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Thursday, June 3, 2010

What is an executor's year?


The "executor's year" is a rule of thumb. It refers to the fact that most estates should be wrapped up within a year of the executor getting a Grant of Probate, or an administrator getting a Grant of Administration.

One reason this rule of thumb exists is to remind executors that they don't have forever to take care of the estate. Beneficiaries and creditors have a vested interest in having matters concluded, and the executor is responsible for taking care of that.

Another reason we have the rule is to remind beneficiaries that estates cannot be wound up overnight. There is much more for an executor to do than most people realize, and some of it is truly time-consuming. Also, some of the matters that fall within the executor's responsibility rely on others to conclude, such as selling a house. You can't sell a house without a buyer, and the executor is only going to have so much control over that.

More complicated estates take longer. In some estates there are long-term leases to wind up, businesses to be sold, assets in other countries to deal with, or disputes about who is going to get what. You can expect those estates to take longer than others.

The effect of the rule is that a beneficiary who doesn't want to wait for his or her inheritance cannot force the executor to pay out his or her share within the executor's year. Nor is interest required to be paid by the estate on that inheritance until after the year is up.

The rule is meant to be workable for your average executor who is doing the best he or she can with the estate. However, we all know there are a few executors out there who refuse to do anything, leaving the estate and the beneficiaries at a standstill. Once the year is up, an unpaid beneficiary can take legal steps to have the estate administered. This could mean removing the executor entirely, requiring that a full accounting be prepared, or a dozen other things depending on the situation.

I am asked about the executor's year by beneficiaries and not usually by executors. If you are a residuary beneficiary who is frustrated with an executor who is not taking action, you might want to talk to an estate lawyer about it.

10 comments:

  1. i am interested in the specifics of whether the executor's year begins when probate is granted (which could be more than a year after death), or a year from death of the person who wrote the will. in my case of interest, probate was granted about 14 1/2 months after death.

    and how is interest calcuted? is it through the federal Interest Act, which gives 5%?

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  2. The executor's year begins to run when a person passes away, regardless of when the executor applies for probate. Sometimes he or she can't apply for probate right away because there are unusual assets to be valued, or there are other issues going on. This doesn't mean that ALL limitations begin running as of the date of death. For example, in Alberta, a spouse who does not receive the entire estate of the deceased has 6 months to apply for a larger share of the estate, and that 6 months starts when the Grant of Probate is issued, not at death. For exact tax rates that apply, I would ask an accountant.

    Lynne

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  3. Hi Lynne...My mother passed away Jan 2010. This is now November 2010 and to this date I have not received anything from my sister and her husband who are executors. I assume they are executors as they looked after funeral arrangements. We have not even seen the will yet. Once the year is up do we start proceedings with a lawyer and do we have to pay these fees or can they be liable for this? Any advice you can provide I would appreciate.

    Denise

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  4. Hi Denise,
    You are right that you should have heard something by now. It looks as if you have never actually asked them if they are the executors. It could be that they made funeral arrangements because they are next of kin, not executors. Has anyone mentioned that your mom had a Will? Did she have anyone acting under a Power of Attorney before she passed away? It could be that everyone thinks that someone else is doing the executor's job.

    You might not ever see the Will, if you are not a beneficiary. But as your mother's daughter, of course you want to know that SOMEONE is handling her affairs. Come right out and ask them if they are executors. Perhaps ask if they need any help or information that you can provide.

    Remember that most executors have never been an executor before, and really have no idea that they are supposed to let others know what's happening.

    The other possibility is that nobody is acting as executor because nobody has found the Will. If no Will is found, someone may have to ask the court to appoint them as administrator, depending on what assets need to be distributed.

    I'm sure you've heard me say this often, but start by gathering information. Ask them if they are the executors. If they say they are not, try to find out if there is a will anywhere (the bank, at your mom's house etc) and go from there.

    Lynne

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  5. Hi Lynne... My father passed away in Dec 2010. He left behind a substantial estate and I am one of 4 residual beneficiaries. I require funds for my month to month expenses. Is there anything I can do, do I have any rights to ask the court for monthly payments while I wait for the courts to grant probate?

    Thanks so much,

    John

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  6. Father's sister died without a will, over seven years ago. How long must we wait for missing beneficiaries to be found? Thank you.

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  7. Hi Lynne, Just wanted to say a Huge Thank-you for your Alberta Probate Kit..I was trying to take care of my Mom's matter's without a lawyer and the paperwork was overwhelming. Then I found your book and had it done within a week. I received probate w/no mistakes and I am currently wrapping this up...Thanks agan

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  8. I'm so glad to hear that! I really appreciate the feedback.

    Lynne

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  9. Hi Lynne. Thank you for your informative website Even though my mother's estate has a lawyer, it is helpful for me as a first-time executor to have a place to get answers. Can you tell me if an executor who was managing a business prior to the death of the owner can continue to collect their salary during the winding up? A fellow beneficiary is unhappy with the time it is taking (15 calendar months but only 8.5 due to the seasonal nature of it), and feels that I am in conflict. There is a pre-existing family conflict that has them questioning everything I do, including retaining my mother's lawyer to represent the estate. I understand that independent legal advice for everyone is the way to resolve it, but I am feeling badgered as I try my best to ensure the property sells for good value.

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  10. Does the executor year start from the time the probate is issued or when the executor receives it?
    I am asking because my Mother's estate is dealt with by two people who are less than adequate. The probate was sent to the lawyer and the bank, but not actually received by the executors until a month later as they took a month vacation without telling anyone.
    When does the executor year roughly start in this case.

    ReplyDelete

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