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Sunday, September 19, 2021

Trying to derail an estate by sheer stubbornness doesn't get you what you want but does make you a pain in the ass

This scenario with questions was posted recently by a reader. I decided to answer it in the form of a new post partly because there are a few separate issues to address. But the main reason I thought it would be interesting for other readers is that the situation involves people who don't like the will and who are trying to control the estate by being stubborn and contrary. Plenty of families have that person!

Here is the situation and questions from the reader, with my comments below:

"My father passed away within 6 weeks of being diagnosed with cancer. While in the hospital he requested to re-do his will (hand made will)and had 2 witness's to sign. My brother was the executor on his previous will but because they have been estranged for a number of years he renamed me as the executor, my sister was not that close with him either. My father left his property to one of his grandchildren and my brother and sister are not happy about this. They want the property to be sold and split 3 ways between us 3 adult children. Whatever is left after the mortgage and expenses are paid is to be split between us 3, however there wont be anything left after all expenses are paid. There is also a RIFF that my brother was left as a beneficiary on at the bank and he also refuses to go in and claim it. My lawyer has requested for all beneficiaries to send in photo id with their signatures and both my siblings refuse to send it to him. So 2 questions...what happens to the RIFF if he does not claim it? What happens if the probate is approved by the courts but my siblings will not sign off on it. Will the property be able to be signed over to the grandchild? The banks have requested for his estate to be probated and so we are in the midst of that now."

I'm going to start with the siblings who don't like the property being left to a grandchild (who I assume is one of your kids and not theirs). They are just going to have to live with it. It's not up to them where the property goes. They simply have no say in it, and as executor you do not need their approval to sign over the property to the beneficiary.

You haven't said that they don't believe your father had capacity to make the will he made. If they want to challenge the will on that basis, that's a possibility for them. However that takes money and time, and requires medical evidence to support their position. 

Assuming the will is valid, the court will issue a grant of probate as you have requested. You will then pay the bills and do the taxes, etc. As long as the debts are all paid, you will then transfer the property to the beneficiary and distribute any remaining funds. At that point, you will account to them for your actions by giving them summaries of all funds you took in and all funds you disbursed, and an account of all assets you dealt with (house, car, etc.)

At that point, most executors will ask beneficiaries for a release. Obviously your siblings aren't going to provide one. Your options at that point will either to do nothing and go without a release, or to ask the court to dispense with their approval by passing your accounts. If they think they can hold the estate hostage by refusing to release you, they are wrong.

Your siblings are pouting and trying to make your life difficult by refusing to provide their I.D. All your lawyer wants it for is to pay your siblings money, so refusing to provide it doesn't harm anyone but themselves. 

This is the same silliness that lies behind your brother's refusal to claim the RRIF, but this could potentially have an impact on you as executor. When there is a beneficiary named on a RRIF, normally the beneficiary would get the whole RRIF and the estate would pay the taxes on it. It would be the executor's job to ensure that the tax was paid before he distributed assets to the beneficiaries. But I have questions in my mind about how this would pan out. If your brother refuses to claim the RRIF, is the tax triggered? I'd need to ask an accountant that question.

If you have transferred the property to the beneficiary and therefore there is nothing left in the estate and then your brother decides to claim the RRIF, there are two possibilities. One is that CRA will pursue your brother for the tax because the estate is empty. He is jointly liable for the tax if he claims the RRIF, after all. Or, CRA could take the view that you as executor should not have distributed the house while the RRIF was outstanding.

We can assume that your brother is not going to cooperate with anything, so the solution might be for you to approach the court and ask for directions. Ask whether you should have an order paying the RRIF into court. If your brother never claims it, eventually it will make its way to the Crown coffers but in the meantime, CRA could have the taxes paid from there. Also ask whether you may transfer the property to the grandson. 

When family members decide not to cooperate with executors, all they do is make themselves into giant pains in the ass. Behaving this way does not get them what they want. It will not get your siblings the property they want. At this point in my career I am no longer surprised at just how childish people can be but I do sometimes wish more people cared about acting like adults.

1 comment:

  1. Amen to that!
    As you are aware I am still waiting for resolution and settlement. It's only been 16 years. Some heads should roll.


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