Real Time Web Analytics

Tuesday, October 2, 2012

I disagree with the executor's accounting - now what?


I hear a lot of questions from both executors and beneficiaries about the process of reviewing an executor's accounts and signing a Release. I recently received the following letter from a reader, which echoes what many others of you have asked:
"Can you tell me what happens if all heirs do not agree with the statement of accounts? Who looks at that and would the person(s) be contacted regarding why they do not agree with a statment of accounts? I disagreed with the stmt of accounts over a year ago and nothing has happened with the will since. The executor is not co-operative."

The beneficiaries of an estate are given the statement of accounts along with a Release. If all looks fine with the accounts, the beneficiaries sign the Releases and return them to the executor. Once all Releases have been received, the executor pays out the distribution that was outlined in the statement of accounts. The purpose of all of this is to get the beneficiaries to state that they approve of what the executor has done with the estate so far. This indemnifies the executor.

You asked who looks at the fact that a beneficiary doesn't agree with the accounting. This would be the executor. If the executor is using a lawyer to help with the estate, no doubt the executor would consult with the lawyer as to what to do next.

If the executor is trying to do the estate without the help of a lawyer and prepared the accounts without help from a lawyer or accountant, he or she may have no idea what to do now that a beneficiary has disagreed with the accounting. The next logical step from a legal point of view is for the executor to apply to the court to have the accounts passed by the court, but I would hope that before spending the time and money to do that, the executor would try to find out what the problem is, and rectify it.

Beneficiaries have the right to ask for more information on an accounting if something is unclear, or to ask about items that appear to have been omitted. And if the whole thing just seems out of whack, the beneficiary has the right to refuse to sign the Release.

Unfortunately, our system is based on the premise that an executor will want to take care of the estate properly and will make every effort to move the estate along as best he can. As it happens, plenty of executors don't really care if the estate drags on for years, as they aren't the ones waiting for an inheritance. Therefore, even if the executor is aware of the next steps, he or she may not wish to proceed without prodding.

You need to write a letter. If the accounting was sent to you by a lawyer, write to the lawyer, otherwise write directly to the executor. State your objections to the accounting, giving facts or figures if at all possible. Saying something like "I just don't like what you did"  or "I think you're hiding something" isn't useful and won't bring anything to a conclusion. You should be able to specifically refer to an item or a figure, and state, for example, "Mom's house was listed for $450,000 but the accounting only shows $325,000 going into the bank. What happened to the rest?"

Your responsibility to the procedure is to police the executor's actions, but keep in mind that the executor is human and can make mistakes. Give him or her the chance to explain the numbers in the accounting. Realize that most of us have never provided an accounting for anything in our lives and perhaps aren't that good at it, so your detailed questions should allow the executor to understand what is required. Don't nit-pick for the sake of nit-picking, and try to stick to real issues.

Refer to the fact that the accounting was provided a year ago, and that you want the matter cleared up.

If you receive satisfactory answers to your questions, you should sign the Release and return it to the executor. As you've said that the executor isn't co-operative, I don't expect this to happen, but perhaps after a year he or she is more motivated to wrap it up. Don't sit and wait any longer; there is a common law concept of the executor's year that says an estate without legal complications should be wrapped up in a year, and obviously the executor has exceeded that.

If the executor simply won't move on it, you will likely have to hire a lawyer to help you resolve it or push it through court. Perhaps the other beneficiaries would pool their resources with you since everyone would stand to benefit.


29 comments:

  1. Hi Lynne, Can someone request to see the accountings of an estate if they are not a beneficiary of the estate? As per the will my Mom is the sole beneficiary of her dad's estate and her sister wants documents of the accounting. My mom didn't go through a lawyer since there was no property, no debt and only $170 in his bank account. There were 2 insurance policies one for only her and one with both their names (they both know about the policy with both their names). Also the death occurred over a year ago and was not probated (because of the small assets) was it wrong not to probate it?

    Thanks so much for your help!

    ReplyDelete
    Replies
    1. No. Only beneficiaries are entitled to see the accounting.

      Lynne

      Delete
  2. What if th lawyer has sent 100 pages of accounting for us to review and wants an indemnity and release document signed immediately so that an interim disbursement of funds can be made. Can I say that I need time to go over every document and that I won't sign now. I would agree that they can give everyone some money now, but I won't indemnify the Executors that it's all right because with that many pages it will take time to go over everything. Can I hold this up?

    ReplyDelete
    Replies
    1. There is nothing wrong with asking for enough time to digest 100 pages of information. But it should be a reasonable time. It's important information, so take your time, but don't delay it beyond what is necessary.

      Lynne

      Delete
  3. My father died 22 years ago. The executrix was/is his ex-wife. She just sent us the accounting recently after 22 years! We wrote down and sent our objections many months ago and received no response. Now what?? 22 years!!!

    ReplyDelete
    Replies
    1. Normally when beneficiaries object to an executor's accounting or lack of response from an executor, I would suggest that they enforce their rights through the courts. However, this 22-year gap is going against you just as much as it's going against the executor. The fact that none of you did anything for 22 years to force an accounting may amount to what the court calls "beneficiary acquiescence". In other words, you allowed this delay to go on well past the time that any ordinary beneficiary would. So, if you don't get satisfactory answers from her, you obviously have recourse to the courts to ask her to pass her accounts. However, if there are problems with the accounting, you may not get a lot of sympathy from the court.

      Lynne

      Delete
  4. money as been given to family that was not named in the will, a insurance policy as been cashed, we have tryed through a lawyer to get statement of accounts and see what happened to all of moms stuff/furniture etc but only garbage replys come back to the lawyer we have copy of the will and people that were paid out were not mentioned in the will ? please advise

    ReplyDelete
    Replies
    1. It sounds as if you've got one of those executors who thinks they have the right to do whatever the hell they want, no matter what the will says.

      If you cannot get co-operation and answers from the executor, your recourse is to get your lawyer to get it into court for a passing of accounts.

      If it turns out that the executor is paying people that he or she should not be paying, part of your request might be that the executor be removed, and that any amounts that have been improperly paid out be reimbursed by the executor personally.

      Lynne

      Delete
  5. The lawyer failed to protct the estate and 293k was awarded against the estate direct result of lawyer executer and realestate agent ther is likely fraud involved .The lawyer acted as agent on one occassion and took a deposit from one of the benificiaries promised to give accounting there was agreed price but the lawyer stated the value was rising so he relisted the property failing to provide language that was previosly written before probate had passed and lost our family home and caused substantial damages The most recent sale he sold the home for less than 100k under market value had account s passed and now wants me to sign a release when there is pending litigation against the lawyer is this legal for him to force a release while ther is pending litigation?

    Regards
    Anonymous

    ReplyDelete
    Replies
    1. It wouldn't be proper for someone to ask you to sign a release during litigation if the release is about the same subject matter as the litigation. Your message seems to cover several different transactions, though they appear all to be in the same estate. If they are all in the same estate, and the litigation is about the lawyer's work on the estate, then it wouldn't be right for him to ask you for a release. I'm not exactly sure why you think he is "forcing" the release?

      Lynne

      Delete
  6. The executor of my husband's mother estate has taken a full year of a simple will, she does not talk to my husband a rarely answers questions he has, she has an accountant and a lawyer that has dealt with the will..my husband tried writing to the lawyer instead and they just past the letter although private straight to the executor..now there is a family feud..this is all finally coming to an end and recently he was sent his release form to sign and noticed that the executor put in for the full 5% of the estate, AFTER she had already had 1/4 million before his mother died and then had to pay it back..but for a year she has avoided it, so of course saved interest. Because she has asked for the full 5% she has to pay taxed and CPP on that also, so giving the government $20,000 that could have been split between the other beneficiaries. Unfortunately, his mother decided to split the will 5 ways equally amongst grand children as well as my husband. so out of the siblings ( the executor and my husband) he will in effect receive the least, as the executor is receiving an extra $42,000 for her fee when she had an accountant and a lawyer do most of everything and they have to be paid as well. Final accounting only shows their bills, not anything else she may have done..because it has been a year and a lot of stress for my husband he is going to sign off on it, but it has forever estranged them, and most of that has resulted because of the lawyer or para legal actually, sending confidential emails/letters meant for the lawyer to the executor..is there any recourse on the lawyer for this as they in effect caused the executor to stop communicating directly with my husband so he had no choice but to contact the lawyer, and the lawyer assumed the executor would fulfill her duties when questions were asked..and this was not the case.

    ReplyDelete
    Replies
    1. There is absolutely nothing unusual about an estate taking a year. In fact it's extremely unusual for any estate, even simple ones, to be wrapped up in a year.

      You have misunderstood the role of the lawyer. The lawyer works for the executor, not for your husband. This means that when the lawyer gets correspondence on the matter he is hired to work on, he has to show it to his client. A non-client can't write to a lawyer about his client and ask him not to share it with his client. In my view, there is no recourse there because IMO the lawyer did what he was supposed to do.

      The real issue here seems to be the amount of compensation asked for by the executor. Your husband may have a case, if the executor actually did cause a loss of $20,000 to the estate. His recourse would be to withhold his approval of the executor's request for compensation, and have the court examine her accounts. I understand your husband's point of view though, when it comes to just signing off. A person can only handle so much upset and stress.

      Normally an executor would be required to reduce her fee if she delegated her executor's responsibilities to others. However, whether your sister in law did this depends on the facts. Did she hire the lawyer just to do legal work, or did she actually get him to do work on the estate that she was supposed to do? Same with the accountant - did the accountant only work on tax returns? The rule is that an executor is allowed to hire a lawyer to do probate and give legal advice, and to hire an accountant to do taxes, without losing any of her fee. The fee only becomes questionable when the lawyer or accountant are asked - and paid - to do the work of the executor. Obviously I don't know which is the case for this particular estate.

      Sometimes it can be really easy to feel suspicious about an estate or an executor, simply because you don't know what's going on. I tell executors CONSTANTLY not to be so secretive and hostile because it makes people wonder what they're hiding.

      Lynne

      Delete
  7. This comment has been removed by the author.

    ReplyDelete
  8. Who's Expenses Are They?

    I administrate for an uncle who died in 2008. He was a farmer and a hoarder with 280 acres, a 1 and 1/2 story farm house, a garage, 4 barns, 3 granaries (every building full), plus a yard full of junk: derelict cars, tractors, farm implements, tires, farm chemicals, scrap metal, lumber, and hordes of clutter and junk. My mother, living at the time (died in 2010) inherited 1/2 of his estate and my 3 cousins inherited the other 1/2.
    One of the cousins gave me his 1/3 of his half. I also inherit 1/3 of my mother's estate. With the combination of the two estates, I chose to inherit 80 of the 280 acres, plus the farm house and out buildings, plus a bit of cash. The other heirs chose to inherit money.

    At the start of my administration and while waiting for the two estates to settle, I approached the heirs and asked to have the house and 80 sold to me through a mortgage to save them the costs of any on going hydro, taxes and insurance, plus any basic minimum upkeep to the house ( substantially depreciated but renewable) to keep it from falling apart as it was taking time to sell off the 200 remaining acres (remember, I was keeping 80). Three heirs agreed but a 4th didn't. She lives in a care home as a result of a head injury in her teens in the 60s, thought I was trying to bully her when I approached her about a mortgage, so she said no. So there may be a 'of a sound mind' issue at play here. In truth, my spirit and my tone to her were no different than my spirit and my tone were to the other heirs who said yes.

    The estates have taken till now to get their returns filed and clearance certificates issued. During this time, hydro, taxes and insurance have mounted up to the tune of close to $9000. Because the house was so substantially depreciated, the fair market value of the barest basic minimum repairs (7 years of gas to a fro to keep an eye on things, once per month grass cuts/twice per month snow plows during their seasons, restoration and re-shingling of the roof, basement pump outs and flooding repairs, storm damaged window repairs etc.) comes out to approximately $17,000.

    The heirs are starting to fight over the ongoing expenses. I said I'd drop the $17,000 maintenance but would like the gas, hydro, taxes and insurance to be shared. They are basically going to be saying, "You chose to keep the house and 80." They're yours! I'm saying, " I chose to buy the house and 80 and one of you said no!" And even though I asked one of you to mediate for the one that said no, nothing changed, the house and 80 remained in the name of the estate.

    So who's expenses are they?

    ReplyDelete
  9. My siblings and myself are beneficiaries and refuse to sign release. This has gone on for over a year and we have asked for further information about the accounting and have never received from executor.
    Now we have received a somewhat threatening email, with a date to have the release forms signed and sent to the executor and if not it will be forward for legal action. The executor has made this legal threat in the past but they never proceeded.
    What can we do now and does the estate incur the legal costs?
    If the deceased had GIC's should they not be part of the estate?

    ReplyDelete
    Replies
    1. "Forwarding for legal action" makes it sound as if they're sending you to a collection agency or something.

      If there is an impasse between the executors and the beneficiaries about the release, going to court is a logical step. However, don't consider it a threat against you because if you took them to court, it would be exactly the same step. What they are talking about is asking the court to pass their accounts. This means that if the judge thinks their accounts are fine, they no longer need your signature.

      But this works for you, too. You get to say your side and you might finally get the information you're looking for. The judge won't automatically pass their accounts - there is no rubber stamp - so they have to satisfy the judge that everything is in order.

      As part of this process, you can ask that they be denied an executor's fee, if you can show they were in the wrong about the accounting.

      The estate generally will not cover your costs. It will cover the costs for the executor if they win in court and the judge believes that they acted properly and in the best interest of the estate. It's not automatic.

      As for the GICs, they should be in the estate unless a) they were part of a registered plan such as an RRSP or RRIF that was left to someone, or b) they were jointly owned with another person who is still alive.

      Lynne

      Delete
    2. This comment has been removed by the author.

      Delete
    3. This comment has been removed by the author.

      Delete
  10. This comment has been removed by the author.

    ReplyDelete
  11. This comment has been removed by the author.

    ReplyDelete
  12. This comment has been removed by the author.

    ReplyDelete
  13. Good afternoon Lynne,
    First off we are unaware of what kind of GIC our grandparent had and the email we received only mentions the following:
    Interest from GIC (held for deceased by daughter also POA)
    I removed name's
    If the statement of account is indicating interest, then should we not assume that the statement should also be showing the actual GIC?

    ReplyDelete
  14. What is the cost for passing of accounts?

    ReplyDelete
    Replies
    1. There is no set fee that applies to everyone. It costs what lawyers charge, and that varies widely from place to place.

      Lynne

      Delete
  15. Hi Lynne,
    We are now being told or threatened that if we go to court for the passing of accounts, we are looking at a cost of$10,000 or more! Is this true or is the executor stating this figure as a scare tactic?

    ReplyDelete
    Replies
    1. It's possible that the legal fees would be that high, depending on how much work the lawyer has to do to prepare and how much has to go into the accounting, but it seems on the high side.

      Keep in mind that even if the legal fees are $10,000, there should not be an assumption that YOU have to pay that. I'm guessing from the question that you're a beneficiary rather than an executor, because this sounds like what executors say to exert pressure to get beneficiaries to sign. If that's the case, the cost of the passing of accounts should come out of the estate. This means that in the end, you as a beneficiary will get less from the estate, but you don't actually have to cough up that amount.

      Whenever you go to court, you toss the dice as to who is going to pay for what, but in my experience the fees for passing of accounts come out of the estate unless the beneficiaries are being absolutely ridiculous in their refusal to sign.

      Lynne

      Delete
  16. Hi Lynne,
    My brother was killed in a ATV accident down in Texas and he had no will, his ashes are coming back home to Manitoba and we we're wondering what and how do we proceed? We will have a Death Certificate and cremation certificate from Texas, but he was a Canadian citizen.
    Thanks

    ReplyDelete
    Replies
    1. How do you proceed? To do what? Are you talking about how to get his ashes into the country?

      Lynne

      Delete

    2. His ashes are back in Canada, as of this past weekend? We now need to know how to proceed with his possessions, finance's and paperwork that might have to be done, since he passed intestate!?
      Sorry Lynne, I guess I should have been a little more clear about my question.

      Thanks,
      Teresa

      Delete

You might also like

Related Posts with Thumbnails