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It's not surprising that executors make mistakes. In the interest of informing present and future executors, here is a look at the top five mistakes executors make:
1. Ignoring inconvenient or unpopular parts of the Will
Executors frequently feel that they have a better, or "more fair" idea of how an estate should be distributed than is directed by the Will. However, it's not their choice. Their job is to distribute the estate according to the Will, not to re-write it. An executor might be less tempted to change the distribution if he or she kept in mind that for every person who likes the new distribution, there is at least one person who is outraged by it. If the executor fails to follow the distribution under the Will, he or she may be responsible for paying the disappointed beneficiary out of his or her own personal funds.
Executors ignore other parts of the Will too. For example, an executor might sell an asset and give the beneficiary the proceeds, even though the Will directed that the asset be given in specie. The executor might give trust funds to children at a younger age than that directed in the Will. He or she might forgive loans that were to be collected. None of these things are within the authority of an executor and each exposes the executor to potential liability.
2. Keeping secrets and failing to communicate
Executors are often secretive to the point of being furtive. Nothing is going to fuel speculation and suspicion on the part of beneficiaries more than being kept in the dark. An executor must respond to reasonable enquiries from the residuary beneficiaries of an estate. They are entitled to it, and responsible for policing the actions of the executor. They are entitled to see the Will and all of the documentation filed with the court. Believe me, if beneficiaries can't get the informaiton they're entitled to, they will suspect the worst. Perhaps executors don't realize that as soon as the frustrated beneficiary hangs up the phone, his or her next call is to a lawyer.
Time and time again I hear stories of family members who are presented with complicated, mysterious documents by an executor and being told to sign them, without being given any information about what's going on. Any executor who treats important legal issues this way should expect pushback from the beneficiaries. This is a textbook example of how to start an estate dispute.
The failure to communicate even reaches to co-executors. Sometimes a person will act for weeks or months as an executor and not reveal that there is a co-executor appointed until he or she is forced to do so because a financial institution refuses to go further without both signatures.
3. Treating estate money as their own
Perhaps this is the reason for the secrecy mentioned above, but many executors either don't know or ignore the limits of their role. Executors have been known to pay off their own debts, make loans to family members and buy into business ventures, all with estate funds. None of this is lawful, and executors may be forced to repay those funds out of their own money.
Even executors who are honest make mistakes with estate money. For example, many executors don't see a problem with using estate funds to fly in family members from all over the world to attend the funeral, and using estate funds to supply those family members with hotels, transportation, meals and sometimes even clothing to wear to the funeral. These are not estate expenses. The executor could end up paying for all of that himself or herself.
4. Failing to deal with debts and taxes before paying beneficiaries
I suppose it's a natural human reaction to ignore unpleasant things, but this can't apply to executors who must prepare tax returns. By law, debts of an estate, including tax liability, must be paid before beneficiaries receive their shares. It isn't easy to resist the pressure from those who want their money now, but an executor who pays beneficiaries without having cleared all debts and liabilities may be personally responsible for paying those debts.
5. Trying to do everything cheaply
It's certainly not a bad idea to keep estate administration costs low, but unfortunately the way many executors go about that actually ends up costing the estate more money. "Keeping costs low" seems to translate into forgoing professional help in many cases. For example, they try to do tax returns without the help of an accountant, which means they miss eligible deductions and elections. They also miss filing deadlines, and so incur interest. They try to sell real estate without a realtor and settle legal disputes without a lawyer. They sell assets without appraisals and invest money with no guidance. Very few people can do all of these things well, particularly at the same time as keeping their full-time job and family going.
The best way to avoid these five main errors is to stick to the Will, take your time and ask for professional help when you need it.
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You can add...not going to professionals for advice - but listening to the neighbour or relative, without knowing what their situation was vis a vis yours and understanding the difference.
ReplyDeletePatrice, what an excellent point. Legal advice is always very fact-specific, meaning that even a tiny difference in facts can mean the person should take different steps. Nobody else's situation is ever exactly like anyone else's. I always think that using second-hand legal advice is like taking someone else's prescription medicine - it usually does more harm than good.
ReplyDeleteOn point 2, why is the executor only required to communicate with residuary beneficiaries and not specified beneficiaries?
ReplyDeleteHi Mike,
ReplyDeleteA specific beneficiary has been given a certain gift, say $500. This person is going to get the same $500 whether the estate is worth $1,000 or $10,000,000. Therefore there is no need for all of the deceased's private information - both personal and financial - to be divulged. On the other hand, a residuary beneficiary's gift is, by definition, a share of "the rest" of the estate. They won't know what they are supposed to receive unless they know how much "the rest" is. For example, if you were to receive 50% of an estate, you need to know whether the estate is worth $1,000 or $10,000,000 so you can figure out what your share is worth. How else will you know whether the deceased's instructions were properly carried out? Every dollar that an executor spends on expenses or loses by being negligent is a dollar that is taken out of the residuary beneficiary's pocket, but not from the specific beneficiary's pocket.
My wife's mother died intestate six months ago, my wife's only sister is the administrator. The estate consists of two houses, one of which is occupied by the administrator, who has been living there since shortly before her mother's death. Neither house has yet been put up for sale. The administrator has been repeatedly verbally abusive towards my wife. My wife has written a letter to the estate's lawyer and advised that she wants me to act in her stead in this matter, she can't take the abusive language and drama anymore. We have been given no plan or schedule, no appraisal or balance of accounts. I can guess the value of the assets but I have little idea of the estate debt. I have approached the administrator, who says that she is apalled that I would aske her to pay rent to the estate, that she can tie up these properties for ten years if she wants, and that my questions about the status of the estate constitute harassment, and that she will get a court order to stop me from interfering with her duties. My wife and I have always been polite and proper in our dealings with this matter. What should I do?
ReplyDeleteA question on dual executors.
ReplyDeleteMy dad died 5 1/2 years ago and we are still dealing with the estate. Basically a few years before my dad died he had a heart attack and the woman he lived with had him sign a mirror will in the hospital.
A year or so later they had a common law separation the estate divided. A year later he died but had not changed his will nor had she (she since has). She was the sole executor and beneficiary but through the separation agreement she was removed from her duties.
From there the will dropped down to co-executors that she had picked - her daughter (whom my father loathed) and my sister. control of the estate, In total there are now the 4 beneficiaries of the mirror will - the 4 kids all in our 30's - my sister, myself and this women’s daughter and son.
Both my sister and I live om Toronto 500 km from my father’s home but we were trying to sell his house of which the other executor, who lives in the next town, decided to move in and throw out the tenant living there (who was paying rent to cover the cost of mortgage and insurrance). She lived there for 13 months and now 5 years later with everything finally wrapped up somewhat, (as she thwarted everything along the way and did not respond for months on end) she is trying to claim $3600 for living expenses in the house (gas money to her work in the next town).
We sent numerous letter saying we did not want her the house, personally talked to her several times asking her to leave but she refused. The mortgage came out of the estate while she moved in and lived rent free with her boyfriend and 2 kids - basically like a squatter we could not get her to co-operate and leave the home instead she invited us to stay if we wanted (I believe some advice given to her by one of the several lawyers she retained and fired). She would not approve any real estate agent we wanted for almost a year and then when she did the house was sold in less then a couple months.
We have conceded on so many continuous issues over the years, swallowed our pride just to move things along, even if my dad would be rolling in his grave.
My sister and I want this behind us so we can move on but this business of claiming gas money to travel to and from work from his home is ridiculous after rent free living and the other co-executors disproval
We really don't want to bend on this issue as well but she refuses to let it go and continues to hold up the closing of the estate as she has no other interest except getting what she can? We know only half the monies she wants actually comes out of our pocket (as she and her brother our beneficiaries) but it's principle and another strong arm tactic to ultimately get her way.
What are her rights in this matter and our rights as co-executor and beneficiaries?
My wife, as beneficiary, signed the request that letters of administration be assigned by the court, and at that time waived the requirement that the administrator should post a bond.
ReplyDeleteThe administrator will not provide accounting, nor communicate with my wife or me. Can my wife reconsider and now ask that the court revisit the provision of a bond, or is it too late?
Deb is asking..
ReplyDeleteIn later years of his life my grandfather had many excuses as to why he could not visit or have visitors to his home, he was sick, going ona trip, etc. I as his only living reltive and his grandaughter was assigned as executor and beneficery 16 years ago upon my grams dealth.
Last week the lawyer notified me, Grandpa passed away 10 days ago. Suddenly I have a woman claiming to be executor, she has already listed and reduced the sale price of his home, I wasn't even informed he was sick or dying. They claim they could not get a hold of me but my contact information has not changed in 43 years. The real estate company will give me no information, actually they were aggressive and secretive.
Has anyone had any experience they could share. Is there not time frames to contact family? can someone have a second will done without the family being notified? I don't even know where his body is to make appropriate arrangements to put him with my grama. The stress is overwhelming and I'm anticipating a very big problem on Monday. I don't have any idea who this woman is who claims to be his executor but the realtor stated she (the woman) was "planning to be very fair with me". The statement alone has lead my mind to think all kinds of thoughts.
Just the fact that the estate has taken over 5 years so far tells me how bad this has really been for you. As often happens in estates, the person who pushes the hardest and screams the loudest seems to win a lot of battles that wouldn't be won on the merits.
ReplyDeleteI don't understand the part about the separation agreement removing her from her duties. Normally that kind of agreement wouldn't have any effect on your father's choice of executors. But then, I haven't seen the agreement so I couldn't say for sure.
Have you been taking care of all of this without a lawyer? I think this kind of dispute is too important for you to rely on a few paragraphs from someone (me) online. I don't have all the facts and can't review your documents. I think you need to sit down with someone and talk out the details. I get the feeling that so far there hasn't really been anyone involved in the estate (including the lawyers) who knows how to keep it on track.
Yes, your father, bless him, may well roll over in his grave. He obviously wanted to leave things in order for everyone by making a Will. As happens over and over again, his estate was shanghai'd by a choice of executor that I'm sure he regrets. I hope that other readers seeing your story learn something from it.
Lynne
Lynne, can an executor (also a beneficary) of an estate claim a gift to another beneficairy was a loan that occurred 15 years ago. The will makes no notation of a loan and that everything is to be divided equally. The lawyer however has noted that the deceased told them that it was a loan(that was 5 years ago when the deceased changed the executor).
ReplyDeleteIn answering this question, I'm assuming that the beneficiaries are the deceased's children. The general rule is that money given to the children ahead of time is considered to be an advance on their inheritance. In other words, a loan that if not paid back, will be deducted from their share of the estate. The person claiming it is a gift will have to prove that. It's interesting - and annoying - that the lawyer apparently knew it was a loan but didn't put that in the Will, but sometimes our clients just don't want certain things included. These are general rules of course, since I haven't seen the Will or talked to anyone about it, so tread carefully.
ReplyDeleteLynne
I'm concerned that you're relying on me for legal advice on a specific problem, which I'm not in a position to give you. I can give information about how things usually work, but the issues that you're talking about are complicated and important and you should sit down with someone and talk things out. There are specific issues that need more than a superficial answer. For example, why are you assuming that you're the only one of the kids whose "help" will be treated as a loan? You need to bring a copy of the will and everything you know about all of the advances to a lawyer who can ask you specific questions to get the whole story, and give you some suggestions about your options. What you can get from a blog, whether it's mine or someone else's, is just too generic for an important issue. Best of luck,
ReplyDeleteLynne
I have a question..
ReplyDeleteCan an executor, who is also one of two named beneficiaries and the holder of the estate as trustee for the elderly spouse of the deceased, invest his own money into an estate property in order to make it a money generating property for the surviving spouse? (ie turn the home into an apartment dwelling)Can he set up a legal contract with the other beneficiary of the estate without the surviving spouse's permission? Is this legal?
Can Revenue Canada changed its mind
ReplyDeletemonths after the "Final Distribution/
Clearance Certificate" has been issued?
Second once the distribution is done,accepted by all in writing, can I as an executor burn all old income tax files of the deceased?and all documents,wills etc Quebec resident
Peter
An executor should never mingle his or her own money with that of the estate. When money is blended, problems may arise, such as to whom capital gain is allocated. My impression of your question is that the various roles you are playing are being blended and more or less ignored. Obviously I haven't seen the Will and don't have all the facts, but this scenario would seem to be riddled with conflicts of interest.
ReplyDeleteLynne
Lynne do you have an email address I can send a question to? Its rather lengthy.
ReplyDeleteYou can reach me by email at estatelawcanada@gmail.com.
ReplyDeletehi there my father passed away 4 years ago with no will. my step brother appointed himself executor at the time we were fine with this. he got us to sign the releases but one brother refused to sign, what happens in this situation? is the money in a interest bearing account and how do i try to recieve it in this situation? my step brother has made no contact with anyone else and we are not close at all. before signing these forms we found out that 1 year before our father passed , my step brother had him put the house in his name and that is what caused the break down between us. we all feel cheated but there is still quite a bit of money that i could sure use but dont know how to go about getting it with my brother not signing the papers?
ReplyDeleteHi,
ReplyDeleteI don't know for sure whether your step-brother has put the money in an interest-bearing account, but he should have done that. If I were you, I'd get going on this before any more time passes, because once the money is gone, it's gone. As a beneficiary, you do have the right to push for a final distribution of the estate, especially four years after your father's passing.
It would be helpful for you to know why your brother wouldn't sign the release. If it is solely because of the house transfer (and I'm not saying that's a small issue) it may be possible to separate that issue from what happened after your father's death so that the post-death estate can be distributed.
I'm wondering whether your step-brother was acting under a Power of Attorney when your father transferred the property to him? If so, that certainly opens up a whole new issue.
I know that all of you aren't speaking at the moment, but if you think that communication isn't impossible, you might consider having a mediation meeting. You would have a neutral party (usually a lawyer or someone from a family succession planning group)who would lead a discussion between your step-brother and all of the beneficiaries. The whole point of it is for everyone to tell their side and to see if it's possible to settle things. This is much cheaper than everyone hiring a lawyer and duking it out in court. It's quicker too, and easier on the nerves. You may be able to get people to pool their money to pay the mediator.
If that doesn't work, you might just end up hiring a lawyer to push for a distribution.
Lynne
Lynne,
ReplyDeleteMy father passed away recently and I am one of three executors in his will. However, a few weeks prior to his death, I became the attorney (is this now called trustee?)when my father's enduring power of attorney was put into effect due to mental incapacity. I realize the EPOA ceases to exist upon death, however, I am wondering if I have "special" responsibilities because of the "attorney role"?
Hi,
ReplyDeleteI'm sorry to hear about your dad.
The three executors have equal responsibility and decision-making duties, but you are right that you are in a slightly different situation because you acted as attorney. An attorney's responsibility to the executors is to account for what he did while he was the attorney. So in your case, you must show your fellow executors the bank statements etc that show what you did. There doesn't necessarily have to be a formal set of financial reporting documents if you only acted for a few weeks and basically kept things running as your dad had run them. If you made any purchases with your dad's money or changed any banking arrangements, you have to show this to the other executors. Other than the reporting requirement, there really isn't any other difference between the roles of the three executors.
As for the question about the wording - a trustee is anyone who is looking after money or property for someone else, so both executors and attorneys are types of trustees. Attorneys are sort of a blend of agents and trustees, but because they look after someone elses's money when there is incapacity, they are considered trustees. However, you're correct to refer to yourself (before your dad's passing) as an attorney because that specifically identifies you as someone acting under a Power of Attorney, as opposed to someone acting under a will or trust deed.
It sounds like you're on top of things and I hope it goes as smoothly as possible.
Lynne
I have a complicated situation. My father died in 1963. It came to light last year that he was the owner of gold shares that he apparently purchased around the time of his death. My lawyer in Vancouver is preparing "letters of administration" for me as my father's sole heir. The shares are worth approx.$90.000 today as opposed to $3.690 in 1983 (a value at the date of his death is unobtainable). Would the capital gains be owable by his Estate ($3.690) or the current value ($90.000)? I am also a non-resident having lived in Spain since 1972. I do collect a small pension from the Canadian government for the 12 years I worked in Canada before leaving.
ReplyDeleteI would really appreciate some advice in this matter.
Hi Lynne,
ReplyDeleteI am co-executor with my brother for my Mom's estate who passed away last July. I signed a document last fall stating that only one signature, rather than both of us would be required to do executor business as I live in Toronto and both my brother and Mother live(d) in Montreal.
Since then my brother has contacted me only twice. The first time was to advise me he had hired his own company to repair a boathouse my Mother and her Brother (still alive) shared on a small piece of land. He advised me that my uncle didn't want to pay for repair to a boathouse used only by my brother to store his and his friends boats and that I shouldn't worry about it 'Mom paid". Problem is Mom had been dead for 4 months at that time, made no provisions in her will to repair a boathouse on a piece of land she never went to, and I as co-executor had not been consulted.
My brother has also maxed out a credit card in my Mothers name of which I am the secondary card holder. He has depleted the estate account and recently advised me we would have to liquidate her financial investments to pay off debts, beneficiaries and estate taxes that he advises me will be paid late and we are to expect a heavy fine. My Mother died debt free.
It turns out that the land inherited and shared by my Mother and Uncle, was to go in entirety to the surviving sibling, my Uncle and is not part of what my brother assumed was part of my Mom's estate. Had he waited until the Notary had completed her research into the property deeds etc before spending the estate account on repairing the boathouse he stores his boat in, he may have realized this, but didn't.
I have contacted the bank, notary and my Moms investment trustee to advise them I have rescinded agreement to there being a single signatory. They have agreed to contact me whenever my brother attempts to act alone and I will not be signing off on anything until there is a full accounting of each penny spent from my Mothers estate. As my brother has declined all my offers of coming to Montreal to assist him, has provided me with no documents, has not paid off debts or taxes or even the beneficiaries named but has motored his way through upwards of 60k repairing boathouses on land we don't own etc.
I am unemployed having quit my job to nurse my Mom through pancreatic cancer. Unless a lawyer will help me on the promise of payment later, I cannot afford to retain one at this time, especially one in a different province. I'm wondering though if this isn't a criminal matter at this point and if I should just contact ?????? Who should I contact? Help!! and thanks for this site Lynne. Google is an amazing thing!!
Karen in Toronto.
HI My uncle passed away 3 years ago. My sisters and I were told by I guess the Executor (My other uncle) that we would be getting some money. We have recieved 2 paymenta while the executer waited for a clearance certificate. We were never shown any documentation, we were never told how much to expect. First we got 2000.00 then 7000.00 and all we did was sign a piece of paper saying that is what we recieved. 2 1/2 years passed no clerance certificate, I called and asked executor what was going on and finaly he says he recieved the clearance certificate, but now he was waiting for the lawyer to create a trust fund for one of my sisters. So 5 months, we are still waiting for our final payment, we are still waiting for a trust fund to be made. And when I asked how much should I be expecting the executer tells me he doesnt have an exact number but he gave us about 80-90% and that he had to pay the lawyer..... Does all this seem right??? Ive never been throught this, should we have seen some kinda documentation showing us how he figured out the payments, can he hold a payment once he has recieved a clearance certificate for 5 months while waiting for a trust fund be made? Im so confused
ReplyDeleteParts of this sound right. Getting 80-90% while waiting for a Clearance Certificate sounds fine. Putting money into a trust for someone sounds fine, assuming that was in the will. My impression is that the executor is doing his best to follow instructions. Parts of this don't sound right, though. The problem I see, based on what you've said here, is that you were only asked to sign a receipt for the money you got. I can see that being ok for the first distribution of $2000 as that wasn't the bulk of the estate. I would have thought that at the time the main part of the estate was distributed (the $7000), the executor would have provided you with a set of financial statements. The statements should have shown what he's received into the estate, what he has cashed in or sold, what he's already paid to you, how much he is putting into the trust for your sister, how much he is holding back for the lawyer and how much he is holding back for tax. At this point you would be expected to sign more than just a receipt though. You should be asked to sign a release in which you approve of what the executor is doing. This is not necessarily the executor's failing. If he hasn't been an executor before, he probably doesn't know what he's supposed to give you, and is relying on the lawyer. I am also concerned about taking 5 months to set up a trust. That's absurd, unless there is something unclear about the trust that has to be clarified by the courts. Setting up a trust can be done within a few days.
ReplyDeleteLynne
re:my last post - april 16 2011
ReplyDeleteThanks Lynn for the information. I called the executer again today and now he says the trust is no longer in the lawyers hands, but now in the govenments and we now have to wait some more. Does this change the amount that is to be put into the trust? And if I have not seen any of these financial documents and have not signed a release should I ask him for this documentation? Or wait and assume he is being honest? I feel terrible asking for this documentation cause then it seems like I am accusing him or dont belive him, but I just want to know what im entitled to know.
My mom just passed away a few weeks ago. We have had issues of my sister financially abusing my Mom for many years. It was something that none of the family could do anything about. My Mom was at my sister's house the week prior to her passing away, during that week, she made up a funeral services list, a possessions list, and the name of the executor of my Mom's will was added on title of Mom's condo. This was all done without any other family members involvement, other than my sister. None of us were made aware of any of this until after Mom had passed away. The lists are in my sister's handwriting with my poor Mom's signature, and my sister's boyfriends signature. My Mom was in a lot of pain, she was on very strong pain medication. She was suffering from liver cancer, that had spread everywhere. Our family does not feel that this possessions list should be valid. Is it legal? Another problem we are having is that my sister used my Mom's credit cards after Mom passed away. I had some of Mom's statements and we called the credit card company and were given transaction dates, a lot of which happened after Mom passed away. I have asked the executor for these statements that cover this time frame, she is not willing to give them to me. (the executor is my sister's employer and friend) The family would like my sister to be charged with fraud, we feel that the executor is covering up a crime. Do I not have the right to see these? I am a specific beneficiarie, my children are residuary beneficiaries. I have yet another problem, my sister is the realtor of my Mom's condo. We have expressed our concern over this and it is being left as is. My brother and I do not have access to Mom's condo, why should my sister? Is that not a conflict of interest? My sister also got her way with many aspects of Mom's funeral, my brother and I's wishes were not met on many things. I am beyond frustrated, the treatment my Mom has received from my sister has been absolutely unforgiveable. I want it to end. Our family feels that she is still taking and taking from Mom even now that she is gone. We feel we are definitely not receiving equal treatment from the executor, actually far from it.I should also let you know that my Mom did make up a will this past October when she was still well. We would never disagree with anything my Mom decided on while she was still well. We also feel that if she wanted to do up a possessions list she would have done it then. We feel that my sister coerced her and pushed her into doing this. She has herself receiving almost everything. I am to receive one thing. My Mom and I were very close and I know my Mom would never do that.Please help.
ReplyDeleteHello
ReplyDeleteI need advice.
My older brother passed away Jan 2007.
My sister is the executor who has mishandled the estate with her red neck husband and a lawyer who does not do estate law.
The furnal home has not been paid.
They took the pension fund company to court and lost it.
London Life sent four checks to the four named beneficiaries.
Money was offered by one of them and was turned down by the red neck husband because they were going after the pension. It was given to my brother's second wife.
Now my sister and the two red necks are taking the four named beneficiaries to court to get the London Life money.
As aq brother what can I do to clear this mess up?
I am the executor of a will. My partner passed away 5 months ago. His 2 children and 2 stepchildren are beneficiaries of the will. My partner had been fighting with his ex common law wife for 7 years over a home that they owned. She never lived in it but at the time they purchased it was in both their names. But as soon as he passed away she had the title changed into her name. Went to the bank 2 days after and had the payments put into her name. Now I don't only have the will but a lawsuit with her to take care of. The kids now decided after 5 months they want to fire me because they don't like me. I have paid out of my own pocket 25,000 and if I step down will lose it all because they want to give their mom everything. I understand if I step down also there will be no will and that the step children will recieve nothing. I won't get my money back until the estate is settle if ever. I have never seen or done something so crazy as this right now. Thanks
ReplyDeleteHello. I'm so sorry to hear about the loss of your partner. And I'm doubly sorry that dealing with his estate has been so difficult.
ReplyDeleteWith respect to the house, if it was in joint ownership with his ex-wife, she was within her rights to take his name off the title. Joint ownership comes with a right of survivorship for the owner who outlives the other. But that's general information. Other factors might influence that general statement, such as whether or not you lived in that home, and whether you were legally married to your partner (as opposed to common law) and which province you live in.
I assume there is more I don't know about that issue because you mentioned a lawsuit.
The issue with the kids wanting you to step down is interesting (and I'm sure very stressful for you). Basically, they can't fire you because they didn't hire you - your partner named you to the job of executor. If you don't want to step down, you don't have to. If they feel they have legal grounds to force you out, they can ask a judge for that.
Having said that, I don't envy any executor who has to deal with hostile beneficiaries. On the other hand, being a beneficiary dealing with a hostile executor is even worse.
If you step down, it doesn't mean there "is no will". There would still be a will, just no named executor. The next step would have to be appointing someone else to take your place. That person (an administrator) would legally be required to follow the will.
I don't believe that you will lose your $25,000 if it was spent on estate-related costs such as funeral, maintaining assets, probate etc. But you're right that you wouldn't get it back until the estate settled. And keep that in mind as you debate whether you want to abdicate control of this estate in favour of those who would like to cut you out.
I strongly urge you to consult a lawyer. One with plenty of experience in estates. NOT someone who does one or two a year, but someone who does this every day. Some of the information that you're relying on is not, in my opinion, really correct and you would greatly benefit from talking over your situation.
I wish you the very best with this. Hang in there.
Lynne
Hi Lynne,
ReplyDeleteJust wondering what my rights are as a beneficiary...my aunt's will gave 15% to her church and the residue was then to be divided by the executor's following a seperate letter given to them by my aunt. apparently my aunt didn't want people to know who was getting what but am I entitled to know what she had designated for me???
Thanks,
Hi there,
ReplyDeleteThis is an unusual situation because it involves a combination of legal rights and moral obligations.
A "separate letter" given to the executor is generally not legally binding. It's a statement of wishes and will not override a valid will. This is assuming it's actually a letter or memorandum and not a codicil.
In cases like this, the actual wording of documents becomes very important. It's impossible for me to know the actual wording. For example, did your aunt leave the estate (less 15%) outright to the executors? This is usually what happens, along with a private side agreement between the aunt and the executor. I would not advise a client to do it this way, as on the face of the will, it appears that the only beneficiary is the executor.
I've seen wills where the testator (in this case your aunt) has simply said that they leave the estate to the executor to distribute as the executor sees fit, knowing that there will be a private document with directions. This kind of wording gives the executor full discretion to make any division he or she wants to make, including keeping 100% of it for him/herself.
As you can see, these are far from being good ways to set up a will.
It's possible that your aunt made up a schedule and incorporated it into the will, but this seems highly unlikely based on the wish for privacy that you have described.
At this point I don't believe you have many rights because a) you obviously are not a residuary beneficiary of the estate and b)even if you were a residuary beneficiary, that only entitles you to see the will, not private documents between your aunt and the executor.
Having said that, I have read cases in which a court upheld a moral obligation to distribute an estate a certain way. The downside to that is the fact that it takes a judge to decide the outcome.
Best of luck,
Lynne
Is the executor of an estate entitled to monetary compensation from the estate for the job that they have done for the deceased?
ReplyDeleteWhat a wonderful web we weave is all I can say. My spouse was told by his best friend that he would leave (x) property to him in the event of his death. He also told him it was left to him in his will. Upon our friend committing suicide, he had written a suicide note giving (x) property to someone else. Namely to family member of ex girlfriends, who is in part suppose to be named Executor. 6 days before he took his life , deceased friend, once again said that (x) was left to him. All of a sudden the ex girlfriend states that the note overpowers the will. But yet offered to sell (x) property to my spouse. Nothing has been probated through the courts and she has already changed things on the property. I doubt very much if she can do this.. it gets more tangled everyday... and can a suicide note be deemed as a Dying Declaration?
ReplyDeleteAs a beneficiary am I entitled to see the will and any financial papers of the deceased? I feel that one of the co-executors wife's has a personal vendetta to score against 2 of the heirs and she is wasting a lot of money in the process and my uncle is allowing this to happen. Also when they see the lawyer ( every 2 weeks) am I allowed to go and see what is going on , because I do believe this is very excessive and money is being wasted. Finally if the deceased gave on of the heirs a loan in 1991 (everything signed, still have the paperwork) and it was never repaid would this be deducted from any inheritance?
ReplyDeletethanks for your time.
Hi John,
ReplyDeleteThe general rule about seeing the will is that residuary beneficiaries are entitled to see the will and all probate documents, while specific beneficiaries are not. A specific beneficiary is someone who is getting an identifed gift such as a piece of jewelry, or the set sum of $500. A residuary beneficiary is someone who is getting a share of the entire estate, and whose inheritance is directly affected by expenses of the estate. For example, if an estate is "divided between my two sons", both of the sons are residuary beneficiaries.
Going to the lawyer every two weeks for an extended period of time is not usual. There just isn't that much to say or do that can't be dealt with on the phone or email. My guess would be that the executors have hired the lawyer to do the things that an executor normally would do, such as listing the house, paying the bills, keeping the financial records, gathering in assets etc. If this is the case, the executors should not expect to receive an executor's fee, because the executor's fee is going to have to cover the lawyer's fee.
Whether the loan to an heir is going to be deducted will depend in part on the wording of the will and on the relationship of the heir to the deceased. For example, when a child receives a large loan or gift from a parent during the parent's lifetime, that is something that should be deducted from the child's inheritance. That can be changed by the will, since many parents say in the will that they forgive any loans to their kids.
If the person who borrowed the money is not one of the kids, I would assume that it is someething that should be repaid, but as always there are circumstances that can change that.
If you can't get straight answers by asking your aunt and uncle what's happening, consider asking a lawyer to represent you to find out what's going on.
Lynne
I have 2 sisters who are the executors to my moms estate. If my mom is still alive can she make decisions about her investments that can override the executors if she feels her money is not being invested wisely?
ReplyDeleteThanks Debra
Hi setup (great name!)
ReplyDeleteAn executor is appointed under a will and has NO AUTHORITY WHATSOEVER until the person - in this case your Mom - has died.
It's possible that your sisters have been appointed under a Power of Attorney. Unlike a will, that document does give the power for someone to act while the donor (your mom)is still alive.
Assuming there is a power of attorney document, and assuming it has been properly and legally invoked into action (many require two doctors to sign)then the remaining concern is your mom's mental ability to make financial decisions.
If your mom is mentally capable of these decisions, then certainly she is entitled to make them for herself. If she does not have capacity, then it is proper for your sisters as attorneys to over-rule her.
Lynne
Hi Lynne
ReplyDeleteMy Mom recently passed away and my sister was named executor.
My sister has sent me a Final Estate Report. It includes withdrawals and deposits with a closing balance, plus a copy of "Asking For A Clearance Certificate" not signed.
My sister also sent a release form for me to sign saying I have received everything in full all sums paid.
When I emailed her and said she sent the wrong form my sister emailed back "Its a mater of trust". What do I do now? I don't want to hire a lawyer as it would put too much of a strain on the family relationships. Where do I go from here?
Thankyou Bruce
Hello Lynne, I could really use some information. My ex husband died in 2005. I have a child who was about 8 at the time. My ex-husband was under the care of the public trustee as a result of a brain injury. We have never seen any documents regarding his estate, and were not advised of the childs pension that my daughter was entitled to. I just happened to discover this from my sister this summer. I applied for the money, canada pension paid one year of back pay and refused to pay the rest claiming I should have filed sooner. How could I file for something I didn't know existed? The province insists they had no responsibility to inform me of anything. I still have no idea what happened with anything of his. I didn't even know where he was buried until recently. How can I fix this?
ReplyDeleteHi Lynne:
ReplyDeleteI am the executor for my aunt and uncle's estate. I live in Ontario and they are in BC. I am concerned that, when the time comes, I would have to leave work for an extended period of time to fulfill my duties. What is a reasonable amount of time to budget for the tasks immediately following their passing?
Hello Lynne:
ReplyDeleteCash gifts are distributed after the estate has paid expenses. If there are insufficient funds to pay the gifts are the prorated according to the funds available?
Thanks
Hi. I'm answering this question as a new blog post on March 13, 2012.
ReplyDeleteLynne
Hi Lynne
ReplyDeleteMy father passed away 9 months ago and to make a long story short, the executor closed his bank account before ensuring all taxes were covered and distributed the funds to the beneficiaries. To the best of my knowledge, she has no clearance certificate and my fathers estate (beneficiaries) now owe taxes. Can the executor be made liable as she did not fulfill her duties properly.
Hi Lynne,
ReplyDeleteMy father-in-law passed away in Oct. 2010. My brother-in-law was named executor. He has taken his time in probating and doing what is necessary for his sister to receive any cash assets. Is there a statute of limitations for him to complete the distribution of the assets to the rest of the family? Is there any legal action we can take? Thank you.
Wow I wish I had discovered your blog long before now, I'm at the accounting phase of things just looking for administration fee amounts!
ReplyDeleteI think this blog is incredibly helpful. My main issue as an Executrix is that the beneficiaries fail to grasp how long this process takes even if it is simple and straightforward. They want their money and fail to grasp that distribution can't even be contemplated on any level until the T3 tax return amount is known, which can't even be filed until a year after death and can take 6 months to get back. If someone with the ability to broadcast to the world (you lol) would make it known that an average probate length is 2 years and beneficiaries shouldn't be expecting money before then, that would be fantastic. I've worked my butt off to move this through as quickly as possible and still it will be 2 months shy of 2 years duration, I feel bad for the executors who beneficiaries here are complaining about time lengths mere months after death.
Hi. Thanks for the positive feedback. I really appreciated hearing that you find the information here helpful. I'm definitely out there "preaching" the wills and estates messages to the best of my ability :)
DeleteYou're right that an estate can take two years and that is very hard for beneficiaries to accept and understand. They won't really know how much work there is to be done on an estate until they become executors themselves.
The only thing I can suggest to executors is that they begin a consistent line of communication with the beneficiaries right from the start. At the beginning it might be once a week or every two weeks, and once the documents go to probate it could be once a month. It just needs to be a summary of what the executor has dealt with since the last communication, and some notes about what's pending. For example the executor might say that the house is now on the market and the realtor anticipates it will take 60+ days to sell. At least that way they can see some progress, and can also see that some things (like someone making an offer on the house) are not within the executor's power to speed along.
Lynne
I have a question,
ReplyDeleteI am trying to do the suggested fee schedule and I have 3 trusts that I am going to be handling for some time to come. My question is at what point do the expenses for administering trusts transfer from an estate expense to a direct trust expense? I already have found a fee guideline amount of 3/10 of 1% to 6/10 of 1%, but I am not sure at what point I am to indicate that expense upon the estate vs. when I start deducting it directly from the trusts?
I'm a little confused about the professional fees involved. My mother is an executor of a will and the lawyer who has assisted her with the proper legal forms etc, has sent her a lengthy letter and bill stating that his fees are to be paid out of her own pocket or rather out of her executors fee. It has been my understanding that all professional fees regarding the estate are paid out of the estate. Am I wrong in this? Thank you in advance for your comments.
ReplyDeleteI am the executor for my Mother's estate in B.C. There are two beneficiaries, myself and my sister. I have completed all taxes using a professional accountant and paid all taxes and debts. At the one year mark, I distributed over 95% of the estate to my sister and myself. However, just in case there was a tax audit or re-assessment, I held back some money in an estate account. I did not seek a clearance certificate from Revenue Canada because I felt it would be quicker and easier to get an agreement from my sister that if Revenue Canada sought additional money, she would pay her half. She has avoided agreeing to this and has finally said this is my risk and she would not pay her share. Recently I made another payment to her and she now has 99% of what she is entitled to. It is now two years since my Mother passed away. The amount left to divide is not large and although I really want to divide it and finish this off, I don't see why I should be put at risk should further taxes be owed. Should I seek a clearance certificate now given that it may take 6 months or more to get, or just pay her out and take the risk. Is there a time that is considered too long to make the final distribution? I feel my sister is becoming threatening and make take legal action against me. Please advise. Thanks!
ReplyDeleteHello just found your site and I am hoping you can answer a question for me. My father passes away july 19 this year. He was living in a lodge in Alberta and had very few assets. A few personal items and such. He had a small amount of money less than 20 thousand in The bank. My brother was named as executor with myself as alternate. Because of his job he has had to decline the position. We went to the bank to inform them of my fathers passing and set up an estate account until income tax and all bills were paid. He informed the bank manager his decision to decline the executor position. Now 2 weeks later they have informed me that they have frozen the account and that he has to go to a lawyer to step down as executor. Really? Is this really necessary ?
ReplyDeleteWhile you don't necessarily have to hire a lawyer, it's true that informing someone verbally of your intention to step down is not enough. The two weeks would have passed while the bank manager (who after all is not a lawyer) ran the will past the legal department, who informed him of this.
DeleteWhen a named executor steps down, it has to be done in writing. As you're in Alberta, your brother needs to fill in a form called NC12 Renunciation of Probate. If there was going to be an application to the court for probate, that NC12 would have to be filed with the application. If you're not filing for probate, attach the signed NC12 to the will and keep them together. Otherwise you as alternate will have no legal authority.
You'll see on my site a link to www.Canlii.org, a free legal research site where you can find forms.
But just so you know, I covered renunciation in Chapter 6 of my 2011 Alberta Probate Kit, and the form can be found on the CD that comes with the book.
Lynne
If my brother dies without a will and has no assets (only debts (income tax, credit union, etc.)) at the time of his death, does his work pension and life insurance become part of his estate if he named me as sole beneficiary. I also applied to be his trustee which was approved at least six months after his death. The income tax form for his pension was made out to me and I included it as my income and paid the taxes. I am a little confused when I read "estate" as to what consititutes an estate.
ReplyDeleteHi Lynn,
ReplyDeleteOur family has been waiting for a clearance certificate on an estate for over 5 years. The executor has told us to "stop bugging him" and is no longer responding to phone calls or even letters from our lawyer. There is a substantial sum of money in question, and we are just wondering if the best recourse is to request the estate accounting through the courts? We haven't seen any accounting since an initial pay out five years ago. We were told at that time that the remainder of the money was being held for CRA. Also, how detailed does the accounting have to be? If it is stated that there was a loss in an investment, can we request the specific proof of that or is a letter from his lawyer all that we are entitled to?
I must admit I am/was a horrible Executrix as I was too depressed to deal with my mom's estate and took a long time (almost a year) before I finally got a lawyer to work on things and probate the will for us and now I am getting anxious over not filing final tax returns on time and dealing with what the repercussions will be. My best advice is for people to see a lawyer asap and relieve some of the stress, because as I found out, waiting causes bigger headaches.
ReplyDeleteI'm sorry to hear it was so tough on you. If it helps any, you definitely are not alone in the struggle to deal with legal and financial matters when all you really want to do is grieve. Hang in there.
DeleteLynne
Can you tell me what happens if all heirs do not agree with the statement of accounts? Who looks at that and would the person(s) be contacted regarding why they do not agree with a statment of accounts? I disagreed with the stmt of accounts over a year ago and nothing has happened with the will since. The executor is not co-operative.
ReplyDeleteHi Kelly, thanks for this really good question. I've created a new blog post to answer it, as I thought everyone would like to know the answer, dated October 2, 2012.
DeleteLynne
My mother passed yesterday. My brother and I are named co-executors and co-beneficiaries of her will. Are there any issues we should be aware of with this kind of arrangement?
ReplyDeleteI'm sorry to hear about your Mom's passing.
DeleteYou and your brother should start by agreeing on open communication. Your decisions all have to be made jointly. If you're going to use a lawyer, go to the meetings together and ask that all correspondence be addressed to both of you.
The biggest issue with co-executors is the potential for disputes between them, with nobody neutral to defuse a tense situation. If you find that you two are arguing, please get outside help. Once the estate is divided and the tax returns are done, you two will still be brothers and friends if you can just avoid fighting. Your outside help could be a trust company, or maybe even an experienced estate lawyer.
If there are other beneficiaries, be fair to them and keep them in the loop.
If I can help, please send me your questions. Or, if you're in Alberta, get a copy of my book, Alberta Probate Kit, for tons of good information.
Lynne
Hi Lynne
ReplyDeleteI was just wondering how long an executor has to distribute the estate to the beneficiaries once the executor has received the signed releases?
Thanks.
I have a recent passing away of my grandmother. I was joint owners of the land where both of our houses are built on. It has been a week and yet no will produced and no executor proving they are executors. My sister says she is but will not produced the will or answer any questions. She did not come and plan the funeral or anything in the nature of the my grandmothers death she showed up the first time for the funeral. The if is executor has recently went bankrupt and officially threatened my mother today the only survivng child who's health is not good.
ReplyDeleteI have two questions one with the joint owned land I know that it is left to the surviving joint owner. So my question is the assets that are in the house that is on my property, does the executor have to prove to me that she is prior to allowing her in the house or can she break in while I am at work?
Second question how long can she hold the will without letting any of the beneficiaries know that they are beneficiaries or not?
Thank You