One of the clauses in the will that was raised by the executor in his defence is the one that allows an executor to retain estate assets for as long as he deems reasonable. This is a standard clause, one that I use consistently, as do many other lawyers. The executor argued that this clause means he can take as long as he likes. The court disagreed and said that this clause does not override the executor's duty to settle the estate.
The key word that was repeated many times is "REASONABLE". So, executors, ask yourself whether your delay is reasonable (in the eyes of someone other than yourself).
Another interesting aspect of this case is that there was no precedent for a court ordering an executor to distribute some of the estate. In fact, the executor argued that the court didn't have the power to do so. Again, the court disagreed. The executor was ordered to make an interim distribution of part of the estate.
This may be a new weapon in the battle against out-of-control executors, keeping in mind that in this case the delay was exceptionally long.
Click here to read Mr. Rule's excellent analysis of the case.
My grandmother died in 1995. My aunt, who had resided with her continued to live in their family home. She was named as co-executor along with the lawyer who had drawn up my grandmother's will. The will left 1/2 the estate to my aunt, and 1/4 each to my brother and myself. My aunt continued to live in the home until 2008 when she was hospitalized and transferred to a nursing home. Neither she, nor the lawyer (who was unaware of the death) ever probated the will nor distributed the proceeds. As we had no copy of the will, we were unaware of its contents until gaining access to the house in 2011. The house had sat vacant for 3 years and my aunt had allowed insurance to lapse. She was a hoarder and had allowed no access to the house since my grandma's death. She eventually allowed my brother a key to retrieve some personal belongings and he found a safety deposit box containing the will amid the garbage and clutter.
ReplyDeleteWe approached the lawyer named as co-executor. He agreed to be trustee as named by our grandmother to obtain probate and distribute the assets. On his advice, we paid for a psychiatric evaluation to be done on my aunt. Though uncooperative, she was deemed by the doctor to be "sharp as a pencil". She failed to take responsibility as appointed trustee but never declined to do so legally, leaving the lawyer to apply for probate 16 years after her mother's death.
As trustee, he passed most of his duties to my brother and myself and never visited nor inventoried the property. We hired the realtor he recommended and were largely responsible for securing the property, changing locks, re-establishing insurance, extensive cleanup and disposal costs. As a result, the property was sold within a week, and I still have nightmares over the hasty disposal of the property and its contents without due consideration.
Although the proceeds were deposited in the lawyer's general trust account, no interest was paid was held back a further 7 months without interest. Further delays were encountered because my aunt had not filed tax returns for neither my grandmother nor herself since 1995. We were collectively responsible for capital gains on the property.
The lawyer continued to deny further distribution for another year despite accountant's assurances that no more income tax was found to be owing. Yet, he not only took his executor compensation in advance but charged us unspecified legal fees for any phone calls and correspondence in relation to the estate (usually to provide information he had requested of us or re-submit documents he had lost!) He billed us for any communications regarding the estate despite reassuring us that as Trustee he could NOT accept both.
Many excuses (he was ill, away, busy, forgot...) were given for not having applied for the clearance certificate.
After finally receiving CRA Clearance this past May, he attempted to give my aunt a cheque for final distribution without providing details of the legal invoices he had billed.
When I questioned those invoices and requested further division of fees between executor and lawyers duties, he altered and reworded them substantially and offered to waive the smaller invoice (all itemized for tasks which he had already been compensated).
My emails for clarification have been largely ignored and written requests remain unanswered or done so in an untimely manner resulting in months more of delays.
I'm sure he earns more money in one day that is remaining to be distributed < $10,000, but I am willing to spend my share to force a passing of accounts and to get an explanation for what I feel are unreasonable charges as he delegated the lion's share of his executor duties.
So, as consulting another estate lawyer would cost considerably more than what remains, should we just accept the final distribution and waive our rights to any further accounting or compensation?
Is his lack of professionalism and mismanagement worth reporting to the Law Society?