Monday, August 22, 2016
Executor who wouldn't give info to beneficiaries to pay own costs of $80,000
Posted by Lynne Butler
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).