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Wednesday, July 6, 2011

Can an executor be sued for secretiveness and delay?

I'd like to answer another excellent reader question today. The first thing I noticed about this question is that it starts with a complaint that the executor doesn't give any information. Executors reading this blog, take note at the number of problems that start when you hoard information! Just be transparent and a lot of these issues just don't ever arise.

Here is the reader's question:

"The executor does not give us any information about the estate of my mother, who died in 2004. He still does not want to settle the estate. He and his lawyer are saying there is an estate tax to be paid, which I believe is a capital gains tax as there are several piece of property involved. I was told that capital gains tax was paid in 2006. Now he is saying it is not. Can the beneficiaries sue the executor for lying for years?"

The fact that capital gains tax was paid in 2006 but must be paid again doesn't necessarily mean the executor is lying. Keep in mind that capital gains tax is payable each time a piece of capital property such as real estate changes hands. Back in 2006, tax was paid on transfers of the property from 2004 to 2006. If property is now changing hands - say it's being transferred to a beneficiary or being sold to an independent buyer - then there likely is additional tax because of this transaction. After all, the properties have been sitting in the name of the estate for seven years and have probably gained in value during that time.

Having said that, in my view seven years is much too long for the wind-up of an estate. Obviously I don't know all of the facts, so there could be complications that I don't know about, such as farms or businesses on the lands in question. But any executor who takes seven years (so far) with an estate without at least giving regular reports to the residuary beneficiaries is taking a huge risk.

I never understand why executors are so darn secretive. Perhaps they think that it's better to just keep their mouths shut and not invite trouble by telling others what they're doing. Unfortunately this is almost always the wrong way to go about it and they just shoot themselves in the foot.

When an executor mishandles an estate (and I don't know for sure that this one has - I'm making a general statement here) he or she can be taken to courts by the beneficiaries. It isn't really suing the executor, in the familiar sense of suing for monetary damages. The usual outcomes are that the court will force an executor to pass accounts, or will remove an executor from the job, or will force the executor to lose his or her executor's fees, or all of the above. Executors are sometimes ordered to pay the estate out of their own pockets if their behaviour has been really over the top in terms of dishonesty or mismanagement.

This executor is fortunate that he hasn't already been taken to court. There may be nothing wrong at all with the estate, but if so, he hasn't let anyone know.

27 comments:

  1. Hi:
    As a son to a deceased father in 2012 how do I get (legal) access to my father's documents if his executor (not I) is not allowing me access to them? I had asked him, the executor many times about getting my father's documents and other personal items that he had possessed and all are still in the residence of the executor.
    I reside in BC and my father died in BC in 2012.

    Thanks.

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    1. There is nothing in law that allows a non-executor access to a deceased person's documents. Doesn't matter if he was your father.

      Lynne

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  2. thanks for sharing great posts... :)

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    1. You're welcome. Thanks for reading :)

      Lynne

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    2. Hi Lynn! Does an executrix and her lawyer have the right use the deceased money held in trust before final passing of accounts and my signature as the beneficiary? I have proof in paper work, opposing lawyer by the way, four presently from the lawfirm representing the executrix and older sibling. It turns out, that the sale of my late mother's estate was sold without my input (Beneficiary) and or my lawyer's knowledge. Funds were taken out of the estate to credit older sibling before final passing and closing of accounts were done! Then the older sibling wrote a check to cover the funds taken out of the estate to credit the executrix,all before signatures were done in agreement by all parties involved to close the estate! My late mother resided in B.C. It has been almost 2yrs. The handling of the estate needless to say, has been very handled very unprofessionally by opposing law firm. I now have the Law Society of B.C. involved and filed a formal complaint for delay and unethical,and unprofessional handling of this estate. I have refused to sign off on anything until I know the disciplinary outcome from the LawSociety of B.C. The estate is small, so forcing of final passing of accounts through court would deplete my inheritance of which both executrix, her lawyer,and older sibling are aware of! Also, paralegal from opposing firm, acted handling estate without senior opposing lawyer's knowledge, or so he claims to date! Any advice?......

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    3. Of course the executrix and her lawyer can use estate money without the beneficiary's ok. The executrix is the one with the authority and the responsibility to pay bills, file tax returns etc. They can't possibly do all that if they need the consent of beneficiaries at every step.

      Lynne

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  3. Hello Lynn! My question is, can an executrix and sibling use monies in my late mother's estate, without my knowledge and or signature, as well as my lawyer's input, before closing the estate?.....I do have proof in emails and dates(information on accounts,sale of car,& house that clearly show house was sold to older sibling without my lawyer's knowledge passing of accounts and signatures! My mother passed in March 28th/11! The estate is in a total mess! There is a problem with the executrix and older sibling not complying with information that I have repeately asked for being the beneficiary! It has been almost 2yrs! I ended up having to file a formal complaint with the law society of B.C. as that is where the deceased resided as well as myself and executrix. I recently found out that the executrix used money from the estate to loan older sibling to purchase my late mother's home, and later credit the estate back! To date, I'm awaiting a decision as to what if any disciplinary action will commence from the Law Society of B.C. The estate is small, both executrix and older sibling are basically trying to bait me into depleating all my inheritance by forcing final passing of accounts! By the way , the executrix has gone through four lawyers from the firm currently handling the estate. Senior lawyer for executrix now on the hook for this! I have refused to sign off until I know what if any disciplinary action will follow from Law Society of B.C. ! Needless to say, "Yes" this has been a total mess as to how this is being handled thus far. Any imput, would be greately appreciated!

    ReplyDelete
    Replies
    1. If the executrix is the problem, why are you complaining to the Law Society? All they do is investigate complaints against lawyers. They can't do anything about the executrix.

      Lynne

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  4. Hi Lynn! I have complained to the Law Society, as I feel that the lawyer involved in handling the estate has breached certain ethical duties, especially where some of his staff is has been involved in handling the estate at with out a lawyer overseeing this! If I force final accounts, that depleates my inheritance! I feel that if misconduct and opposing lawyer is made to take remedial courses ,for unethical handling of this, then I'd be happy with that! My lawyer has stated that it would not be worth depleating inheritance to suit both executrix or opposing lawyer as they would want to date!

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  5. My Mother pass in in 2006. The Executor(my brother), hired the estate lawyer, transferred MY NAME WITHOUT my consent to family cabin, which puts me o the hook for the half the taxes on a cabin I can't use, and left the estae ARREARS! I then had to ASK for an acconting of theestate as the awyer e hired sent me a document to sign as beneficiary as having no further claims pr disputes beyond this time. The accounting of the estat contained only the mortage 1"mortage papers from my MOTHERS PRINCIPAL ESTATE, papers stating his 9,000 fee, and the page for me absolving him and the estate for ANY questions or accountanbility. The cost of the funeral was not even included in the accounting, nor a listing of her assets. Surely the "lawyer" MUST be aware of the final dispensation and $'s of an estate and what it must entail. I have showed this to 3 lawyers who all were astonished that a cover letter, an 1" the standard mortgage papers from her principal estate sale,my name on a title to A CABIN I CANNOT USE AND his fee would be used as a full accounting of an estate to which he decided to cgarge $9000(including his "extra services) I HAVE NOT SIGNES THE RELEASE AND HAVE NO INTENTION ON DOIND SO TILL THIS LAWYER AND THE EXECUTOR ACCOUNT FOR ALL MISSING MONIES AND ARTIFACTS. also--CAN they actually pu my name on the title to a piece of property I do not/can not share with mty brothers family, have noe access to , but am reponstible for half the faxes. The keeping of this cabin is what put my mothers estate in arrears- well that and the SHADY LAWYERS paper he wished me to sign absolving all recourse to him or the executor at ANY future time. It has been seven years. We are in MANITOBA, should THEY NOT HAVE AT least listed what was in her bank accounts, or APPROACHED me about being added to the title of the cabin and having to pay the insurance and taxes?

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    1. Ok, take a deep breath, before you explode. Yes, they can put the cabin in your name without your consent. This was what the will instructed the executor to do, so if you're going to be angry at anyone, the proper person is your mother. She's the one who decided your name should be on it. Yes, that puts you on the hook for taxes and other things, but like I said, blame your mother for that.

      The accounting does sound pretty inadequate. Might I ask why you are asking me about it when you've already seen three lawyers? Yes, the accounting should list her accounts, the funeral expenses and every other transaction that went through the estate.

      Again, your anger is misdirected. The lawyer isn't the one who handles the estate transactions. That would be your brother, the executor. How do you expect a lawyer to send you details of bank accounts or sales or the funeral if the lawyer never had that information?

      If you don't like the accounting, and I can see why you don't, then stop schlepping it around to every lawyer in town and send a written request to the executor asking for the needed information.

      Lynne

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  6. Hi Lynne,

    We have a former executor, who has been removed due to the fact that he has taken over 10 years to probate the Estate, has defrauded the Estate (an indictable offense) of monies before Probate, allowed the Estate property to decline in value, failing to protect the assets, and just about every possible thing that can get an Executor removed.

    We've established all this and need to know what the next step is. Do we take him to court with civil litigation? Do we go to the police to charge him with fraud/theft over $10,000? Do we have to sue him? How do we take legal action against him?

    The new Executor and her lawyers aren't pressing any charges against him (most likely due to the fact that they are siblings), and isn't going after the Bank for allowing him to withdraw funds BEFORE the Will was Probated.

    Thanks

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  7. im a beneficiary of my partner estate , the executor and the estate lawyer met with me on december and they gave me a month to find way to come up with money so i can keep the house or to give them my decision to sell the house , and when i met with them i took my lawyer with me to the next meeting ,and i told them im ready to sell the house and i have a buyer , and we agreed that that the estate lawyer talk to the buyer without hiring a real agent , after afew days from the meeting i found out they hired a real agent and they listed the house in the market befor even i met them to give them my word about the house , they broke the agreement to sell the house to the buyer i have with out agent , and they lied that they list the house in the market before my meeting with them to give them my decision
    can i saw the executor and the estate lawyer for lying to me ? any help would be very appreciated

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    1. I wish I could give you better news. I don't think you would have a reasonable chance of suing the executor for lying to you. At the end of the day, it is the executor who has the responsibility for selling the estate assets and it is up to him to decide whether or not to use a realtor, what the price should be, etc. If you had a signed agreement with the buyer, that is something you had no legal right to sign. Now, I'm not saying the executor should not have listened to you. It's possible that your arrangement would have saved the estate money, assuming that the price you had negotiated was the same or higher as the one the executor will get on the open market. If it turns out that the executor's decision not to use your buyer ends up costing the estate a bundle of money, you could sue the executor for that loss.

      Hang in there. Estates are tough.

      Lynne

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  8. Can my brother, who is executor (& beneficiary) to my mothers estate deduct personal expenses from disbursements to other beneficiaries that he has associated/assigned to my mother living in his house until her passing?

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  9. Should beneficiaries be given details of the sale of a home by the executors of an estate -- buyers names, addresses and e-mail addresses, as well as their lawyers information Beneficiaries have been informed that the house has been sold as per probate with the amount of half the home which was tenants in common and that the funds were put into a trust account as per legal advice, in case the executors have to petition the court to use it for the surviving spouses long Term Care. We have answered every question and kept them in the loop when there was something to report.

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  10. Hi the executor of my Mother's will is still holding back the last bit of the monies as she messed up from the start (2012) the we still have money coming to us. Her latest this she said is that there have been cut backs in the Government and she is still waiting to the clearance certificate,should have neen done by now but she said last May she forgot to send a copy of the will "whatever" we have received 80 thousand each so far (4 of us) I really think she playing us now and wants to hold on to the remaining founds as long as she can. It's my Aunt and there is bad blood there is only 7 thousand left for each of us,I do NOT want her getting her fee at this point, do you know if the Government would tell me her Son on the progress of this and she if he is lying. Thanks for any help you can give me.

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  11. Our father passed away June 2009. We are looking to obtainthe final accounting letter to sign off on the estate. The final tax clearance certificate came in September 2014. There was a discrepancy with funds transferred from the closing of my father's bank account to the estate account that has been resolved. There have been many emails, texts and calls to the lawyer/executive to wind up the affairs. The delay is either her personal family problems, being semi-retired, and no longer having her assistant. What steps can we take to bring this to a conclusion?

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  12. Can I sue my mother posthumously

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  13. Hi Lynne,

    My older brother acted as the executor of my father's estate and was not very forthcoming with information as well as an accounting of expenses. He also appointed himself to act as a realtor for the sale of my father's home and also paid an uncle for some repairs to wall such as plastering and sanding which in my opinion isn't exactly an arms length dealing. Are these behaviors ethical and isn't appointing yourself to act as a realtor while being the realtor without the consent of the adult beneficiaries considered a conflict of interest?

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    1. I realize that the lack of information is frustrating and always leads to suspicion and speculation, but in this case I don't see anything that alarms me.

      The executor doesn't need the consent of the adult beneficiaries to do anything. The only exception might be the sale of real estate, but even that depends on the wording of the will. The executor is in charge and does not need anyone's permission to carry out the estate.

      I think you're saying that your brother makes his living by being a realtor. It's alright for an executor who is also a professional (e.g. lawyer, accountant, appraiser, realtor, etc) to do that job for the estate. It's also okay for him to pay himself the going rate for the work. This does not need to be an arm's length transaction. Having said that, it doesn't give him carte blanche. If he isn't qualified as a realtor he cannot pay himself to act as realtor. He cannot overpay himself. When I write wills in which the executor may do work for the estate, I always include a "professional charging" clause that clarifies it for everyone.

      In other words, it is not a problem to pay the executor to do work that the estate would have to pay a third party to do.

      Same goes for paying an uncle to do repairs. If the repairs are of the proper quality and the payment made was the going rate the estate would have had to pay a third party, it's fine for the uncle to do the work. Arm's length is not required.

      Not getting enough information from the executor is another issue altogether. Perhaps you could ask him to set up a monthly, weekly,or other time period, email update to the beneficiaries.

      I tell executors every single day that hoarding estate information leads to problems, and that's what has happened in your case, but they still behave that way.

      Lynne

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  14. Can I sue in small claims court the executrix of my mother's estate for the drop in inheritance (dollars) after changing lawyers (this is the second one) and the new lawyer will be paid at least $25,000 to push this estate through, even though the last lawyer was almost at that point in pushing it through?

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  15. Do you still take questions ?

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    1. Of course. Ask a question by posting on any thread that does not have a warning in red that the comments section is full.

      Lynne

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  16. I have documented proof that my coexecutor's p10 contains false information and refused to sign p8 .asked thelawyer she hired to get her to submit p14...was ingnored then lawyer withdrew citing me as the reason.eventually decided to transferexecutorship to BC pubic trustee.coexecuter refusing to give up executorship. Probate now stalled...what can I do?...

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  17. My uncle and family is currently being sued for mismanagement of our grandmother's estate. Firstly, my mother, brother and I had in my grandmother's will that we could live in her house after she passed. My uncle (power of attorney of estate) pressured me at her funeral to leave the premises. We naturally declined but they were relentless in trying to remove us from the house. My mother was taken to court. She won as the judge said she has in the will she can stay in the house. So my 3 uncle's and 2 aunts left the court house with their tails between their legs. This still did not stop my uncle from pressuring me to help get out of the house. I agreed to try and start looking for a place to live and while my mother was visiting me, the police came to my grandmother's house and evicted my brother who was living there as he had been labelled a "vagrant". We are suing as our lawyers say we had a life interest. We have discovered that the power of attorney of the estate (uncle) has been skimming money this whole time and possibly forged documents to have the police involved.

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    1. Sounds like a real mess. Wouldn't it be great if people could just talk instead of using the courts and the police as hammers to hit each other with?

      Lynne

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