"Is it legal within Canada that the executor can refuse to let beneficiaries know what their expenses are, and also refuse to show bank account statements unless the beneficiaries sign release of funds documents? My brother is saying that he is not obligated to show any accounting until he is ready to disperse money. Is he lying?"
I couldn't say for sure whether he's lying, or whether he's simply mistaken, but in either case, he's wrong. An executor must be prepared to produce an accounting for residuary beneficiaries at any time. By "any time" I don't mean that the executor must produce it five minutes after being asked, but he or she should be able to provide it to the beneficiary in writing within a reasonable number of days.
The requirement to account arises from the fact that the executor is a trustee and fiduciary. The executor doesn't own the estate or the assets of the estate; he or she is simply a custodian and manager of the assets. The estate belongs to the beneficiaries and therefore they have the right to ask what is going on.
In my view, the beneficiaries have more than a right to ask what's going on; I believe they have an obligation to ask. There are no executor police. There's nobody at the court or in the government whose job it is to check up on what executors do. It's up to the beneficiaries to ensure that the executor named in the will is actually doing what he or she was appointed to do.
Having said that, let's look at it from the executor's point of view. It's not reasonable for beneficiaries to ask for every receipt and expense as the executor carries out his daily tasks. There are not enough hours in a day for an executor to report on each and every step he takes, as he takes it. Nobody has time to make or receive that many calls and emails. I always urge executors to set up an email mailing list for the beneficiaries, and to send a summary every two weeks, or once a month once things slow down, to keep everyone informed.
While an executor is not entitled to keep bank statements secret from residuary beneficiaries, the beneficiaries do have to let him get on with the work with some level of trust.
The normal procedure in most estates is for an executor to provide a full accounting at the end of the estate when he is ready to write the cheques. Perhaps when your brother was told this by the estate lawyer he took it to mean that he doesn't have to do anything different.
This doesn't mean that he can do as you said, which is "refuse to show bank account statements unless the beneficiaries sign release of funds documents". He has to show the statements and the rest of his accounting first. How on earth could a beneficiary approve of his transactions if the beneficiary isn't told what those transactions are? He has that bit backwards. Generally the accounting and the release document arrive together, at the end of the estate administration, but beneficiaries should not sign releases without studying the full accounts first. If he does not provide an accounting first, he can be compelled by the court to pass his accounts.
The fact that you asked if your brother is lying is proof of something I tell executors constantly - hiding what they're doing only causes suspicion and speculation. They just need to be open about it.
Is there a standard release form? Where can the Executor get one for Ontario?
ReplyDeleteNo, there is no standard release that applies to everyone, everywhere. They vary from province to province. In Ontario, try this page from Ontario court services that contains pre-formatted forms prescribed by the rules of civil procedure:
Deletehttp://www.ontariocourtforms.on.ca/english/civil/pre-formatted-fillable-estates-forms.
Lynne
Lynne,
DeleteThanks for the link. While the site contains many useful forms, as far as I can tell, it doesn't include a release.
Lynne my wife,s mother passed away in april 2017 and her sister was executor of their moms will and it stated in the will that everything was to be distributed evenly between the 2 sisters. well when it came time to do this the executor told my wife that their mom wanted to give 5000 to three grandchildren one being our daughter but this was not in the will and also we know that there was money invested but were told by the executor that she does not have to provide bank statements as was asked for by my wife can you elaborate on this and is there a timeframe to contest this.
Deleteyes please send any advice to email above
DeleteNot sure if you got the message on my question but i will retry.
DeleteMy wife,s mother passed away in april 2107 and her sister was executor of the will and in the will it stated that everything was to be divided evenly between the 2 sisters but when it came time to do this the executor said that before he mom passed away she wanted to give 3 grandchildren 5000 each with our daughter being one so she went against what the will said and we believe that wasn,t true because she had 2 kids and just wanted to give them something. my wife has asked for bank statements but was told that she the executor didn,t have to provide them.we know there were investments so if possible can you give us any information on this and is the executor legally bound to provide this information and is there a time frame on contesting.
Your sister in law is wrong in pretty much everything she has said. She cannot give money to people who are not in the will. If she wants to give money to the grandchildren, she can do so out of her share. If she persists in giving out this money, legally this can be recovered from her personally.
DeleteThe executor should be providing the bank statements. Your wife is a residuary beneficiary and as such is entitled to a full accounting of the estate. If she will not respond to a written request from your wife, I suggest that your wife hire a lawyer to make the request.
If she still won't give up the statements, at that point you must conclude that something fishy is going on because there is no reason for her to withhold them. If it goes to court to force her to give up the statements - and I think you'd win on that - the court will award costs against her for being so uncooperative.
No, there is no specific deadline, but keep in mind that once the estate money is given out, it's a heck of a lot harder to get it back than it is to prevent it going out in the first place.
Best of luck,
Lynne
If you want me to write an email to you giving legal advice, call my assistant and give her your credit card number. I don't work for free.
DeleteLynne
Lynne
ReplyDeleteAs I have previously written I have the opposite problem, a beneficiary that is withholding Estate monies and won't provide financial accounting. A Trial date has been set to get that. To me there is absolutely no question that the beneficiaries have a right to financial info from the Executor. What is there to hide? I happen to be a beneficiary as well and I want that info. It is difficult to believe/understand the BS that goes on with this and the games being played, This includes 'lawyers' as well.
I have two residuary beneficiaries that are 'Ridiculously Difficult' to deal with and won't even give out an address and keep changing their phone numbers. They 'both' live in another city (same city) in the province and don't seem to be interested in signing off or returning emails (email is ALL I have in terms of contact info for these two).
ReplyDeleteAs executor what should I do? Should I 'pay' to have a lawyer in that city hold on to the cheques and releases for both of them until they come in to sign or should I just do it like everyone else does (get a release, send the funds, kinda' thing.)
Heck, I don't even know what these people look like, so I would assume that I'm going to have to get them show I.D. in the scenario above. I suppose I could also put the money in Trust for them until they finally decide they want to be 'found'. Either way, I'd like to get these two clowns to sign releases so I/ (we all) can get on with our lives. I suppose I could always ask the court to approve the accounting, but I'd rather not cost the Estate anymore than it has, especially since I'm basically at the home stretch in terms of finalizing this Estate.
I am dealing with residual beneficiaries that claim it is their right to see the other parties signed releases before they sign theirs. Is this a legitimate request under Estate Law as they claim it be. I can only find that the Executor is to receive all the signed releases before funds are disbursed. Any assistance would be appreciated.
ReplyDeleteNo, I wouldn't consider that to be a legitimate request and it certainly is not the law. Residuary beneficiaries are entitled to a full accounting of your transactions on the estate, which don't appear to be in issue. Seeing the other people's releases doesn't add anything.
DeleteLynne
I am in BC, and going through the same thing. Two beneficiaries have signed releases, but the third wants his (Ontario) lawyer daughter compose his complete release. In it, she is saying that he will be excluded should additional taxes/fees be accrued, he will be exempt, if they exceed the holdback, ($4,000.). We have told him that we are willing to sign a legal document that any additional costs will be paid in the same percentage as the residual funds are to be distributed-him 50%, my sister and I at 25% each. Taxes have all been paid and right now he is the only one adding costs to the minimal estate of $225k. He is paranoid that future taxes will be in the hundreds of thousands of dollars and thus, we cannot get even partial distribution. The deceased relatve was a mentally handicapped woman who was a ward of the court, and incapable of ever holding a job. It has been 3 years since her passing, and like others have mentioned, we, and the executor, just want to get on with our lives.
DeleteHi Lynne,
ReplyDeleteMy youngest brother is the executor of our mother's estate. We were quite shocked when we found out he is going to be paid for being an executor of the funds from the estate (50 - 75K), as it was never mentioned till quite later on. He actually did very little on his own other than shovel sidewalks, cut grass etc. until the house was sold. He did get all the assets and liabilities together for the estate lawyer. The house and garage were quite a mess and had so much stuff/junk in them that it took from October to July to clean out which we did on weekends when we had free time. My wife was not working so she did all the research on how much certain items were worth so they could be sold. Myself, my wife and my other brother spent many hours helping our executor brother with all of this. Are we also entitled to be paid for our time?
Thank you Lynn for that advice much appreciated it helps immensely
ReplyDeleteIf the executor does not provide sale reciepts, invoices and contractsthen how can I aprove the financials the executor said he lost them.
ReplyDeleteThe lawyer sent me an email stating the executor is ready to release the estate funds if I sign an agreement form but I cannot prove the financials and the executor is asking 10% of the estate.
Should i see a laywer?
Most of the time, executors provide a summary of what has happened and does not provide all receipts, invoices, etc. But that doesn't mean you are not entitled to see them; you are entitled to.
DeleteAlso, 10% is double the allowed maximum of an estate, unless of course there has been something unusual such as litigation during the course of the estate.
If he won't provide the information and you can't get it out of him any other way, then yes you'll probably have to hire a lawyer to help you.
Lynne
Does an executor have to provide bank statements from before death? While he was on joint with the deceased? Also she is claiming the joint account was hers because of right of survivorship.
ReplyDeleteHello Lynne
ReplyDeleteI am having the same problem you wrote about, I made a friend of my father an executor of his estate after he passed away, I do not know him, but I didn't have anyone else, and he was the power of attorney, and he told me he wanted to be the executor.
Well as soon as the papers were signed he just went on selling everything the way he wanted without my consent.
Now he wants 10% of an already small estate, and he cannot produce a full set of financials, and he said he has done many jobs, like cutting the lawn etc.
Basically I think he could have asked me if I was willing to pay for those jobs before he did them, and because this estate is three provinces away from me, I really have no proof that he did what he claims.
Could you recommend something, or someone who deals with clients that live in another province, also would a lawyer take his payment from the estate or do I have to pay the lawyer up front.
Hi. Lynn
ReplyDeleteThe executor has not sent me the complete financials.
The first layer passes away, the lasers son emailed me that he was taking on the file.
I told the son of the first lawyer that passed away that I could not sign the release form his father sent me as I cannot approve the financials, as there are missing reciepts, and statements.
The 2nd lawyer emailed me saying he is not experienced enough to take on this file, and sent it off to another lawyer.
So in the mean time all of this is costing money.
The third lawyer sent me a release form to sign first lawyer to pay $1600.00 plus tax, 2nd lawyer to pay $1000.00 plus tax, and third lawyer to pay $700.00 plus tax.
I email the third lawyer with the same request to review the financials, I asked to see the receipts, that correspondent with the cheque written by the executor.
I just received an email with an added $1000.00 to the third lawyer, and told if I don't sign the release form, the executor has instructed them to go to the master of the Queen's bench for approval.
Gosh all of these lawyers, and already 5 years past, this is a small inheritance only $30.000.00.
I got really suspicious when the executor told me over the phone that he new the tow truck driver and that he would pay $50.00 dollars, but when I told the executor that he will have to produce reciepts before I would approve the financials, then he did produce a reciept but not for fifty dollars it was $350.00.
also when the accepted it was selling the house somehow the wire that was interested called me on my home phone and offered to pay me some money under the table to get the house for a cheap price, she did not know what she was talking to the beneficiary.
I thought this was kind of odd and that something was obviously going on behind my back as the executor was trying to coerce me into selling the house for very cheap to the neighbour and this person that called me was a friend of the neighbour.
also the executor sold a truck that I initially wanted $3,500 for I lowered the price to 2400 to be sold as is.
the executor went and did $1,100 and repairs in that truck plus he did a safety plus he sure the truck in his name and sold the truck for $2, 400.00
use the kind of things that the executive was doing I told the executor you had no business to sell the truck as is for $2,400 that he needed to add $1,100 and repairs the amount he paid for the safety and the amount he paid to ensure that the truck so that I would not be at a loss this was not done and this is another reason why I am suspicious that the executor is doing things behind my back.
There is a missing snowblower the executor paid $3,500 for a cremation there's a $1,500 administration fee in the invoice that I received when I asked for a breakdown of this amount he said that the funeral director would not give me a breakdown and I thought this was kind of odd this is a small town where everybody kind of knows each other and the executor is on the board at the church and no kind of things like this.
because the executive gave me such a hard time and forcing me into selling the house so cheap and selling the vehicles and everything else the yard sale that prices that he wanted that its Outlook to me that he was selling everything very very cheap and maybe profiting himself.
Ready right now I received this email from the third lawyer and everything just seems to be going up and up and up and I don't know what to do do you have any suggestions I really like to hear from you.