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Friday, July 1, 2016

So, you think it's a good idea just to handle the estate yourself without telling the executor?

Even after all these years, I am astonished at the things people take into their own hands without even a clue about what they're doing. Legal rights are tossed to the wind when someone thinks they know a cheaper or easier way than the law prescribes. I know that sometimes people get away with these things because nobody else objects or realizes what's happening but that doesn't make it legal.

Recently a reader wrote me a note that literally made my jaw drop. He or she decided not to worry about small details like not being the executor and just barged forward with the estate, regardless of rights or laws. Read on for the reader's note and my comments.

"My father passed away. I am not the executor, a relative is, however I am just doing it myself to save money as everything was straight forward and I am paying all bills as they come in. I felt there was no need to probate. So far I have issued one cheque to myself and one to my sister in equal amounts, (as will states it is 50-50 between us) and we are leaving several thousand in the account to cover bills as they come in. Question we have just received a cheque to the Estate of my Father, so don't know what to do with it. Can we open an estate bank account if we did not probate and are not the Executor?"

What on earth are you thinking?

None of the things you've been deciding are legally your decisions. You didn't think probate was necessary? That's not your call. You didn't hand over the will to the executor? That's not just heavy-handed, it's unlawful. YOU WROTE CHEQUES TO YOURSELF?

I simply cannot believe how people stumble through these things without either landing in jail or being sued for everything they own. I suppose the worst doesn't happen simply because the other people around you don't have any more of a clue than you do and just let you get away with it because they don't know any better.

No, you can't open an estate bank account! Why on earth would you be allowed to do that? Do you honestly think just anyone can open an account for other people's money? Just to be clear here, you have absolutely no legal right to accept money addressed to your father's estate, nor to open accounts for him, and certainly not to write cheques to people out of his funds.

Naming someone as an executor is not just filling in a blank on a piece of paper. It conveys a legal right and a legal responsibility to fulfill the directions in the will. Your father chose someone to look after his affairs and it isn't you. You have simply stepped in and removed the executor's legal right to administer the estate because you felt like it. The executor could sue you for that. Does the executor know this is happening? Is he or she allowing the estate to be carried on by someone else with no legal authority? If so, you may have placed him or her in a dangerous legal situation as well.

Seriously, fix this, okay? Stop trying to open an estate account before the bank catches on to what you're doing and shuts everything down. Get together with the executor and hand over the original will and all your paperwork. Let the executor figure out how to salvage the situation and hope that he or she doesn't decide to sue the pants off you while setting all of this straight.

21 comments:

  1. Lynne
    This one sure takes the cake. I am an Executor and I am going through Estate Hell. I don't understand how he has been able to fool so many people for so long.Estate Laws do exist.
    Getting a lawyer to sue another lawyer in a small city is not easy. They look after each other. I speak from experience.
    My situation? I finally got a Trial date. TBC.

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  2. Hello,
    Whilst your much-needed response to this query is informative, thorough, and straight-to-the-point, it seems a bit overly harsh.
    I do not believe the recently bereaved self-appointed 'de facto' executor (executrix?) chose to willfully thumb her nose to the law and thus flip a hand signal to the other relative. I read over her question a few times, and it appears to me a matter of simple pragmatism as she sees it, -- erroneous as her position may be.

    Certainly one can understand a lawyer's indignation at this, but I doubt the person ever intended anything dodgy, and will likely be quite taken aback to learn just what a colossal mistake she has made. Moreover, I suspect there is a goodly portion of indignation on her part at what she sees is her father's appointing some other meddling relative to take control of a role she believes to be rightly hers. She is, after all, a daughter (or is it a son?) of the deceased.

    No matter, . . . now she knows. Perhaps she can send a sweetly worded letter to the executor explaning how, as per her father's will she split some of the money with her sister, but has since learned the word "probate", and explain that she intended merely to expedite the process.
    She might want to innocently ask the executor what she can do to ameliorate any difficulties she may have caused, and of course, offer anything useful (letters, bills, bank statements, cheque, death certificate, funeral papers, gov't forms, etc) that she herself has on hand at this point.

    Well-meaning people make mistakes, and bereaved offspring tend to be rather proprietary about their recently deceased parents. If the executor in this instance were to endeavour to "sue the pants off" this person it would be utterly monstrous, and would go a long way toward explaining why she wished to avoid such a poisionous snake in the first place.

    Pleasant, kind, earnest and sincere communication may be all that's needed to 'fix' this.

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    Replies
    1. You are most likely right about her intentions. I agree that this particular person probably didn't set out to deliberately get around the law.

      I might have been a bit harsh, as you say, but in my own defense, I hear these stories every day. You'd be surprised how many people approach a probate lawyer and ask - within the confines of solicitor/client confidentiality of course - how to get away with everything from fudging paperwork to outright theft from the estate. I tend to be pretty defensive about our industry and the liberties people take with it.

      If I was overly harsh on the original person who wrote to me, I do apologize and I hope you and the executor are able to work this out amicably.

      Lynne

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  3. Is my understanding correct after reading the note again?
    The writer (he or she) of this note writes that he or she is a 'relative'. It appears to me that they are siblings. It appears that the siblings have been talking as 'we' is used throughout. It appears that the sibling living with the father is not the executor. These two are attempting to complete the estate on their own but complications have set in. They now need some help. Is that about it? I believe this matter will be easily resolved.
    What is important here IMO is that situations like this can quickly get out of hand. Most people need 'some' legal advice as even the simplest estate matter can get out of hand.
    A little more information would certainly have helped.

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  4. Regardless of the person's intentions, that person did not follow the terms of the father's will.

    This person did understand who the appointed Executor is to be but chose to ignore that will provision. If that matter could so easily be ignored, what other clauses in the will that this person may not particularly like, would also be ignored.

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    Replies
    1. Sounds like they knew exactly who the executor was as they mention "a relative is". I am the executor of my parents estate and there were some issues around some TFSA's and insurance policies that were not part of the estate. I've been communicating openly about estate matters but chose not to reveal who the beneficiaries of the policies and TFSA's were as I feel that is a privacy issue and not part of the estate and therefor none of the estate beneficiary's business. There are reasons why some people chose non-family or non-beneficiaries to administer their estate.

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  5. RE-Anonymous July 5/16
    You make a good point re the 'will'. The executor has not done his or her duty. Perhaps there is more to this story, than again perhaps there is not. The point now, is that there is a complication. How will it be resolved to the satisfaction of all?

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    Replies
    1. Re- webeye July 6/16:
      The person stated they are not the 'Executor'. This is a residuary beneficiary that ignored the will appointing another person as the rightful executor.

      Since this person and their sister have already removed money from the estate, I expect they both will be required to repay the estate until after all expenses, estate fees, taxes etc are paid and a Clearance Certificate is obtained from CRA by the actual executor.

      Residuary beneficiaries normally receive their inheritance near the conclusion of the estate administration, after the remaining value of the estate has been established, not before.

      As a matter of law, I consider Lynne's initial response to be correct so I am surprised she backpedaled somewhat in her July 3 reply.

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  6. Technically, they would be committing a crime just opening the mail !!

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  7. As I read my parents' will (they both passed within 9 months of each other) everything was entrusted to me as the executor with instructions to give that property equally to the beneficiaries. In a legal sense I own that property and legally liable for its maintenance. In this case it looks like the executor didn't know they were the executor which raises the point...when you are alive TELL someone (well...ask) that you want them to be your executor. It's not a lot of fun and there is a lot of work...some people might say "no thanks".

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    1. You absolutely should let someone know you want to name them as your executor. Sometimes they say no, and other times they start arguing about what you should do with your estate, both indicators that you should choose someone else.

      Lynne

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  8. @Paddy O'Lantern
    My 2 (common)cents ?
    [with instructions to give that property equally to the beneficiaries. In a legal sense I own that property and legally liable for its maintenance]. You don't mention how many beneficiaries but giving the property equally to beneficiaries can be a problematic if you have disgruntled siblings. Yes you are part owner but I assume the property will be sold unless you plan living together. Is the house empty? As executor you have to look after it till it's sold. You make a good point about asking someone to be the executor of your will. The reality is that many do not. Another fact , 50% of those who should have wills , do not.
    In my case, like many others, I found out after the fact that I was the Executor. I have been going through Estate Hell because of a disgruntled beneficiary. Misbehaving lawyers have played a big part. I could write a small book. TBC

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  9. Unless there are specific bequests or other instructions regarding specific assets...it is well within the executor's rights to liquidate the entire estate and hand out a cheque.

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    Replies
    1. You're right, Paddy, it would be the executor's right. What happens in real life is that beneficiaries tangle up legal rights, moral rights, wishes, regrets, and a million things they've seen on TV, and raise a hundred kinds of hell if they don't get Mom's gravy boat.

      For this reason, whenever I draft wills for clients, I slow them down and talk to them about what it's going to be like for their kids to divide their personal stuff. I always try to get them to deal with personal and household goods separately from the residue of the estate so that the personal stuff is not subject to division on dollar value. The truth is though that when someone is absolutely determined to make trouble, they'll find a way.

      Lynne

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  10. Ms sister,executor for mom, has been so horrible, refused to accept help planning funeral so I walked out. Was not executor at the time. Refused to give us access to home. Dumped crap from moms on my porch. Asked me for money to help with bills. I was no longer in a position to do so. She had nothing to do with me and brother, then told lies to everyone about us. Her lawyer was hired to do accounting. Four months later, still not done. August 27 is a year since mom died. She now buried moms remains did not tell us till next day. We all agreed on her be executor no fee. Now that she wants it. What if her and her lawyer refuse to accept account fee to be paid from sister and not estate

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    1. If you do not own the house then you have no right to access it. You make a lot of statements but do not say what is in the will...

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  11. My 2 cents.
    Another Estate Horror Story.
    You do have rights, but you will have to exercise them by getting a lawyer of your own. This of course costs money and perhaps the Executor is banking on that. Perhaps you and other? siblings can get together and retain a lawyer. Perhaps Legal Aid might be something to look into.

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    1. Lynn has mentioned several times that it is very difficult to win such a case. If there is a will and the executor is following the directions of the will then there's nothing anyone can do. A family home isn't really a "family" home unless other members have their name on the title. Once the rightful owner dies then it is an estate asset and it is the executor's duty to protect that asset and all of its contents ! It is the executor who must keep the property maintained and dispose of the asset as per the will. When I sold my parent's property the buyer wanted a document signed by all the beneficiaries...I declined as the other beneficiaries had no legal standing to interfere with the sale and I didn't want to open that can of worms allowing them to think they did. The will gave me sole authority (was specified in the text of the will) to dispose of the assets.

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    2. I didn't answer this question because I actually took it to be more of a vent than a real question. Sometimes people like to let off a bit of steam.

      It's a bit confusing. You refer to your sister as the executor but then later you seem to say that all of you agreed that she could be the executor. If she's named in the will, nobody needs to agree. Or did you just mean that you all wanted her to act for no fee?

      I agree with Paddy that the home is NOT a family home. The executor is right to keep everyone out. In fact, I always advise executors to change the locks even though that upsets everyone.

      Your question is very emotional. I can see that the situation is tough on you. But try to slow down and get the facts, because some of the things you're upset about are actually being done the right way.

      Lynne

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  12. @Paddy and Lynne
    Very good points. If only all lawyers observed Estate Laws and followed them. Sadly from what I have observed Law Societies are mainly for the lawyers, not the lawyer's clients. I have a situation going on for 11 years that has yet to be resolved and settled. Finally, a Trial date has been set. My case should be a case study. I would like to see someone like Lynne Butler expose it for all to see.

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    1. Maybe it will be a case study. Once it's done, I'm certainly going to read the case report!

      Lynne

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