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Tuesday, February 23, 2021

Beneficiary acquiescence to executor's bad behaviour may mean the executor gets away with it

Are you familiar with the term "beneficiary acquiescence"? This term means that an executor has in some way - large or small - breached his duty but the beneficiaries did not object to it. The term has real impact on whether an executor can be held liable for the breach, so I am going to discuss it here for those of you who are either executors or beneficiaries.

Let's say an executor begins working on an estate but really isn't doing the best job. Perhaps that executor is taking too long and while he is working on the estate he is living in the deceased parent's home, driving the deceased's parent's car, and using the deceased parent's bank account to pay the household bills. Now this can happen in the short term without causing an issue. By short term, I mean a week or two while the executor arranges the funeral, notifies everyone, and gets everything started. But let's say in our example that the executor is still in the same place two years later. The beneficiaries haven't received anything. The house hasn't been sold and now the value of the property has fallen. The bank account is emptying out. The executor is comfortable and is in no hurry to administer the estate.

Can the beneficiaries turn to the courts to compel this executor to get on with it? Is the executor going to be liable for the financial loss to the estate?

On the face of it, the answer is yes to both of those questions, but a lot of it depends on how the beneficiaries have behaved while the executor was in breach.

Did the beneficiaries raise any objections? Did they demand that the executor get on with it? Did they hire a lawyer to try to force him out? Or did they simply never mention it?

Legally speaking, if a beneficiary is aware that an executor is breaching his duty and that beneficiary just shrugs and looks the other way, this will reduce the beneficiary's chance of holding that executor accountable. You can imagine the question: after two years, why come forward now? Why were you okay with it for two years but you're not anymore?  The longer the situation goes on, the more this works against the beneficiary. An executor is entitled to use the beneficiary's lack of objections as a defense. If it is used successfully, it can mean that the executor gets away with the breach and possibly even that the beneficiary is dinged with court costs.

This doesn't mean that if an executor is in the parent's house for a couple of weeks too long, the beneficiary must rush out and hire a lawyer. Far from it. It does mean that the beneficiary should ask questions about what is going on and urge the executor to get on with it. Emails and texts are better than telephone conversations because they can be saved for later use. A beneficiary who is not okay with what the executor is doing should say so, although I do recommend that a beneficiary refrain from telling the executor about the law if the beneficiary has not talked to a lawyer. 

The bottom line is that if you're a beneficiary who has ignored bad behaviour by the executor for a long time, you may have lost your chance to be compensated for it.





5 comments:

  1. Lynne,
    Another excellent post. I would like to add more as it relates to my matter, but until I can, I remain muzzled.

    Webeye

    ReplyDelete
  2. This term seems so vague as to be a prime swamplaw example. So, does a beneficiary have to "hire a lawyer" to know when an executor has crossed the legal line of "dawdling"? Most beneficiaries would just speak or telephone call an "objection" is a guess. What do multiple beneficiaries do with multiple executors? Do all beneficiaries have to pre-determine any and every instance of "dawdling" in print? The lawyers fees to be pro-active in the pusuit of this concept would be monstrous amounts in Toronto! Is there an exact definition of this term in any Province? Is this "swamplaw" at its dirtiest? Thanks for any clarity.

    ReplyDelete
    Replies
    1. Hi Oldman,
      I've never heard the word "swamplaw" before so that's a new one on me. You seem to suspect that this is a sort of legal game construct designed to screw beneficiaries out of their inheritance. I have to ask you why you think the law, the legislators, and the lawyers would possibly all want that?

      If you want a more precise definition than what I have provided, I think you'll have to do some legal research into cases in which the term was applied. The best and easiest (and free) website to use is www.CanLII.org.

      Lynne

      Delete
  3. https://swamplaw.com/
    The above url relates to- Harrington & Myers - Louisiana (New Orleans)
    Swamped By Debt? - Harrington & Myers May Be Able To Help!
    This is a US Law Firm.

    webeye

    ReplyDelete

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