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Monday, May 15, 2017

Must beneficiaries all present a united front to challenge an executor?

Recently a reader asked me a question about whether ALL beneficiaries of an estate had to band together to tackle an executor, or whether one or two could act alone. Even though I answered his question on the post where it was asked, I wanted also to post it here and give a more detailed answer. I believe it's a question that will interest many beneficiaries. Here is the question followed by my comments:

"Can an executor's conduct be challenged by some but not all of the beneficiaries of a will? My brother and I have strong reason to suspect the executor of our father's estate of malfeasance. He having proved impossible to reason with and stiff-necked, we two have consequently decided to approach a lawyer. A third beneficiary remains very close to the Executor and won't hear of taking any action against him. In the absence of unanimity, are we two entitled nevertheless to challenge his behaviour? Must beneficiaries present a united front to take action?"

The short answer is that yes, some beneficiaries can challenge the executor even if not all of the other beneficiaries are on board with that.

It is true that some rights apply to the beneficiaries as a class or group of people. For example, all residuary beneficiaries are entitled to a full accounting of the executor's accounts. That does not mean that they may only receive those rights as a group. Each of them as an individual has those rights himself or herself.

This means that one or more members of the group could waive a particular right while one or two others did not. Using the example of the accounting, one beneficiary could decide he or she didn't want an accounting, but that does not mean that the remaining individuals who are in the group must waive the right as well.

It is sometimes the case that an executor treats one beneficiary more preferentially than the others based on their relationship or other factors, so naturally that beneficiary is not going to object to what's going on. In fact, sometimes that's the reason for the lawsuit!

Keep in mind that if two of the three beneficiaries end up asking the court for assistance with the estate, the third beneficiary is affected by the result as well. For that reason, the court will want to know that the third beneficiary is aware of what's going on and that the third beneficiary has the chance to participate in the proceedings if he or she wants to. While the third beneficiary will not be forced by the court to take sides, the court will allow him or her the opportunity to be heard.

There are great reasons for all beneficiaries to stick together when it comes to estate litigation, not the least of which is that they can pool their resources to pay legal fees. And it's a huge relief not to have fights splitting the family. However, it's not always workable in real families in real life.

3 comments:

  1. Once again we have an 'Executor' behavior posting. Executor's or Beneficiaries should not be allowed to do as they please. To me it is a crime, that involves money, time, stress and often breakups of families. It concerns me that these crimes are allowed to go on. Someone besides the Executors and Beneficiaries are responsible. I am still trying to get my 11 year old case to court. For some it's a licence to print money. Now, I understand why 90% or so cases never get to Court.The system brings you down to your knees. It's an injustice. Lynne Butler, thanks again for doing what you do.

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  2. Not true in Ontario unless you have $50,000.00 to pay a lawyer up front!! I & mom are a victim of Ontario laws giving the Executor of any estate - OWNERSHIP RIGHTS!! After 16 years being held hostage by my brother - I recently discover that Ontario laws gives "OWNERSHIP" rights to an executor and open invitation to steal property rights & rob the estate of all funds, WHICH HE DID. I will probably spend the rest of my life in court but I choose to fight the Ontario government in their laws designed for criminal behaviour. If the Mafia had made the laws in Ontario with respect to being able to steal properties title in secret - executors rob the estate - they could not have done a better job than our corrupt government.

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  3. @Trudi Trahan-upchanMay 16, 2017 at 11:06 AM
    Not true in Ontario unless you have $50,000.00 to pay a lawyer up front!! I & mom are a victim of Ontario laws giving the Executor of any estate - OWNERSHIP RIGHTS!! After 16 years being held hostage by my brother - I recently discover that Ontario laws gives "OWNERSHIP" rights to an executor and open invitation to steal property rights & rob the estate of all funds, WHICH HE DID. I will probably spend the rest of my life in court but I choose to fight the Ontario government in their laws designed for criminal behaviour. If the Mafia had made the laws in Ontario with respect to being able to steal properties title in secret - executors rob the estate - they could not have done a better job than our corrupt government.1
    1) Not certain one needs $50K up front.
    2) Trudi- No doubt you have devoted a great deal of time and have learned a lot about the process. Perhaps you are are correct? We only have a glimpse of your situation.
    3) Ontario laws gives "OWNERSHIP" rights to an executor and open invitation to steal property rights & rob the estate of all funds[Trudi]. I find that hard to believe ie to steal etc.
    It's all about the 'Will' is it not? I did respond elsewhere to a post of yours. I assume your parents were married and your father had a 'will'. Did your mother assume that should he die before her that she would automatically get everything? It appears that your mom was not a co-owner of the property. If so, why not? Did your father own the house prior to getting married? It appears your brother is the Executor and can administer the Estate according to the 'will'. It appears that Ontario follows the rule of law as per the 'will'. Are you saying that in this case your mother has few to no rights? Did your father take advantage of your mother?
    4) Trudi, are you chasing something that you will never catch?
    5) In general. From my point of view it is not really about the laws, but the system, and how the system allows lawyers, and judges to go about doing what they have been doing for a long time. The system allows Executors and Beneficiaries to drag out the process often with little recourse. This pads the pockets of lawyers. Judges, rely on lawyers. The client is at the bottom of the totem pole. If big fines were levied against these perps (Executors/Beneficiaries) then Executor and Beneficiaries would think twice about playing games. How many lawyers are ever fined for extending the game? Lawyers love these games as it's their livelihood. Also note. If a lawyer has misbehaved chances are no other lawyer will go after him and you will start all over. You might not be able to find a new lawyer in your region. Don't look to the Law Society of your Province for help as they are a society for Lawyers that lawyers pay fees into plus fees to their 'Insurance Program'. In many ways it's like the Fox looking after the Chicken Coop.
    At the very least. Get a 'will' drawn up. Look for a good lawyer. Not all good lawyer's are honest or have integrity.

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