This leaves the estate at a standstill, and beneficiaries waiting around. Usually this is followed by a breakdown in family harmony. While executors have a right to apply for probate, they have to remember that beneficiaries have rights too. The executor has a legal responsibility to administer and distribute the estate.
If an executor has a legitimate reason for the delay, he or she should communicate that to the beneficiaries and keep them up to date on the progress of the matter. Even a legitimate reason eventually runs out. For example, if the executor is ill and cannot work on the estate right away, no doubt the beneficiaries would be patient and allow him or her time to recover. However, if it becomes apparent that the recovery is going to take years, it would be better for the estate if someone else took over as executor.
Communication is very important on an estate. It could be that the executor is managing to deal with the estate without applying for probate, and that things are actually further along than the beneficiary realizes. In that case, the executor needs to keep the beneficiaries informed. Most executors don't actually understand that the residuary beneficiaries of an estate do have a legal right to be informed about what's happening with the assets.
So what can a beneficiary do in a case where there is no legitimate reason for the delay, and the executor just flat out refuses to apply for probate?
Provincial laws allow "any interested person" to apply to the court for directions on an estate.
The phrase "interested person" has a legal meaning, and doesn't just refer to anyone who finds the estate interesting. It means a person who has a legal stake in the estate, in other words the beneficiaries or creditors of an estate, or someone who wants to bring a claim such as a spouse who is left out of the Will.
When you make an application for "directions", you are basically telling the court what's happening (or not happening) and asking for the court's advice and direction on how to deal with it. The court has quite a bit of power to make pretty much any order that it thinks is reasonable and fair in the circumstances. For example, the court might direct that you or another beneficiary should bring an application for probate, or that the executor apply within a certain number of days. There could be other orders as well, if there are assets that are in danger or minor children living without financial support. Don't forget that the court will hear the executor's side of the story as well.
You will definitely need the help of an experienced estates lawyer to make this application successfully.
can executor hold up because they want clearance
ReplyDeleteIf you mean whether an executor can hold up distribution of the estate while he or she waits for a tax clearance certificate, then yes. An executor's duty is to pay all debts before paying any beneficiaries. The clearance certificate is proof that all taxes have been paid. There is a process in place called "interim distribution" (which I posted about recently) by which the executor can choose to pay out the bulk of the estate while holding back enough for taxes, but it's completely up to the executor whether or not he/she wants to do that.
ReplyDeleteThe executor of my dads estate is also the only residuary beneficiary. She refuses to distribute shares of a corporation left to me and my siblings and my stepmom, the executor, until a clearance cert. is obtained. However, she has distributed everything that was coming to her personally (the residuary estate)and has spent a good deal of it to buy a house. I do not see how the distribution of shares needs to be held up as the corporation is not being wound up. Also, could some money simply be held in escrow until the cert. is received...Any taxes owing should come out of the residuary estate, not the corporation anyway. This was the first bequest stated in the will ahead of other bequests that she has already fulfilled. She is also using corporate money for personal and estate expenses. Can I press for the share distribution (my question mark does not work!)
ReplyDeleteMy sister and I are co-executors and the sole co-beneficiaries of our fathers estate. She and her husband have told me we will not be proceeding with probate. No explanation. No discussion. I believe they are facing legal action by creditors due to business problems and I suspect they are trying to hide my sisters inheritance. My father died more than 1 year ago and asset holders (banks, stock co's) have expressed concern when told no probate is forthcoming. I'm concerned that both myself as co-executor and the estate are at risk. What should I do?
ReplyDeleteFirst of all, you and your sister are c-executors so you have as much authority as she has. Secondly, what the heck does her husband have to do with anything? Unless he is also an executor, he has no say in this.
DeleteIf I were you, I'd take the will to a lawyer and get the application for probate under way. If assets deplete or are ruined while they sit there, you and your sister might end up replacing them out of your own money. And it doesn't sound as if she has any, so it's going to fall on you.
She will be asked to sign the probate, of course, as she is a co-executor. If she refuses for no good reason, proceed without her and ask the court to remove her.
Her credit problems are her own. She is making them yours, as well as that of the beneficiaries and everyone who is relying on that will and probate to transfer assets. Talk about selfish!
Lynne
Thank you for your comments and clarity, Lynne. I appreciate it. Most of us are not legal experts. There is much to do in administering estates as it is. Family feelings and politics add another layer of fun and complexity. You said it like it must be. There's a job to do. Stay focused and get it done.
DeleteIs it kind of a dumn question but if there is a will but no executor appointed, does anyone can apply to be appointed as one? If so, is there a limitation period, ie., time limitation to such application? Thank you!
ReplyDeleteNot a dumb question at all actually. The most common situations are that a) there is a will with an executor named, or b) there is no will. Each has its own legal process. The situation you've mentioned is kind of a hybrid of the two. The way to address it is to have someone (the person who would be the administrator if there was no will) take the will to the court and apply. They are basically telling the court that they will carry out the will as it stands in place of the executor. This is a very well known process to estate lawyers. And no, there generally is no limitation period.
DeleteLynne