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Monday, October 1, 2018

Can a beneficiary be asked to sign an acceptance/release before the estate administration even starts?

This question was recently asked on this blog by a reader. It appears that beneficiaries of an estate are being asked to sign paperwork before the estate administration has even begun and the reader is wondering how to handle it. Here is the question followed by my comments:

"Is there such a thing as an acceptance release form signed by each beneficiary before the will goes to the lawyer saying you accept the terms of the will? This is being proposed by an executor to have each beneficiary sign that they accept the terms of the will in advance?"

This is not something that I have ever asked beneficiaries to sign, and no clients of mine have ever told me they've been asked to sign one. However, I can see why an executor would ask for this. He is no doubt gauging the amount of trouble he should expect from the beneficiaries. If he anticipates a lot of friction, he can either turn down the job or buy executor's insurance.

I don't have an issue with an executor asking beneficiaries to sign a document stating that they agree with the terms of the will. That's basically nothing more than shutting the door on anyone challenging the will itself. This kind of agreement would bar someone from later contesting the will on the basis that the deceased didn't have the proper mental capacity or was influenced by someone. It makes sense for the executor to attempt to find out whether there is anyone involved in the estate who intends to challenge the will.

What I do have a big problem with is using the word "release".

In legal proceedings, a signed release means that the person who has signed it has agreed that the matter has come to a conclusion and he or she will never again contest the subject matter. Once the release is properly signed, the person is legally barred from ever opening up the issue again. In my view, it is not appropriate to release an executor before the estate has even started. I would never allow a client of mine to do so.

A release is signed at the end of an estate administration for a reason. Once the estate is wound up, the beneficiaries can look at the job the executor has done. The beneficiaries will be able to see what funds were received and what was paid out. They will see how matters were handled, how long it took, whether there were mistakes made, whether the accounts add up, etc. They sign releases once they are satisfied that all is well.

If the release is signed before the executor even starts work, the beneficiaries will lose any opportunity to object to a poor showing by the executor, to missing funds, to years of delay, or other problems. It simply makes no sense.

It seems unlikely to me that a lawyer would prepare a release for signature at the beginning of the estate. I wonder whether in this case the paperwork has been suggested and prepared by the executor before hiring a lawyer to handle the probate of the will. When people draft their own documents, mistakes like that are frequent and sometimes people sign things that eliminate or diminish their rights without even realizing it.

In this case, I suggest that each beneficiary who is asked by the executor to sign a document should take it to a lawyer for review. Know what you're signing and what the document does to your current and future rights under the estate. Home-made documents are dangerous enough, but to sign them without legal advice is downright foolish.

1 comment:

  1. Thanks Lynne for some great articles. I am executor of my father's now and have just finished probate. Accountants are finishing the final return and then I will ask for CRA clearance. I haven't been happy with the law firm that helped me through probate and would like to handle beneficiaries release forms myself if possible. Can you suggest where I would find such forms?

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