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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.


14 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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    Replies
    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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  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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  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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