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Sunday, September 7, 2014

Executors can steal from estates with no repercussions in Canada - is this true?

Recently there was some discussion on a thread on this blog on the topic of what to do about an executor who is stealing from the estate that he or she is supposed to be administering. One of the comments made by a reader seemed to me to be right from the heart - an expression of anger, bitterness, and resignation. I want to share that comment with you here, and give some thoughts of my own about it.

Here is what the reader said:

"There isn't a damn thing anyone can do about it because the police call it a civil issue and the lawyers are VERY expensive. Basically with my experience Executors can do what ever they want with absolutely NO repercussions in Canada. It is rampant."

I agree with the last sentence of this comment, which is that dishonest and greedy executors milking estates are rampant. This is not to say that no executors are honest and none are trying to do a good job. Of course, there are plenty who are doing their best. However, there are executors all over this country who are mishandling assets, making egregious errors that cost the beneficiaries money, and in some cases just outright stealing from the estate.

Why is it so rampant, and what can be done about it? There are several factors which together create a perfect storm for a greedy or selfish person to take advantage of an estate.

The first factor is the choice of executor. I'm sorry, but at some point, some of you are going to have to ask yourselves why in HELL Mom or Dad put the one sibling in charge who is known to be a bully, or a gambling addict, or greedy. Parents blindly put the oldest child, or the only male child, or the one who lives closest to them on the will as executor without any consideration whatsoever of how that's going to work out. Part of this is a refusal by parents to admit their child's faults, part of it is an unwillingness to insult the kids by getting an independent third party involved, and part of it is that they are trying to do everything as cheaply as possible. If parents would only make more realistic choices for their wills, they wouldn't put their kids through so much stress, anger, frustration, and fighting.

Most parents out there should be thinking about naming a trust company as their executor. Yes, I do mean "most" because all of these executors who are stealing from estates are family members, usually the kids. Of course it costs money when the trust company administers the estate, but it costs money even when the kids do it, and giving up 3% to a trust company should be easier to swallow than giving up 75 - 100% to a thief. And if a trust company makes a mistake that costs the estate money, the regulations for banks and trust companies allow for the recovery of the funds.

Parents whose estates are extremely modest should consider naming someone such as a longtime family friend, cousin, or longtime business associate to work together with one of the kids as co-executors. Yes, they do have to agree on everything and that's not always easy, but at least you will have built in an extra safeguard. By the way, don't assume that your estate is too modest for a trust company. If you have a house, a car and an RRSP/RRIF, you are in the ballpark.

A second major factor that contributes to the ease with which executors ride roughshod over estates is that executors don't know what they are doing and rarely like to hear advice that goes against their preconceived ideas.

There is a widespread belief among executors that the will gives them full legal rights to do whatever they want. They move into the deceased's home, give away personal goods to anyone they like, use estate funds to live on for months or years, set up businesses and give loans to their family members with estate funds. By the time a lawyer or a banker straightens out that misconception, the executor feels that he or she has already gotten away with it, and sees no need to change anything. You would also be surprised at how many executors only tell the estate lawyer half the story and don't even divulge the existence of some of the assets.

A third factor is that beneficiaries let things get too far before they speak up about something. Many beneficiaries write to me on this blog and tell me that is has been years since the deceased passed away and they've heard nothing. Really, years? By the time the beneficiaries speak up, the estate is drained and the executor has spent the money, and no amount of litigation is going to bring it back. Beneficiaries are too willing to accept anecdotal information from friends or co-workers, or to accept everything the executor says because they think he knows more than they do.

This area is the one in which I think individuals can do the most to protect their interest in an estate. Ask for a copy of the will immediately. Insist on progress reports. Ask specific questions about specific assets, such as the selling price of the house. Know your rights. Talk to other beneficiaries, read blogs, see what local legal resource centres or seniors' centres have to say that can inform you.

As soon as there is a problem, such as the executor refusing to divulge information to which you are entitled, take action. You have a right to expect the estate to move along efficiently and you should let the executor know you expect that. Acting sooner can make the difference between a one-day court application to have a slow-moving or secretive executor removed, and a ten-week full-blown trial to determine where the money went. Acting sooner is more cost-effective as well as much more likely to catch mistakes or frauds before they engulf the entire estate.

When I say to act quickly, I don't mean to say that you should always sue the executor. Other means such as demand letters, mediation, negotiation, case management, or family meetings with an independent third party may bring about the result you want.

This brings me to the fourth factor that I want to mention: In our legal system, it costs money to enforce your civil rights. Not all of us have extra cash laying around to hire lawyers, and yes, lawyers are expensive when it comes to lawsuits. Aggressive and greedy executors count on the fact that the beneficiaries may not have the cash to hire a lawyer. Many executors have actually been known to threaten the beneficiaries that if a lawsuit is started, the executor will use the whole estate to fight it.

There are other options. The reader's comment that the police will say it's a civil matter is not universally true. I can say this from my own experience with clients who consulted me because the police were investigating them for executor fraud. It is true that the vast majority of estate-related issues are settled through the civil courts using remedies such as removing the executor, requiring passing of accounts, or ordering an executor to forego his executor's compensation. If you want the police to respond to an allegation of theft, you are going to need some evidence to go on.

Even within the civil system, some things cost more than others. The most expensive thing you can hire a lawyer to do is sue someone, especially in a complicated case involving a will and the grey areas of executor's responsibility and beneficiaries' rights. This is why you need to see a lawyer with plenty of experience in estate work who will think of other options to try before committing to a draining lawsuit.

In conclusion, I certainly feel for the reader who left this comment. Thousands of executors steal from their siblings and it's heart-breaking for each and every one of them. I honestly hope that the blog posts and books I write help parents, executors, and beneficiaries alike make some more informed choices. Would any of you like to add your two bits to the reader's original comment? I'd love to hear your thoughts.


  1. My brother was "handling" the expenses for my mom and aunt after my father passed away (without a will) in 2003. He set up a new account with my mom where he had signing authority, and gained signing authority on my aunt's account, after both were diagnosed with dementia.

    My aunt passed away in 2008 (with a will—all assets to myself, my brother, and my sister) and my mom in 2011 (without a will): it wasn't until 2013 that I managed to get all the estates into probate. As Estate Trustee, I then found that funds had been drained by my brother from all the accounts; most notably, from my father's account (jointly held with my mother; the bank had not been informed my feather had passed away): but the bank involved has refused to release any documentation concerning the transactions in question (transferring funds from my parent's joint account to the new one where my brother had signing authority) because more than 7 years has passed.

    It seems that my brother was stalling for as long as needed so that his theft of funds from my father's account would be so covered; and although I have taken the matter to the police, there seems to be little that can be done.

    Meanwhile, my brother lives in my aunt's house; my sister (co-executor with me on all three estates) lives in my parent's house, and both are refusing to liquidate any remaining estate assets so that they can be divided up equally. It seems that sale by partition for the properties is the only way forward (it has been longer than three years since the last principle owner passed away; my mother, who owned one house and had a half interest in the other), but, I have had difficultly finding a lawyer who will handle this matter without charging a large retainer up front... all of this occurred in a small town and as a result little independent headway appears likely from any quarter.

    Basically, almost all assets from the three estates have been diverted to my brother and sister, with little going to me even though I am an Estate Trustee: my sister has blocked any sale of properties or of estate assets. So it does appear to me that people who refuse to act honorably in estate matters can do so with virtual impunity, so long as they drag things out beyond the point where evidence is available for criminal charges to be laid.

  2. I agree with the reader. The Executor of the estate I am beneficiary to won't show me anything. I don't know about bank accounts or if there was a life insurance policy or anything else. . . completely in the dark. The attorney said the executor legally has a year to deal with estate issues before giving me an account. It has been almost a year and a half. It is very difficult to make contact with the executor and I think he purposely does not answer my calls. I wrote a letter, but did not get a response. Not sure what to do next.

    1. I don't believe that is correct. The executor has a year to administer the estate and gather all assets to a trust fund but you can ask for progress reports and back up documentation at any time.

  3. How can you find out if you are a beneficiary in the first place? Can an executor just never bother to contact a named beneficiary? It seems like there lots of ways for executors to not follow the will and/or break the rules without anyone finding out till much later.

  4. This comment has been removed by the author.

  5. I agree with the reader. I am involved in a case where we were refused information about the contents of a will, were forced to gain access to that information through legal representation, have had several orders placed on the executors who have not followed through on those orders and who have suffered no recourse for the actions, have taken money from the estate to give to other family members to put up as security for loans for new business ventures, have taken money from the elderly relative (very large sums of money) without ever mentioning it to that person or even asking for permission to do so and when asked why by lawyers responded "because I wanted the money", purchased big ticket toys such as snowmobiles, ATVs, expensive cars, etc., through estate funds, etc., etc.! We are no heading to 3 years of still trying to get through discovery phase because of many of their delays and not obeying court orders and are forced to represent ourselves because there's way too much cost for legal representation. All this while they continue to spend money that they did not have previous to the death of the elderly relative who they took advantage of while that person were still alive, spending money that they have moved in and out of various accounts and joint investment portfolios. I just want to take it to the Police but were told that they may not take on the case because it's too much investigation required and also that it would mean that the case would now be handled by them rather than the lawyers and be held up for a longer period of time. Me and my family just want to see justice done, we don't care about the money. We have even been told that because of the age of the executors, they would not suffer any consequences (ie. charges or jail time) for their actions. So, where in God's name in Canada do we find justice that protects this from happening to elderly people and their families? I have been searching for some support but cannot find it!

  6. Sadly agree with your reader's comment. I fought my brother for over four years while I suspected he was lying to me and stealing. The lawyer I hired didn't take my concerns seriously but finally got a court order for my brother to pass his accounts in November after I literally begged for it. My brother ignored the order and then admitted to me a month later that he'd drained the estate account and could not provide accounting. It would be pointless to pay money to hold him in contempt. There is no point spending more money to sue him, he apparently has no money to repay what he took from the estate. The lawyer suggested I press charges, and of course the police said it was a civil matter even though there was admission of theft over $5,000. My glimmer of hope that there would be consequences for his actions faded very quickly. My lawyer said my only option now is doing a "private prosecution", but couldn't help me prepare it and I have no idea even where to begin. Basically I paid my expensive legal bill and now am on my own, apparently with no real hope of seeing my brother punished for stealing almost $80,000 and never doing our father's taxes. I genuinely feel for all your readers who have found themselves in this unfortunate situation. If I had to do it all over again I can assure you I would not have been so trusting, and not being able to trust someone is a horrible thing.

  7. P.s what I truly don't understand is how if stole $80,000 cash from someone's home I would be charged with theft yet these administrators can steal large sums of money and it is almost impossible to have charges laid.

    1. I would like to hear some comments about estate PLANNING in advance. How does advance planning prevent much of this largely unreported theft of estates by executors? One way to do that is simple. Have as many assets, as reasonably possible, placed in a Segregated (insurance) fund account. In this way, direct named beneficiaries need not have to wait for the executor. One way this can be void is if client names ESTATE as beneficiary. I know there are companies selling executor insurance for executors, but this need can be reduced with the use of a Seg fund(IVIC), and the naming of the beneficiaries, other than ESTATE. Thoughts?

    2. It is possible to use financial instruments such as segregated funds, RRSPs, RRIFs, life insurance policies, and some others to direct funds to beneficiaries on the death of the owner.

      However, with estate planning, it's necessary to make each and every beneficiary designation work with the bigger picture. Someone who was considering using a fund as you suggest would have to consider a number of things such as taxation of the estate, whether the type of fund being used (e.g. if it were an RRSP) would be taxed and if so where the tax was coming from, equal treatment of beneficiaries, access to funds by minor beneficiaries before they are old enough to inherit, whether the beneficiary designation allows the owner to state an age of inheritance (usually it does not). These and other considerations must be thought out. It's also essential to compare the use of beneficiary designations to other vehicles such as trusts. It's impossible to say that any one particular method of doing something will work for everyone, or even for the majority.

      In terms of planning in advance, a huge proportion of the problems we read about could have been avoided if the testator had just admitted his or her kids weren't perfect and hired a trust company to be the executor.


  8. My mother passed away last month and already my sister who is both Executor and Beneficiary and had Power of Attorney has admitted she's given away, thrown away, or disposed of all the household assets to people not named as Beneficiaries. There are only three. Myself, my brother who cannot be located, and my sister. What can I do? I am also aware she's been spending copious amounts of the money while mom was in a Care Home that provided all her needs. Mom never paid 500.00 for a pair of shoes in her life, but my sister was using estate funds to buy expensive and luxury items for mom. Is there anyway to hold my sister accountable. She is already threatening to delay probating the Will.

    1. I think you are going to have to realize from the start that you are quite likely dealing with one of those executors I usually call Little Napoleons. She has no idea what she's doing and thinks she has much more authority than she really has. If anyone is going to rein her in, it has to be you. So you have to decide how important these things are to you. If you, like most people, find estate matters extremely important, you are going to have to hire a lawyer to enforce your rights. As a beneficiary you do have rights, and one of them is for the executor not to give away things that belong in the estate.

      I would suggest that because you are sisters, and because court procedures are extremely expensive, you might consider dealing with some of the issues by way of mediation. It's much faster, way cheaper, and a heck of a lot less antagonistic. It only works if everyone involved wants it to work, but your chances of that happening are much greater if mediation is suggested before you spend months or years dragging each other through the courts (and the mud).

      I don't know that you'd have much success objecting to luxury goods for your mother, since the money was your mother's and it was spent on her. If it had been spent on your sister, that's a different matter.

      In any event, I don't think this estate is going to be easy on you. Hang in there.


  9. It seems, then, that there is a consensus that those who have managed to position themselves to steal from estates can do so with impunity, in that it is extremely unlikely that the police will charge them with a crime. I suppose that the police generally direct their resources toward preventing crime, and this means arresting and charging those who would continue to commit crimes (or those who commit egregious crimes well within the public eye). So, with theft from an estate being a more or less "one off" kind of crime; and with this sort of crime relegated to the "private affairs" of "family matters" I guess the police have neither incentive nor inclination to charge those who commit theft from estates. It also seems to me that "proof of a crime" is a disingenuous defense on their part, since it is precisely their role in an investigation to uncover such proof; and if they are unwilling to put in the effort to do so, then there is no way it is going to happen. In my case, I suspect that there was proof of forgery in bank records that would have established my brother took money from an account he was unauthorized to access by forging my mother's signature; but by the time I caught on to this, the bank said that they were under no obligation to release the documents in question (seven years had passed) and the police declined to press the issue as it was, in their eyes, "a family matter."

    1. This is a very eloquent explanation of the reasons the police don't get involved. Add to this the fact that the police know the will and other probate documents are already in the courts, and that the civil courts are available to deal with executors (assuming the beneficiaries can afford to enforce their rights).


  10. Nonetheless, such situations are still very disconcerting — less so than that which defines the issue of Missing and Murdered Indigenous Women in Canada, but, in a similar vein of dismissal and inaction on the part of the police.

    In my situation, the complaint I registered with the police did at least result in them interviewing my brother and sister; and from this, I discovered another unaccounted $7,500 my brother had made as an unrecoverable "loan" to a friend.

    Having retained a lawyer (from a larger city near the small one where all of this has unfolded), at least a motion has been obtained for my sister to pass accounts in the estates involved — although she hasn't done so yet, and is now two months past the deadline she was given (yes, she is stalling again). Happily, the lawyer registered a motion of legal action against the two properties involved, so neither my brother or sister can do anything which affects the status of those properties until this is settled. I must confess, though, that I was much more hopeful before I read other peoples' posts here, that more or less say that a judge's order to pass accounts isn't necessarily going to make much of a difference if the parties so named refuse to co-operate... and if the only recourse there is to press for a contempt of court ruling, aren't we back to the same issue of whether or not the police will actually do anything?

  11. I was recently directed to an excellent column by Dr. Marcia Sirota on the topic of "Sibling Abuse." My reading of this article, in the context of my situation, suggests to me that: if someone is in a situation where a sibling seems to be engaged in an abusive relationship with an elder (a parent), then, you might want to suspect that abuse of by the sibling will be directed toward oneself, too.

    That was certainly the case with my brother and sister: 5 and 4 years older than I, apparently they never resolved issues centered around the attention I was given when I was born — attention they felt was directed away from themselves. So, they isolated my aunt and mom in the last stages of their lives, taking money out of their accounts — elder abuse — and now they won't settle the estates with me — sibling abuse — all in the attempt to compensate themselves for the attention they feel they were denied when younger.

    You can find the article here, if I can post a link in this forum:

    1. Thanks for that. Yes, the link works, and I hope people take the time to go read the post. Siblings are horrible to each other when they act as executors. They seem to see it as their chance to get revenge for any and every slight ever perpetrated in childhood. Of course I don't mean ALL executors, as some do just fine. But I do see an awful lot of really hostile sibling executors.


    2. Lon;
      This is the exact position I'm in now. 7 years difference and me as the baby. The worst part was watching my sister abuse my mom and seeing the helpless look on my moms face and knowing I couldn't do a damn thing. I've called police, OPGT, worked with CCAC, seniors' abuse officer....and no help from any of them. My mom is in a home now and my sister has spent over $5000. in 'clothing' for her. I have spent thousands of $$ on lawyers to no avail. It won't be a surprise to me when she walks off with moms entire estate. There is no help out there for honest people.

  12. Lynne, you and others advise people to be careful and responsible in their choice of who to appoint as Executor.

    But what about the lawyer drafting the will? Why is this person not professionally obligated to ask difficult questions in the course of creating a powerful legal instrument that could break apart and financially ruin an entire family?

    There seems to be an element of 'hit and run' the way legal experts are allowed to prepare these documents without using care or even common sense in doing the job.

    For example, it is astonishing to me that there is no requirement that a lawyer ask if the person to be named Executor is in chronic debt, has criminal convictions, or - even more important perhaps - is on speaking terms with the rest of the family.

    But lawyers are allowed to create these trustee time bombs in people's estate plans and remain safe from consequences because the damage done is not realized usually until decades later.

    And then grieving families are left to deal with the damage.

    I think there should be some requirement that a lawyer must investigate the risks he or she is creating while drafting a will and facilitating the appointment of trustees.

    Otherwise, what is the justification for charging a lawyer's fee for the service?


    1. Hi. I answered your question in a new blog post.


    2. Our 'estate attorney' hired LawPro the minute we brought several disturbing irregularities to his attention. He'd better get ready to write a big check otherwise this story is going to be all over the cover of the Toronto newspapers. He turned a blind eye, bought the Executor's bs and is now scrambling.
      Tell me Lynne, I know lawyers are only human as well, but why not pick up a phone and check with the other two beneficiaries to confirm what their impressions of what the estate should be worth or consist of, just to cover your butt? Or do they not teach you how to recognize a sociopath when you meet with one in law school?

    3. Lawyers don't "check with other beneficiaries" because the other beneficiaries are not their clients. Only the executor is the client. You are misled by the clause "estate attorney" (or, as we say in Canada, the estate lawyer) because you think it means the lawyer works for the beneficiaries. He or she does not. The lawyer works only for the executor. Hopefully you have all the facts straight before you go to press because right now, you don't.

  13. Start screaming at your elected representatives to start taking Executor theft much more seriously. Was happy to read that a woman in Peterborough who stole $25k from the beneficiaries had been charged in criminal court, which is a good start.
    Is it going to take the courts being clogged with these civil estate matters before someone does something? If an accountant stole money from his employer, he'd be in jail so fast his head would spin, yet name someone Executor and PoA for Finances and you might as well leave the safe door wide open.
    Good luck to those who can't afford a lawyer, because then you are truly - to use the proper legal term - screwed...The only reason I am able to take our Executor to court is because I have the finances to do so, but why should it cost the taxpayer $25,000 to handle what the criminal courts should be addressing? We have the paper trail, so exactly what IS the problem??

  14. The problem is that the Executor has been royally screwed over by their own sibling who received $250k+ by their mother while the Executor, who did nothing wrong, repeat nothing wrong to their parent, got a big fat $000000. To all those dishonest, scumbag daughters/sons out there who wondered why their parent appointed their sister/brother Executor, why not check how YOU blew through all the money their parent left you? But denial is vast & im sure you will all justify why you weren't named Executor! Dishonest, toxic, cancerous sibling(s)!

  15. My grandfather (widower) had three children but one predeceased him (my mom). He made a Will naming his 2 surviving children (per stirpes) as joint executors and beneficiaries of everything.

    Would I (as an only child) have a legitimate claim to what would have been my mothers share if she was alive? And if so, is there a time limit on me taking action?

    Does it make any difference that his Will named only the two surviving children?

    Thank you


    1. Scott,
      Based on what you've told me, you have no claim to anything from your grandfather's estate. He was not obligated to leave anything to your mom because she was an independent adult. Parents are not required to leave anything to their kids if they are adults and are not disabled.


  16. My grandmother died in 2010
    Her daughter was suppost to be the executor.
    She died misteriously and anne m. Silverman some how became the executor. About a year or so back (2015?)I recieved a call from David silverman who called me from a florida number and advised me I would be recieving a check for $300 canadian dollars wich I thought was rediculous seeing as how my grandmother was quite well off. So he advised me to call his sister and to never call him at the number again. Well since the law firm of anne m. Silverman is no longer in business. Its like they dropped off the face of the earth. And the check I recieved is uncashable.

    My question is Do you know of anne silverman or david silverman ? Does or did their firm ever exist? And is there a way I can get in touch with either? They are listed on a few canadian law firm sites but says they are not in the database.

    Thank you for your time.

    Sincerly, Micah Militello.

  17. My older sibling somehow stole the entirety of my mom's estate (from my dad) and the inheritance he left in the exact amount as he left for my sister.

    I was too young to even comprehend that anyone could do that but, it got worse. Her and her husband then bullied mom's house away from her, exploiting her as a disabled person with a communication limitation, as well. Then, they moved her w/o letting anyone know where she was for SEVEN years!

    By that time, she had mom seen by doctors who didn't know her, didn't bother to get her medical records and they thought she had a brain problem. They threw her in a home.

    I had to fight like hell to get my mom placed someplace safe and everyone knew what she did and wasn't correcting but no one did diddly on the estate side.

    I think we should have laws that are Federal and prosecuted by gov not personal lawyers.

    It makes it feel like the whole world never cared to be honest to just leave it like this.

    It is a crime that keeps repeating w/o the initial $ too because the continuum of life has been violently destroyed. I mean these fraudulent bullies who cause this sh-- are putting others into poverty from greed with legal gov tender. It's not just the fraud, it IS an act of violence for a sibling to go against their parents knowing it will cause (particularly though it's wrong either way, ill people) to live in a way that makes them suffer and, makes them helpless to quickly recover from an attack with such theft. I see no difference between stealing birthright money and severing someone's spinal cord; the injury is paralyzing and long term to turn it back before the attack happened.

    The theives in these cases are ignored largely because gov sees it as a family issue. I disagree that that definition will ever reverse it for victims now and prevent it from happening to others.

    Legal gov tender is only a tool for our free society to function harmoniously.
    The gov, themselves, must stand up and send a strong message about being in the fight to protect the use of this tender from those who abuse it and misuse it for the sole intent of causing others grave physical harm.

    If corruption ever has a chance of stopping, it's going to have to start with gov speaking to the public about it and bringing as many past abusers who got away with it, to justice. Stricter laws. My sister just forgerged my signature and went to a bank teller who didn't know her and, in the blink of an eye, my parents dreams for me were decimated along with mother's freedom and health. (My sister also took my mom to a quack dentist who pulled all of her healthy teeth to make it harder for her to talk to anyone about what they did to her....scott free!)

    I'm never going to forgive her for it.


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