of the Children's Lawyer (Ontario) administered it. I received these funds when I turned 18.
I learned from my uncle, roughly 15 years after my late mother's passing, that he was administering my mother's estate (1/2 house proceeds & some non-beneficiary RRSP accounts). As he has now applied for the final clearance certificate he has provided over 17 years of paper work for me to review (no debts or CRA liabilities). I would like to receive interim distribution but him & the executor lawyer stat I cant receive any funds until I sign a release. Is a beneficiary required (cant stress enough - Required) to sign a release before any funds are paid to a beneficiary? Yes, it may be usual to have a release signed for interim distribution but is it required? I believe it is only required for final distribution if no passing of accounts has taken place.
I ask this because I want some funds but I do not want to absolve him of his actions. He pretook trustee compensation before he told me I was residuary beneficiary. Also, I believe there is Breach of Trust: My mother outlined in her schedule A of will that no funds borrowed (he pay funeral etc) from a bank should be invested and only put into a interest barring account until these expenses require payment. The loan was larger than expenses so he invested the residual of the loan in a penny stock rather than use it to pay back the loan and the stock has gone to zero. This to me is a Breach of Trust.
I feel like I am hostage - Ok my actions or you get no money.
I have suggested 3/4 of estate with release/documents. This sounds fair.
Is it true I have to 'ok' (found many more) these discretion's by signing a release just to receive any money? If this is so, the system requires change. Beneficiaries have zero power.
Aaron
How do I start a new thread on here?
ReplyDeleteHi Mike,
DeleteYou can't start a new thread. Only I can do that. But you are welcome to post comments on any existing thread.
Lynne
Hello Lynn! I have read some of your readers comments,and have found them to be for the most part, very helpful, with my situation at present! I'm dealing with the last of a 2yr.7month ordeal over my late mother's estate. In short, the executrix, and other heir over the course this ordeal, have been involved with an illegal realestate transaction of my late mother's home, along with tampering of the trust before final accounts were passed! Yes, quite the nightmare!.... This past yr. over receiving statements requested on the estate accounts, and selling of my late mothers home, car, the figures weren't adding up! I guess the exectrix figured I would be greedy enough to sign on the dotted line without looking at the estate account figures to make sure they added up! My lawyer and I soon discovered the the opposing firm handling my late mother's estate had submitted fraudulant figures on the estate three times as well as senior lawyer charging estate more than twice while not informing myself , or my legal council of the realestate transaction either! So basically, the executrix figured that because the estate is not big enough, she and the other heir could go ahead and tamper with the estate before final passing of accounts to give the other heir credit out of the estate account in trust, to buy my mother's home, thinking she would have no legal back lash because the estate was not large enough to go to court over. However, my lawyer did state to go ahead and prepare for a court registrar to view the esate accounting, as we had overwhelming proof in paper work and emails back and forth of what was going on! Opposing law firm, had not only handled this very sloppy, and unethical, the paralegal from the opposing law firm had been handling the estate with out a lawyer overseeing the estate due to a revolving door of lawyers leaving this firm and an array of articling students, that had also been involved in this circus type of events! I had to involve the B.C. LawSociety to investigate my complaint I filed after an executors yr. and numerous requests via my lawyer for the opposing firm here in Nanimo B.C., to comply with financial statements on the sale of my late mother's home and her vehicle. Fast forward, the executrix felt she was entitled to her 5% and also wanted me to agree to pay, and extra $3000-5000 for parents final resting place of which was not disclosed in the will, other than verbal conversation in their life time of what their wishes were. So now, my lawyer , myself, and exectrix have signed and agreed to 3% and nothing more than the final hold back of $10,000.00 to be split by the exectrix and myself, as the other heir owes the estate back for the credit she received prior to the final accounts being passed. I know that this can take months! However, I would think if interm distribution has been paid out, that final tax clearence should be coming soon?! The law society ruled that the opposing law firm is still in practice, due to no other prior offences! Ssenior lawyer was on the hook for this mess, and it is on his record, along with his former paralegal that was fired along with alot of his office staff to date, via the law society of B.C. working with the opposing law firm to clean legal act up! So to your readers, if they happen to be dealing with a furtive, hostile executor, executrix, by all means seek legal council, if your not getting any financial information if you happen to be a beneficiary of an estate! Also, involve the Law Society, if it simular situation to estate matters what I have shared with you and your readers. The law society was very involved very helpful in this case! But I must warn, it takes alot of time and patients beyond!.... I hope story is helpful to your readers.
ReplyDeleteAs executer to my mothers will ,i live in central america and have to fly into canada 6 times this 2013 to settle mothers health issues,deathl,lawyer probatepapers,bank managers switch from pa to executer.do i get my expenses paid from the estateat 2000 a trip to clear up her estate?
ReplyDeleteYes, you should be able to recover reasonable expenses. It might be a lot cheaper and easier to simply hire a trust company in Canada to work as your agent.
DeleteLynne
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