If you're the executor, walking away is going to make a mess - for you.

Being appointed as executor isn't always something we welcome. It's a lot of work and carries personal  liability if you do it wrong. But when you're in over your head, don't just walk away from it. Walking away doesn't absolve you of anything. Ask for help! You can hire a lawyer to advise you as to what needs to be done, or a trust company to actually do some of the work for you.

What's the wrong thing to do if you're put in charge of an estate? One really bad choice is simply to ignore it. This reader wrote to me recently to tell me her story. Anyone who is an executor, or who may be an executor one day, should read her note and my comments:

"A friend passed and named myself or my husband executor and also sole beneficiaries. The house had a secured LOC on it and we handed over the keys after telling bank no more payments would be made on LOC. I was initially executor and stepped down due to personal reasons. I have had a couple cheques come to me for the estate. I went to deposit them and was told by the bank that they drained the account and closed it 5 months after death? The bank had a copy of the will and death certificate .. now what do I do with these cheques I recently got?"

This type of letter concerns me. I see a fair number of estates where people have no idea what to do, never get legal advice, and just do whatever occurs to them at the time. This causes a number of legal tangles for the executors. I'm not saying they are bad people because most are not, just that they are doing a bad job on the estate.

As I read this letter, I found it impossible not to notice that it was full of vague or incorrect information. For example, "myself or my husband" could not have been named as executors. A will cannot say A or B is the executor. It has to say either that A and B are joint executors, or that A is the executor, and B is the alternate if A cannot finish the job. In other words, you didn't really understand who was appointed as executor, but took on the job anyway. Also, you mention that two people are "sole" beneficiaries, when "sole" means one. Does this mean that you were both named as beneficiaries, or you're just saying "we" instead of "I"? It makes a difference legally.

Even more concerning is the statement that you "stepped down due to personal reasons". Now, doing that wouldn't be the end of the world if it were done properly, but it appears that "stepping down" in this case simply meant that you didn't want to do it anymore so you didn't.

In law, there are only two  legal ways to step down from being the executor once you've started the job. One is to pass away. The other is to ask the court to dismiss you. Just deciding not to take care of it anymore doesn't mean that you have stepped down and it doesn't absolve you of your legal responsibility to the estate. You're not allowed to just walk away because being an executor and trustee is a fiduciary responsibility.

You didn't say that you just walked away, but I'm inferring that because it appears that no other executor was put into place. Not even your husband, who you said might also have been appointed by the will. You didn't mention passing of accounts, which the court would have required of you had you applied to step down. Your understanding of the will and the estate assets seems vague. These facts lead me to believe you just turned your back on your legal responsibility.

If the court hasn't formally dismissed you, you are still the executor. It doesn't matter whether you want to be or not; you simply are. You're still responsible for the debts of the estate. You're responsible for that bank account (are you really surprised it was closed, when you ignored it for 5 months and told the bank that you weren't going to deal with it?) and for the cheques that have arrived. The only reason nothing has hit the fan on this estate is that there are no other beneficiaries to complain about the way you're handling it.

While you may be safe from unhappy beneficiaries, you should be careful about paying the debts. As you have not legally "stepped down", you are still responsible for paying the debts. A creditor who has not been paid may well decide to come after the estate for payment. If you've wasted the estate, or failed to maximize it by simply handing over keys without even trying to sell the property, you may find yourself paying liabilities personally. In addition, Canada Revenue Agency may not be happy with you if you have failed to file tax returns for the deceased or for the estate (if there are any). If CRA assesses penalties or interest on unpaid taxes, you  may end paying those yourself, too.

You've made a mess of this. The question you asked is what you should do with the cheques  you've received. The answer is that as the executor, you need to open an executor's account, deposit them, and pay the estate debts and taxes. Once the debts are paid, distribute any remaining funds according to the will.

However, you really should have asked a few questions months ago. Since you really didn't know what to do, you should have asked a lawyer. You may get away with this mess just because there is nobody to complain, but only if you're lucky.