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Saturday, November 22, 2014

Beneficiary and executor at a stalemate over signing of Release

I often receive questions about the release forms that are to be signed by beneficiaries. Here is one from a reader that I've heard more than once, that should be of interest to many of you.

"Is there a standard release form ? I have obtained one from my Estate lawyer and one of the beneficiaries will not sign - as the form states "Received" and her take is that she has not received the funds, so her lawyer has changed it to "to be received" and added in codicil items. I don't want to accept it with those changes, as it is not a clear release for me, as executor."

There is no standard release form for everyone. In each province and territory, there is a form of release included in the Rules of Court, and this form is supposed to be followed in order for the document to be suitable for filing in the court. However, it is well-accepted law and practice that all legal documents must be tailored to the individual situation. Lawyers are expected to make the documents fit the case, not the other way around.

The situation you're describing is one that I've encountered before. The beneficiary won't sign a document saying they've received something they haven't received, because they don't trust the executor to deliver the funds. The executor doesn't want to sign something saying that the funds are to be delivered because then there is nothing showing that the funds have been paid, and he doesn't trust the beneficiaries not to sue for the supposedly non-received money.

It's a stalemate if nobody is willing to take a leap of faith.

Parents who appoint one of the kids as executor should think about the dynamics between their children, because this lack of trust in each other manifests frequently between siblings.

The only way to protect everybody in this situation is for you to show up with a) the release that says the funds have been paid, and b) the cheque for the beneficiary. There is a simultaneous exchange. If you have to charge travel expenses or the estate lawyer charges additional legal fees to make this happen, it comes out of the general estate and all beneficiaries receive a little bit less.


25 comments:

  1. I am an executor to an estate in Alberta, these are the problems I'm having firstly was told by funeral director he would sell the body for $2000 to anyone and give them the death certificate. I went to another funeral home and got treated with respect and dignaty for the deceased reported the other funeral director. secondly my friend lived with a room mate, but 2 mnths before his death he left. He died in that room , we do not know why he was there RCMP were called his room mate told one officer she was living common law with him he told her she gets all his assets including a van that was registered under the estate. they informed me I need a court order went to court house said they had never heard of this and what is wrong with the police.put the officer under report got told the RCMP only follow two laws civil or criminal. The estate law was provincial they only listen to fedral law this office became the executor and gave everything away so that means a will is a waste of money and the wishes of the deceased are ignored.thirdly his bank account was frozen , he had an overdraft the bank allowed his pension to come in to pay for the loan after 20 days after his death. I am fighting the bank right now cant afford a lawyer all assets are gone and bank took his final pension. No help anywhere every one passes the buck, can't go to probate, to even show that he had a loan with the bank. I plan to get money from the bank then pay for a lawyer to sue the police officer for loss of the assets. I just wanted to tell my story on how bad it can get .

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    1. I'm having trouble understanding a lot of what happened to you. However, one thing that's clear is that a person who is the common law spouse (in Alberta called an adult interdependent partner) is in fact entitled to inherit when his or her partner passes away. I don't understand why people are taking estate advice from the police, or why a will wouldn't be followed if it was valid. I don't see how you can sue a bank for freezing a deceased person's account, and banks don't take people's pensions. I know you want to tell your story about how bad it can get, but it seems to me that the only reason it's this bad is that you have no idea whatsoever what you're doing, or what other people are doing, or who to listen to. If a government office has been named as executor, then for heaven's sake put aside some of the antagonism and distrust and actually listen to what people are saying. They have lots of experience in this.

      Lynne

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  2. where do I get a standard release form for British Columbia

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  3. I don't believe there is a standard form of release in BC. The forms prescribed by their Rules of Court don't include a release, which indicates that lawyers have had to make up their own for their clients. Something you could check out is the BC Probate Kit from Self-Counsel Press. Here is the link: http://www.self-counsel.com/bc-probate-kit-531.html

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  4. Is there anywhere I could at least view a sample beneficiary release form? We are in Ontario, finally have a clearance certificate, just have to draw up the release form for final distribution of the assets of only one bank account, nothing more. This release form is amazingly hard to find. The link to the BC Probate Kit in the comment above dated May 11, 2015 does not work. Please and thank you.

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  5. I am an executor to my moms estate. My sister is not signing the release form. Should we send another letter to her requesting her signature or are there other options? She has already received partial payment. I'd like to know if the estate, the executor or my sister would have to pay for her legal counsel, so far she has none. She is just doing nothing, no response to the the sign off letter.

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    1. I'd want to know why she isn't signing it. Is she refusing to sign it because she disagrees with it, or has she just not got around to it yet? These two possibilities would each come with their own ways to respond.

      If she is disputing something in the accounting, perhaps the best way to approach it is to advise her in a letter of a deadline for responding, after which you might apply to the court to pass the accounts, which makes her signature unnecessary.

      If she is simply not responding at all, that's another matter. Sometimes people are simply preoccupied with something else (an illness, for example). In other cases they deliberately hold up the estate because they are upset with what they received or with how the estate was handled. In any event, it's just not fair for one person to hold up the estate for everyone. In that case, passing of accounts is also an option, but you could choose other routes. You could pay out the other beneficiaries and then put your sister's share in a bank account. You could pay her share into court and send her notice that when she wants it she can apply to the court for it.

      And of course you could just send her a cheque without a release being signed, though this would not protect you as a release or a passing of accounts would do.

      If she hires a lawyer to dispute the accounting, the question of who pays her legal costs depends on a few factors. If it makes it all the way to court (and not many of them do) then the judge will decide who pays the costs. The general rule is that whoever loses in court pays their own costs plus that of the winner. If the matter does not make it to court but is settled after some negotiation or mediation, the usual scenario is that each pays his or her own lawyer, so the estate would not pay hers.

      Lynne

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  6. My sister is not responding to our lawyers request to sign off on my moms estate. We are all waiting to get the remainder of our share of the estate. What can we do? Also, if she gets her own lawyer, does the cost of her lawyers fees come out of the estate?

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  7. Thank you for your insight. I found it most helpful.
    Unfortunately my sister was very unhappy with how my mom remembered her in her will. I think my sister is responding to this by simply not responding to our request for her to sign off on accounting.
    We have received no contact from my sister or from a lawyer representing my sister.
    Your reply has given me something to consider.
    Sister

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  8. Hi Lynne,
    I have received three of the four release of accounts forms from the beneficiaries of my moms estate. Three separate letters have been sent to my sister
    and each letter has included a copy of the accounts. A deadline was included for her to respond by. I am in
    the process of sending her a fourth letter but this time sending it registered mail. One of the beneficiaries is pressing me for their share of the estate. If I decide to pay out everyone's share of the estate and my sister does not cash her cheque what could happen? There is a clause included in the will that states if anyone contests the will their inheritance in reduced to nothing, is this legal?
    Thanks Lynne, I am frustrated by the lack of response from my sister. She is estranged from the entire family and no one has any contact with her.
    Thank you,
    Signed Frustrated sister

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    Replies
    1. Hi Sister,
      It's really not fair to everyone else in the estate when one person doesn't respond, and holds up the entire process for everyone. Since nobody is in touch with her, it's impossible to know whether she is deliberately ignoring you or whether she is sick, out of town, or who knows what.

      As I see it, there are a couple of options to consider.

      One is that in your registered letter you advise her that you will be paying her share into court since she will not claim it, and if she ever wants it in the future she can go to the court and try to get it.

      Another option is to ask the court to pass your accounts so that her signature is not needed. That will take a while and will cost some money, but it will clear you without having her co-operation.

      If you pay everyone out except her, there is always a possibility that she will contest your accounting. She could be the one applying to the court to pass accounts, saying that you have done something wrong. However, there has to be a reasonableness test applied along the way. If she has a problem with the accounting, ignoring your letters isn't going to solve a thing. That's not a reasonable way for her to behave. Therefore each time she ignores a letter and more time goes by, the less credibility she will have for objecting to your accounting. You will have to decide for yourself what risk there is.

      Yes, a clause stating that someone who contests the will gets nothing can be valid. It will depend on the specific wording. In particular, the clause would have to say who would get the share of the contesting person.

      There is a lot in your note to discuss and I've barely scraped the surface. Hope this helps.

      Lynne

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  9. Hi Lynne,
    Thank you! I appreciate your help!
    I am interested in leaving my sisters share with the courts. I am afraid to send a cheque and have her not cash it and it go stale dated. Is there anything specific I should do or know before I go ahead and have the courts hold her share? I was considering sending her one more letter telling her that share is with the courts and she can get it if she wishes. I am in Ontario, do I just go to the court or should I get a lawyer to help?
    Thank you Lynne.
    Signed, Hopeful Sister

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    1. I think I'd send that one last letter telling her it's being paid into court. That's because I do see a lot of estates where a person thinks that if they just don't answer, they are bringing the entire estate to a halt. If she is doing that (and I realize we don't know for sure) then this is her wake-up call.

      Why don't you go down to a courthouse and talk to a clerk of the high court (not provincial court) and have a chat about what you have to do to pay it into court. Take notes, and ask for specific forms. If it seems like something you could reasonably do on your own, then go ahead.

      Lynne

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  10. Hi Lynne,
    Sorry to ask another question...I am looking online about how to set up an account with the courts to hold my sisters share of moms estate...I am unable to find anything. Is there a special term or specific word I should be looking up?
    Thanks again Lynne:)

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    1. You cannot set up an account. You have to go through a legal process through the courts so that there is some kind of order allowing the funds to be paid.

      Lynne

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  11. Please tell me where I can find a sample Release Form for Ontario as a guide on how to send this to the beneficiaries to settle an estate I am executor for. Thank you.

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    1. Actually, I don't know where you can find a sample one online. This is because the form is not prescribed by law so lawyers make them up themselves in the form they want. The good part of the form not being prescribed is that you can adapt one you find from another jurisdiction.

      Lynne

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  12. Hello Lynne, My brother died in BC recently . I am the executor and all the beneficiaries are in Ont. The estate is small and did not have to get probate but sign idemnification for the Bank. I am trying to do it myself and wanted to know if there is anything I have to do because he died in BC. I am going to do the acct statement and get tax clearance and release from beneficiaries? Many thanks.

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  13. Also would like to have a sample of release as the link from before did not work.

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  14. I am a beneficiary and the executor has prepared an interim disbursement of the estate of the deceased person. I received statement of accounts along with a release form for the interim disbursement. I am to sign this and thus unbind the executor from all his duties and responsibilities. I am living outside Canada, so a meeting in person is very difficult. I am to sign this document prior to the disbursement. If I sign this, how can I be sure that the executor will ever complete his job and pay taxes from the estate withheld and finally distribute the remainder later on?

    ReplyDelete
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    1. The release that you are being asked should cover only what the executor has already done. It does not release him from anything he is required to do in the future, such as paying tax.

      If you do not trust the executor to send the interim distribution cheque to you, ask him to send it to your banker. Arrange with the banker that you will hand over the signed release at the same time you pick up the cheque.

      Lynne

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  15. Could you not add in a clause. It is understood that this is not the final disbursement and that the executor will be required to pay any outstanding accounts including taxes before the final distribution and to provide evidence from the CRA that they are satisfied that there is no further tax owed by the estate.

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    1. Yes, you can add extra clauses, assuming that the executor will agree to include them. It is the executor's lawyer who drafts them, after all.

      In some jurisdictions, the form of the release is mandated by law, which means it comes with standard language. However, even that does not mean that an additional sentence cannot be added in order to tailor the document to the situation at hand. It won't invalidate the release, and it just might resolve the issue.

      Lynne

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  16. Hi Lynne
    I have found your site very useful so far. My grandmother passed away around a year ago and Me and my brothers were named beneficiaries in the will. My aunts who are the executors of the will have pretty much done what they wanted with the estate including one paying their sons huge amounts of the estate to renovate the house supposedly to sell the house. Than they sold the house for a huge loss because they took the first offer because they wanted to be done quickly. My first question is are they allowed to do this without anyone permission? They also want me to give my brother permission to sign my beneficiary release or they need me to come sign in person. Am I allowed to do this without seeing the release stuff first. Can't they just mail the release and I can send back? I live over 5 hours away and can't just stop by to sign. They also say they can do what they want because my grandmother had a clause in her will that if anyone challenges they no longer have claim in the will. Does this could with the executor stuff too? Just trying to get info before I do anything.

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    1. There is a lot going wrong here. Is anyone actually using a lawyer?

      Executors are entitled to renovate a house to increase its sale price. Unfortunately, in this case there was a huge expenditure without increasing the price and to make things worse the wasted money went to an immediate family member of the executor.

      In my view, the executors are liable for the loss. I mean personally liable. At the very least they should not get an executor's fee and if that doesn't cover the loss, they should have to repay it from their own resources. They used very poor judgment and the estate suffered the consequences. You might consider hiring a lawyer to help you deal with that.

      As for the release, no! Nobody can sign it for you unless you have given them power of attorney to do so.

      Of course they can mail it. Sometimes executors say they won't mail it because they are worried about the exchange of money at the same time as signing releases. IN other words they are afraid you'll take your money and not sign the release.

      Do not sign a release without reviewing the executors' accounting carefully. If you sign the release it means you agree with everything they've done on the estate, including dealing with the house. If you sign the release you can never raise the issue of the loss again. If you're okay with them losing that amount of money from the estate then go ahead and sign but otherwise, don't sign it until you get satisfaction.

      These executors cannot possibly be working with legal advice because they seem to be doing a terrible job and trying to get you to sign off quickly before you realize what your rights are.

      Lynne

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