Why is abuse of the estate legal system allowed to continue?

I received an email recently from a reader who expressed sadness and frustration over the administration of her parents' estates in the hands of her siblings. This reader touched on a topic that is of great concern to me and to many others: the abuse of the estate system. Read on to see the reader's note and my comments.

"Two of my sisters  approached my 92 year old mother to become Executors after my father passed away and upon my mother's passing have since smiled and waved passed every so called "check point" in the legal estate system. I've watched incredulously as they've come to the end of two years, no release signed by beneficiaries, no passing of accounts, keeping everyone at arms length..and having done whatever they want regardless of our requests. I read over and over how commonplace this is and yet, the rules and regulations have not tightened. Why is this allowed to continue?

In our case, it's out and out craziness, and, not at all the intent of our hard working, hard sacrificing, immigrant parents...not, at all. This has done irreparable damage to the next generation."

In theory, it's not allowed to continue. All of the things you've mentioned are covered by our existing laws. We have a Trustee Act in every province and territory that regulates how executors are allowed to behave. We have Rules of Court that describe how estate processes work. We have courts that hold people to their roles. We have criminal laws that punish people who engage in fraud and theft.

The problem is not so much in the law as it is in the enforcement of it. It's a complex issue. When the beneficiary of an estate sees a problem with an estate, he or she has to proceed through the civil court system to get a judge to enforce the law. This requires a number of things, such as: knowledge of the system, awareness of the rights of beneficiaries, competent lawyers, affordable legal advice, informed judges, accessible courts, and the willingness of individuals to engage in legal hostilities with family members. Many of these are beyond the reach of average Canadians. The cost alone makes enforcement of rights inaccessible for many folks, even if they knew how to go about it.

You're right that financial abuse of estates is widespread. There are several other factors that have led to this perfect storm of rogue executors and beneficiaries. One of the main reasons for the ugly state of current affairs is that estate laws were for the most part created almost two centuries ago. Society was a lot different in the 1800s when estate laws went through their watershed changes that resulted in today's principles and concepts.

Back then, an honour system actually worked most of the time. Today, not so much. Today towns and cities are bigger, allowing less interaction between individuals and their neighbours. This means that bankers, lawyers, police, doctors, and clergy don't necessarily know what's going on with seniors. They don't know which of the kids has been taking care of Mom and who has been estranged for the past 10 years. They don't know who was arrested or declared bankruptcy. Privacy laws can protect individuals but they can also isolate them,

There has also been a major shift towards keeping estate matters within the family. You would think that would protect people, but the opposite is true. At one time, people often chose their executors from among prominent citizens such as businessmen, lawyers, clergy, police commissioners, and local politicians such as mayors and MPs. They did this partly to gain an executor with skills such as literacy and fluency with money. It was also party because the executor would have a public reputation to protect and would therefore behave honestly with regard to the estate.

These days people almost always choose their own children, however poorly suited to the job, and sometimes those children don't feel they have to answer to anyone. There is a vast sense of entitlement awash in our society today and it is most evident when it comes to estates. Some people's kids can rationalize all sorts of theft from parents and pressure on parents to hand over valuable assets such as homes and bank accounts. Nobody from outside the family sees what is going on so it leaves it up to siblings to start lawsuits against each other if they want to stop the abuse.

I strongly believe that in our country, we need a public office that oversees estate administration. We need a registry for executors who should have to file certain documents within specified limits. All parties to the estate would know that documents are going to be examined by this office. Executors and beneficiaries alike should be aware that failure to adhere to the rules may lead to them being removed from the estate altogether. There should be a roster of knowledgeable lawyers and mediators available and an expedited court process for disputes.

I don't expect to see such an office in my lifetime but after 30 years in this business I honestly believe that executors and beneficiaries need help. The system is outdated and inaccessible. Families are being destroyed, estates are being plundered, and resources are being wasted.