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Monday, August 22, 2016

Executor who wouldn't give info to beneficiaries to pay own costs of $80,000

The number one complaint I hear about estates is not about the cost or the time it takes. It's about the fact that executors refuse to part with information about the estate, even to beneficiaries with a legal entitlement to the information. Some executors hug estate information tightly to their chests as if they're being asked to give up their first born, and when pressed they become hostile and defensive.

We all know this leads to lawsuits but they do it anyway. Not all executors do this, by any means, but there certainly does seem to be an awful lot who do.

Beneficiaries who are tearing their hair out trying to find out information from an estate should take heart. There is a brand new case from Ontario in which the court refused to allow an executor's legal costs to be paid from the estate. This is a departure from usual estate litigation practice in which an executor who is working on behalf of an estate may pay the legal fees from the estate, and pays nothing out of his or her own pocket.

The reason for this decision is that the executor refused to answer reasonable questions from the beneficiaries and refused to deal with their reasonable concerns. It was only after the beneficiaries launched a lawsuit against the executor that they got some information. In the reasons for the judgment, the court said that the executor had caused the lawsuit by:
- not accounting for how he administered estate assets
- not answering specific questions until after a lawsuit was issued
- not being forthcoming
- failure to "exhibit timely candour"

According to the court, this behaviour amounted to the executor acting more in his own interest than in the interest of the estate, and therefore he could not rely on the estate to indemnify him. According to the case report, the legal fees for the executor were just over $80,000.

So executors might want to re-think their position of refusing to answer questions, unless they want to get stuck with a lawsuit and a huge legal bill.

Anyone who wants to read the case in full, click here (Brown v. Rigsby).

7 comments:

  1. Lynne
    As I have previously written I have the opposite problem,a beneficiary who won't give me the Executor (also beneficiary), information. The lawyers have made a BIG mess of things. I have conducted myself accordingly. This is very timely for me. Thank you. TBC

    ReplyDelete
  2. LYNNE. God bless you - this is so important a decision because it is recent. My brother stole mom's properties, matrimonial home, refused to give any accounting as he took all rental income & gave false information to Provincial Registry, Income tax, etc. Personally I want to see new laws where by theft is theft & the police should have had the right to charge my brother instead of mom losing title to her home, in excess of $300,000.00 & the cost of our lawsuit has been in the tens of thousands so far & is on going. Anyhow. My lawyer Trent Falldien is young , honest & eager but there is a lot we did not know & your blog is making it possible for us to get some justice someday in the future. We could not have made our case as well documented if not for your blog. Thank you Lynne for all you do will perhaps someday see new laws in an otherwise very corrupt system with respect to property rights etc.

    ReplyDelete
    Replies
    1. I am really glad to hear that you've found this blog helpful.

      Lynne

      Delete
  3. I forwarded this blog post onto my sisters/executors several days ago hoping this would prompt them to disclose the accounts but they have not responded in any shape or fashion. How do I found out if they are trying to pass the accounts through the courts? One sister lives in Collingwood, one lives in Ottawa and the other, Toronto?

    ReplyDelete
    Replies
    1. Kiwi, if the executors are doing anything with the estate in the courts, you can find that. Once a will is probated, it's publicly available. Any action taken on the estate uses the same court file number as the probate, so you can find it all in one place.

      Lynne

      Delete
  4. Wills need to be available to the public. Ontario does not do enough to help beneficiaries. My brother is the executor and he is constantly making up excused why the money cannot be released.

    ReplyDelete
    Replies
    1. Once a will is submitted for probate, it is a public document.

      Surely you do not mean that wills should be made public while the person is still alive? That makes no sense at all. So I assume you m mean wills should become public after a person dies. And who would be responsible for making the will public? That would be the executor named in the will. So...that's exactly what we have now.

      The only difference is that wills that are not sent to probate are not made public.

      Any suggestions you have for a plan like this would be welcome.

      Lynne

      Delete

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