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Friday, February 22, 2019

Do beneficiaries have rights when it comes to distributing household goods?

Recently a reader sent me a note asking about beneficiaries' rights. This isn't an easy topic to get answers about, so I thought I'd discuss the question here.

"Do beneficiaries have any rights? if 4 beneficiaries why is only 2 get info and not the other 2? Is it ok that executor and 2 beneficiaries sold/thrown out/gave away/took everything but left nothing for 2 beneficiaries? What can be done?"

It sounds as if you are having a pretty tough time with an estate. I wish I could say that didn't happen often, but it certainly does.

I can only guess why two of the beneficiaries are getting information and two are not. The first thing that comes to mind is that the two who are getting information are residuary beneficiaries and the two who are not getting information are specific or non-residuary beneficiaries. At least, that would be a reasonable explanation if the executor knew what he was doing. This is a key point because residuary beneficiaries (those getting a piece of the estate) have many more rights than non-residuary beneficiaries (those getting a specific item or set sum of money).

Let's face it, there are plenty of other reasons why this could be happening. Not all executors do their jobs properly, either because they don't know any better or because they simply don't care.

You said that the executor and two of the beneficiaries "sold/thrown out/gave away/took everything". I assume by this that you mean the household and personal goods were distributed and cleaned out without any involvement of two of the beneficiaries. To figure out whether this was correctly or incorrectly done, you will have to refer back to the will. What does the will say about distribution of the household and personal goods? Does it refer to a Memorandum or list? Does it actually say anything at all? Unfortunately, an awful lot of wills just ignore personal and household goods.

If the will doesn't say anything specific about household goods, then they must be treated as if they are part of the residue, and divided among the residuary beneficiaries. This is where things get tangly. Who gets to decide who gets what? Who is involved in the decision-making process? Typically an executor will try to work with a family to accommodate wishes of various people, but he doesn't have to when the will gives no instructions. The key to a successful distribution is for the executor to be neutral among the beneficiaries and not favour any above the others.

The executor is entitled to decide that some items are worthless and to throw them away. Typically these are items like bed linens or half-consumed grooming products. The concern is not about those items but about jewelry, furniture, family mementos, decor items, antiques, collections, and items of high dollar value. Most executors will devise a system such as drawing straws or asking each child in descending order of age to pick something, then reverse and ask in ascending order. At the end of the day, the final decision over any given item is up to the executor.

So, to answer your question about whether it was okay for the executor to distribute the way he did, I have to draw some assumptions. I have to assume that the will gives no specific instructions regarding the household and personal items and just lets them form part of the residue. I have to assume that there is no Memorandum that addresses specific items to give away. I also have to assume that all four beneficiaries are residuary beneficiaries. If all of those are true, then the executor should be treating all four beneficiaries the same in terms of sharing information, distributing household items, and in giving opportunities to participate in the division of items.

As for what you can do, that is pretty limited in terms of household items. If some have been thrown away, they cannot be recovered. Any re-distribution of items that have been given away would have to have the co-operation of the other beneficiaries. If it cannot be done voluntarily, you would have to resort to the courts to try to hold the executor responsible for an incorrect distribution, and that is tricky. When there is a discretion to distribute items (which discretion the executor has) then it's hard to show that he exercised it incorrectly. Even if you win the case, you might not get any of the household items back. You might end up spending an awful lot of money for a minimal result.

It can be tough for beneficiaries to know where to turn. The estate lawyer doesn't represent them, so where can they get info? Check out my book called The Beneficiary's Answer Book. You can find it at Indigo stores, or online at Amazon, Barnes & Noble, etc.

1 comment:

  1. Lynne,
    Another good question/response that many can use. As always, thanks.



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