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Tuesday, April 28, 2015

Why does the executor need the beneficiary's SIN?

If you're a beneficiary, has the executor asked you for your social insurance number? A number of beneficiaries have asked me over the years about why an executor would want that information. Most seem to find it very alarming. I recently received a note from a reader on this topic:

"My mother passed away 9 months ago. Shortly after, my stepfather who was happily married to m mom asked us for our SIN numbers. He said he needed them for her taxes etc. Something doesn't seem right...why would he need our SIN numbers?"

Most likely the reason he wants your SIN numbers is that the estate has earned income over the last 9 months and he wants to allocate it to the beneficiaries. Doing this will allow him to wrap up the estate more quickly. The SIN numbers are needed for the T slips. There is nothing suspicious or wrong about this process.

Normally I don't start a whole new post just to give a brief answer to a question, However, the question was asked on one of the threads on this blog that has 200 comments or more following my original post. Those that have reached 200 comments have a warning in RED that says if you post on that thread, I can't see or respond to your comment. That appears to be the limit of the system, as it's not my rule. Nevertheless, people post there anyway, and no doubt are annoyed that their questions have gone unanswered. I was able to retrieve this question from my inbox (which only shows the first two lines) because it's brief. At least, I think it's brief. If there is more to it, I can't see it! Please, please, please do not post questions on the threads that have RED warnings, because your question will not be answered.

12 comments:

  1. Excellent point.
    As the Executor I am involved with a beneficiary that has been withholding Estate funds for many years. The beneficiary is paying taxes and hopes that will solve the problem. I have alerted the beneficiary that I, as Executor, have an obligation to submit this to CRA to get final clearance. Lynne, you recently covered some of this in a previous post.

    ReplyDelete
    Replies
    1. If the beneficiary is withholding an estate asset that you need to collect, you may end up getting a court order that specifically requires him or her to hand it over. If he or she doesn't hand it over after that, it's contempt of court, and things get pretty serious. It could even mean jail time for the beneficiary.

      Lynne

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  2. Hi Lynne,

    Thank you for your incredibly helpful site!! Honestly, you've answered so many questions I didn't even know I had!

    I am wondering what an average amount of time a simple estate should take to 'execute'? (ie. no property, few possessions, mostly liquid)

    I don't want to pressure the executor unduly but I'm wondering how long some processes should take? I understand that it always differs, so just looking for guidance really... averages.

    Many thanks.

    ReplyDelete
    Replies
    1. I would not expect to receive the inheritance in a simple estate until a year has passed. In the meantime, however, I would expect word from the executor as to what's going on ( cashing in accounts, submitting tax returns, paying bills, etc). If the executor is willing, he or she may decide to do an interim distribution of some of the estate during that year, but the executor is not required to do so.

      Lynne

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  3. Greetings Lynne, and thanks for your blog. It has been providing me with a wealth of information. I have a question regarding the average costs to take an issue to court and ask for assistance. I spoke with an lawyer who indicated it could cost me $15-20,000 in order to seek an accounting or to seek the Court's assistance in any matter related to the Estate. That sounds a bit high to me. Does it to you, or is that the norm? I am concerned because I believe the executor is hiding information from me and don't know what to do. My inheritance isn't even $20,000!

    ReplyDelete
    Replies
    1. It does sound high. I've never charged that much, anyway. A contested passing of accounts can usually be done for a quarter of that. Many of them are wrapped up in a matter of one afternoon in court. Perhaps in your case there are many issues in dispute. If the case takes several days to hear in court, then the cost will add up very quickly.

      Lynne

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  4. Lynne. Why can't a lawyer get a Court Order to get Pass Accounts (Accounting) from a beneficiary who will not co-operate? What does a Court Order Cost? Thanks as always. Your Blog has been very helpful.

    ReplyDelete
    Replies
    1. A lawyer (on behalf of an executor) CAN get an order passing accounts without the cooperation of any given beneficiary. In fact, getting an order like that is the standard procedure when a beneficiary won't respond reasonably.

      The cost will depend on a number of variables. I've done contested passing of accounts applications relatively quickly and cheaply in Special Chambers (back when I lived in Alberta), but they can cost thousands of dollars more than that. Anything that is going to require witnesses, discoveries, etc is going to cost thousands - and possibly tens of thousands - of dollars.

      Lynne

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    2. Hi, I'm considering have the accounts passed and I was told it would cost approx. $4,ooo. Now I'm totally confused. I was led to believe there is a set amount set by each province and a lawyer can't charge more than that set amount.

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    3. No, as a general rule, the provinces don't dictate what a lawyer can charge. Perhaps what you're thinking of is that some provinces have a tariff that gives a guideline as to what a lawyer may charge for estate services. If so, you should know that the tariff only covers core matters that happen in every estate, such as applying for probate and preparing releases. It doesn't cover any contested matters such as passing of accounts. In addition, tariffs are guidelines and lawyers don't have to follow them if they don't want to.

      Lynne

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    4. So, if a lawyer decided not to follow the tariffs, he could charge a higher fee than the court requires for probate? How would the beneficiary know the estate is being billed more than the court fee?

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    5. We are talking about two different sets of fees here, I think.

      Each province has an amount set for a court fee. Either you pay that when the documents are sent for probate, or the lawyer pays it for you. The lawyer will then charge it back to you, dollar for dollar.

      When I said the lawyer can charge more than the tariff, I was referring to the fee the lawyer charges for his or her work, not the fee that the court takes.

      Lynne

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