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Sunday, April 1, 2018

What happens if the executor has a stroke and can't finish the estate?

What happens when an executor doesn't finish the estate when, through no fault of his own, he suffers an illness or injury that prevents him from wrapping things up? The process of getting a new executor into place may be more complicated than you realize. A reader recently wrote to me about this procedure. His letter and my response are below:

"My brother is the executor of my mother's estate. He has suffered a stroke and is slowly recovering but it's very difficult to communicate with him. My question is can someone replace him without electing a new executor? Can the power of attorney for his will assume control of our mother's estate? How can he sign papers, cheques if he is not physically able to do so?"

Neither of the suggestions you've made here are legally possible.

If your brother wants to maintain control of the estate despite being physically unable to sign paperwork, this might still be possible. This would only work if he is able to communicate verbally. He could instruct the estate lawyer to hold estate funds in his or her trust account and to write the cheques on the executor's behalf. The executor would still be the executor but would delegate tasks to someone else. It wouldn't necessarily be easy, but whether it's a viable option will depend on your brother's condition.

If your brother is willing to give up executorship, the first question is who will replace him. Look at the will to see whether there is an alternate executor named there. If so, that is the person who has the legal right to take over the estate. If there is no other named executor then someone else will have to step up.

The Power of Attorney document became void when your mother passed away. That document no longer gives anyone any authority.

If there is nobody named as an alternate, the Rules of Court in all provinces state who is next in line to apply. You may be surprised to learn that the line-up doesn't necessarily name people in order of kinship. Kinship would be the deciding factor in the absence of a will, but here you have a will to work from. The next people in line would be the residuary beneficiaries.

At this point, your idea of electing someone, though not correct, may not be that far off depending on the number of people who are named as residuary beneficiaries in the will. Obviously if there are a few of you, not all of you would act as executors. It would work best if all of you agreed on one person who could take over for your brother, which is what I believe you meant when you referred to electing someone. All of those who agree not to apply even though they are in the group with authority to apply will have to sign renunciation forms. If there are no residuary beneficiaries who will do it, you can move to the next group.

The next question is how that substitute executor gains the legal authority he or she needs. You are talking about "assuming control" of the estate. The person who takes over will want some reassurance, I assume, that if your brother did something questionable, that is not going to bounce back on the new executor. I also assume that your brother wants the same kind of reassurance that if the new person does a terrible job, that won't end up as a liability for your brother.

No matter who it is, the person has to be confirmed by the court as executor. There is no informal way of legally taking over an executorship; there must be court approval. The person taking over as executor will make an application to the court to pick up where the old executor  left off. This is really not that unusual in the courts and the provinces all have forms for this.

Normally the transfer of authority from one executor to another involves the outgoing executor filing his accounts to be passed by the judge. That's something that will have to be figured out with your brother's cooperation.

The probate court processes are formal, but that's intentional. If it were any easier for people to assume informal control of other people's assets, nobody would ever get to inherit anything!

5 comments:

  1. All of the children were named as executors on an estate. Can three of four executors exclude one of the coexecutors without legally removing the 4th sibling? Can a lawyer act for 3 of 4 executors and not provide details to the 4th executor if there is no legal removal of the 4th executor? Is there recourse if this has taken place? Thank you.

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    Replies
    1. Well, this certainly sounds like a mess. It's a classic example of why you shouldn't put all the kids on executors.

      All of the executors have equal legal rights and responsibilities, so 3 of the 4 can't just go ahead and exclude the fourth. An exception to this general rule is that the will itself may allow for a majority vote among executors.

      If they simply cannot all get along and work together, someone is going to have to leave the picture. One of them can voluntarily renounce if they want to. That would be the easy way. Life isn't usually that nicely wrapped up though, so if nobody wants to renounce, the only real option is to ask the court to remove someone.

      This is not an easy thing to achieve. It also gets ugly because to show that someone should be removed you have to show why they should be removed. This is where the mud-slinging begins. If that person doesn't want to be removed, he or she will fight back.

      You asked whether a lawyer can act for 3 of the 4, but this is not a lawyer's ethics situation. I have acted for one executor when two are named. There is nothing unethical in doing that, as long as the 3 are advised of their legal position.

      This will end up in court as a fight between executors. Unfortunately people make bad choices when naming executors.

      Lynne

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  2. Excellent post. The possibility of my having a stroke where I am no longer able to function as Executor has crossed my mind. Also the possibility of dying before I have been able to complete..resolve and settle the estate is a concern.

    Should the Executor die or is no longer able to function as Executor.

    What happens if there is only one 'residuary beneficiary', who is shown to be problematic? Can an adult child of the Executor apply to the Court to be named Executor?

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  3. HI lynne

    My mother is not doing well,she is also very stubborn and does not want to deal with a lawyer because of her depression and anxiety. Therfore,she will not write up a will with a lawyer, she dosent want to see anyone (lawyer) and she does not want to pay. She had some money come in from an insurance claim and is about $80,000 in debt, i have been helping her settle with a third party and also with other creditors. She wants to make her bank account joint with me but because of odsp i cant. She want to appoint me her poa and her executor but does not want to pay or see anyone. I asked her to write a letter and she said she wanted me to write something up quick for her ( i told her its best she handwrite it) She said it was fine for me.The letter was 2 paragraphs, the first one stating that she wants me to be her power of attorney and the second one statsing that she wants me to take care of her funeral arrangements,debts,property,assests. She signed the document and it was witnessed by a husband and wife friend of mine (also my moms old employees) The document was dated. Would this document be legal in a court of law. I am scared her greedy money hungry common-law who owns nothing or my father (still married but seperated for 24 years) will try and fight it. Also maybe my siblings will try and go after her house/ money. She will not meet anyone to get this totally legal which would be best so I dont have a headache latter. Please advise me if you can thank you so much

    ReplyDelete
    Replies
    1. Hi Nina,
      If she simply will not go to a lawyer, perhaps you should look into a DIY kit for her documents? They won't cost much but you'd have more help than the zero help you have now. Check out Self Counsel Press's web page.

      Lynne

      Delete

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