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Sunday, September 11, 2016

What if the executor ignored the will for 16 years and now one of the beneficiaries is passing away?

What happens when an executor ignores the will for 16 years, then one of the beneficiaries under the will becomes ill? Does that complicate the estate of the ill beneficiary? Yes, it certainly does. A reader recently wrote to me to ask about whether this situation would interfere with the smooth running of his father's estate. Read on for his question and my reply.

"Our father was one of 3 beneficiaries, 16 years ago when his mother died. The executrix, his sister, never executed the will. The issue is unfortunately 3 properties were willed to 3 siblings, my father being one of the siblings. Now my father is not well and as a result of the entire mess we have asked our father to have a lawyer take care of this and none of his 5 children want the job. However the question we are all worried about is will his will be able to be executed and final tax return and so be able to be prepared even if his mother's will has not been finalized."

Okay, let me get this straight. Your father is ill and apparently is not expected to recover, so all of his five kids are sitting around "worrying" about their inheritance going through okay, while avoiding having to lift a finger to help? I'm really glad you're not my family.

I don't think you're going to like my answer any more than I like your question. No, it's not going to run smoothly. Yes, there are going to be delays and expenses caused by the family habit of not doing anything they were supposed to do.

Your father does not own the property left to him by his mother, if his mother's will was not probated and the land transferred. It is still in his mother's name so his executor will not be able to access it. Someone will have to take over for the sister who couldn't find the time for 16 years to do her job and finish it. The new administrator of your grandmother's estate must apply for probate and transfer the land to the beneficiaries named in the will.

There will be probate fees, land registry fees, executor fees, expenses, and of course, there will be capital gains tax on the property. One of the properties was likely tax-exempt at the time of your grandmother's death, if it was her principal residence. However, for the last 16 years it has not been tax-exempt so it, too, will be subject to tax. All that comes out of the estate, so if there is no cash left, you should anticipate that one of the properties may have to be sold to pay the taxes.

After your father passes away, the executor of his will is going to have to probate his will and transfer the land to the beneficiaries of your father's estate.

Since nobody in your clan seems to feel any family responsibility, your father's choices for executor are a lawyer, a trust company, the Public Trustee, or a friend. Whoever it is, they'll charge a fee, and again that comes out of the estate.

Are you guys sure he's even going to leave his estate to you? If I told my kids I was sick and all they cared about was their inheritance and wouldn't do squat to help, I'd make a will for sure, but they wouldn't be getting anything from it.

4 comments:

  1. Lynne
    This has got to be one of the best letters so far. This one really takes the cake.The 3 beneficiaries just did nothing? Me thinks there might be more to this story. There often is. Lynne, do you plan an Estates Horror Book?

    ReplyDelete
    Replies
    1. I suspect that the 3 beneficiaries actually all moved into or onto the land they were supposed to inherit but nobody bothered with the legalities. I see a lot of that. But, yeah, estate horrors seem to be my stock in trade.

      Lynne

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    2. Lynne, your spot-on reply to this writer's question is one of the many reasons I keep reading your blog. There's some real doozies out there. Thanks for all you do !

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