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Friday, March 20, 2015

How can the executor get away with that?

You're the beneficiary of an estate, and you just know that something is wrong. It's been months - or years - and the estate isn't settled yet. The executor, who seems to be living extravagantly these days, won't answer any questions and in fact becomes belligerent when you try to get information.

How is he getting away with that?

This problem exists because not only do most executors not know what they heck they are doing, but most beneficiaries don't know what the executor is supposed to do either. A dishonest executor soon learns that he can get away with almost anything he wants because nobody is watching.

There isn't any government, public or police department supervising executors. It's up to the residuary beneficiaries to monitor and enforce what the executor is doing.

One of the ways that executors deflect questions from beneficiaries is to threaten to sue the beneficiaries. Apparently this works as a deterrent, but I don't see why. After all, what could the executor sue the beneficiary for? For asking questions that the beneficiary has not just a right but an obligation to ask? For trying to enforce what's in a valid, legal will? That's a bluff I'd be prepared to call.

Some beneficiaries recognize this bluster by the executor as aggression designed to keep the beneficiaries from finding out what's really going on, and know that they should hire a lawyer to push the matter. The problem is they don't want to further deplete their inheritance with legal fees. Unfortunately, if they don't hire a lawyer to stop the bleeding, there isn't going to be any inheritance left at all.

One of the ways to cover legal fees when beneficiaries are required to use the courts to enforce a will is to take the legal fees out of the money that would otherwise have been paid to the executor as an executor's fee. If the executor really is as bad as the beneficiaries believe, the court is likely going to be prepared to order that the executor forego his fee. This could mean that the executor has to repay funds to the estate.

If an executor is found to have committed theft of assets of the estate or caused financial loss to the estate through carelessness or extravagance, there can be further penalties. These might include orders to produce an accounting, being removed as an executor or, in the case of theft, even jail time.

So what can a beneficiary do?

Keep in mind that most estates are wrapped up within a year. We normally refer to that concept as "the executor's year". If that amount of time has passed, you have a right to press for distribution of the estate.

Make requests (e.g. for accounting) in writing. Start off with a friendly, co-operative tone for your first request but don't be afraid to be business-like and set deadlines if your first request is ignored.

Understand that enforcing the will doesn't make you greedy. You are making sure that what the deceased wanted to happen is happening. You are entitled to that inheritance from the deceased; the executor isn't giving you anything from his own money.

Consider holding a family or group meeting to allow the executor to prepare and present materials to the group. Perhaps this even needs to be a mediation if communication has already broken down. Make it clear to the executor that you are giving him every chance to co-operate before taking things further.

If all else fails, hire a lawyer. Make sure that the lawyer is a specialist in wills and estates. Pool together with other beneficiaries if possible to collaborate on fees and present a united front to the executor.

9 comments:

  1. My brother was Attorney for Property as well as sole Executor of my parents' Estate. It has been over two years since my Father passed away. He has admitted to making unwise investments in energy stocks as well as personal loans to himself. I have hired a succession of three law firms who have ultimately failed to obtain full information as to the value of the Estate, although I have learned that most of the money has been used by him. I am now planning to represent myself in Superior Court. I know nothing about procedures & can no longer afford a fulltime lawyer. Are there any advocacy groups available? I need a lawyer to assist me. Any advice or reference would be appreciated.

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  2. My brother, also was named Trustee in the Will, but he stone-walled the only other beneficiaries, myself and my sister, angry that the Will directed a three way split. She hired a lawyer to block him from liquidating the main asset, the mother's home where she had been residing cheaply for twenty years. Her taking advantage of the mother was the main cause of my brother's wrath. That lawyer used unfounded claims that she was a Dependent, and was owed money for capital improvements on the home ( she is 58 in good health and a career clerk at Ontario Superior court. There were no receipts to support her constructive trust). After two years of purposeful delays and $150,000 legal fees, I took another $50,000 loss to stop the madness. Her lawyer ultimately cost the estate 15% of its value and he pocketed $75,000, all on false claims. He played his hunch, the costs would force us to give up before it ever got to court, which would have exposed the lies his money grab was built on. The Executor has taken a $45,000 fee to boot.

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  3. There are many articles discussing the bad executor. For those of us that have given 100% of ourselves to manage an estate and then get treatment from beneficiaries of accusations, stress, threats and so forth. I would like to see more articles in defence of an executor and how executors can get help and have the legal system defend us.

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    Replies
    1. Thanks for that comment. I agree, we do seem to talk a lot about the executors who do a bad job, and not those who are doing a good job. I'll try to keep a better balance in future posts.

      Lynne

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  4. Excellent article.
    Lynne, what I would like is an opposite view..How can a beneficiary get away with that? I am in that situation as executor. My case involves misbehaving lawyers. I have my lawyer up against the ropes and now he wants to 'get off the record'

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    Replies
    1. Misbehaving beneficiaries and misbehaving lawyers are both worthwhile topics for me to explore, and I'll do that. I have plenty to say about beneficiaries who delay, lie, stonewall, and otherwise make a mess of an estate.

      Could you provide more particulars as to how the lawyer misbehaved? Usually someone wants to get off the record because they just can't work with the client anymore, for any one of a dozen reasons. It sounds as if your relationship with him has deteriorated badly. Is there something specific I could address?

      Thanks for the feedback.

      Lynne

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  5. After reading your very informative blogs, i am led to believe that my step-sister, who was also executrix, and in a tenant in common situation with my father, who passed suddenly 2 years ago conned my brother and I, the sole beneficiaries of his RRSP'S to pay the estates taxes. And, she pressured us, to sign our bequeathed 1/8 of her house, so she "wouldn't lose her home".
    Can I, the first born, take her to court, to get our money back? She gave us a vehicle in lieu of our portion of the house. But my vehicle was only worth half of what my brother received. Can I ask for the rest of my share? And, now we just found my grandmother's will, and I was to receive several pieces of jewelry, and other items. She claims they were stolen years ago, and therefore, I have received nothing from her will either. Can I get compensated for this loss?

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  6. Hi Lynne,

    I can't tell you how much I enjoy seeing your posts in my inbox! Your blog offers so much advice and insight.

    My question is this... Just how far do the responsiblities of an Executor extend? Our Executor (whom was court appointed) announced to us last week that, after only being on the market since November, our mother's house is going power of sale. There is a reverse mortgage on it, which is now due. Two of the three children (myself included) are not in a position to pay it off, and our other sibling refuses to help in any way. The equity in the home is triple what is owing on the reverse mortgage. Supposedly having the best interest of the Estate, and having control over all the assets, should the Executor (who works for a very influential corporation) not be finding alternative financial arrangements to ensure the house is kept from going power of sale? We've already tried going to the bank, with the assurance that as soon as the house is sold they get all of their money, plus interest, but that failed. We even called the company holding the reverse mortgage and spoke directly to the person we dealt with directly prior to this Executor being appointed. She said she knew nothing of the house going power of sale. We thought that was interesting!

    We thank you for any thoughts you have to share with us!

    Ani

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  7. I don't know what to do. I am trying to help my children deal with the executor of their mother's will. The executor is their mother's oldest sister. Their aunt/executor is saying the the lawyer has cannot locate their mother's will. The lawyer that originally wrote up the will retired and passed on the will to another lawyer and that lawyer is the one that is saying they cannot locate the will. My son's went to the registry office for wills and was told that there is no will registered. The aunt/executor is being allusive about supplying the contact details of that lawyer. Presently the Families Responsibility Office of whom i am paying the final outstanding retroactive balance of support payments is looking into where the payments are going to as the account of the deceased have been closed. At this point there is about $6000.00 that will be sent to the estate from FRO. The aunt is also the executor of their grandmothers will and has been taking taking monies/valuables of that future estate now before the death of the of the grandmother. The aunt works for Revenue Canada and I am in the process of having her investigated as I have evidence in an affidavit that strongly suggest the aunt/executor has breached the freedom and privacy act as there is a document faxed from CRA in the Toronto area code with personal information on my tax file. I have been informed by CRA under no circumstances should any personal information on my tax file come from anywhere but Summerside PEI where my file exists and is manged from.

    If the above is true then the aunt/executor of my children mother would be immediately fired and would be fined and face imprisonment.

    Any thoughts or suggestions on how to deal with all of the nightmare?

    Jeff

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