Can an executor get away with ignoring the instructions in the will?

Here is another letter from a reader who, as you readers tend to do, hit the nail right on the head with a question that will interest many of you.

"What can be some ramifications of an executor who disregards instructions that have been written in the will? I assume they cannot just get away with doing whatever they want can they?"

Executors get away with a heck of a lot, partly because they don't really know what they're doing and partly because the beneficiaries don't know either. This only gets worse when the executor either deoesn't hire an experienced estate lawyer, or hires one and ignores his advice. A large number of executors are under the impression that the estate they are looking after has been given to them to do with as they see fit, including re-writing the parts of the will they don't especially like, and of course this leads to trouble.

I'm glad to see you asking questions about this because beneficiaries and families in general need to know more about the estate process. There is no government agency that oversees what executors are doing. It's up to the beneficiaries of an estate to keep the executor on the straight and narrow, but that's not easy to do when you don't really know what the rules are.

Yes, there can be ramifications for an executor who disregards the specifics of the will. The severity of the consequences will depend on the facts of the breach. For example, an executor might ignore the will's instructions to sell everything, and give the beneficiary an item without selling it first. That would be considered less serious than an executor who decides to keep all of the money in the estate for himself without giving anything to the beneficiaries.

If an executor has simply made a mistake and realizes it, the objective should be to fix it to the extent possible without any need to punish anyone. However, court involvement is usually required to bring about any consequences for an executor because few will admit they've done something wrong, and even fewer will volunteer to correct their mistakes. The severity of the penalty is decided by a judge. Some of the things that judges will do fairly often are:
- remove the executor from the job of being executor
- reduce the executor's fee or withhold it altogether
- force the executor to produce a decent accounting
- set deadlines for the executor to meet
- force an executor to pay back money out of his own pocket

If the executor refuses to do as the judge says, the judge might ramp up the consequences. This could mean holding the executor in contempt of court, which could mean a fine or jail time.

If an executor has stolen from an estate, he can be arrested just like anyone else. Depending on the facts, this could lead to fines or jail time or other punishments decided by the courts.

Lately I've posted a few times about new cases involving executors who have been held accountable for not following a will. The courts seem to be cracking down on them, and for the sake of the families and beneficiaries who are at the mercy of the executors, I'm happy to see it.

Court removes executor who spent estate money on himself

One of the most common questions I hear on this blog is whether or not an executor can be removed for his poor performance on an estate. I've given my opinion that removing an executor isn't particularly easy to do, and it is absolutely not a rubber-stamp type of application to the court. A judge won't remove an executor just because a beneficiary isn't happy; you have to persuade the judge that the executor's behaviour warrants overturning the testator's decision to appoint him or her in the first place.

I'm always on the look-out for new information and cases that talk about the issue of removing an executor, and recently I found exactly that at http://www.whaleyestatelitigation.com/ .

The article I'm referring to is a case comment on the recent Ontario decision in the Murphy Estate. In that case, an executor, who was the son of the deceased, personally spent $20,000 of estate money and didn't pay it back. The judge said that the son's actions amounted to indifference as to the welfare of the beneficiaries, despite it being an executor's job to consider their welfare. The son was removed and his step-sister was appointed in his place. Click here for more details about the case and a link to the judgment itself.

I'm pleased with this decision, as it helps give clarity to the question of what kind of behaviour on the part of an executor warrants removal.

Will the judge remove the executor if I apply to the court?

The majority of the questions I received this week were from beneficiaries who are fed up with the executors in charge of estates in which they are involved. They said the executors are terrible and the beneficiaries want to go to court to have the executors removed. I can see their point. An awful lot of executors really are doing a terrible job, and some will no doubt be removed. I'd like to take a few minutes to take a closer look at this idea of a beneficiary applying to the court to remove an executor.

It's an uphill job. Nobody should think that getting an executor tossed out of an estate is quick or easy. First of all, there are two sides to every story (actually there are probably more like ten) and the court process for dealing with testimony can be lengthy. Assuming that the executor objects to being booted out of the job, there may be affidavits filed, counter-affidavits filed, examinations on affidavit (in-person cross examination of what you said in your affidavit) held, undertakings given. This could take months.

The real obstacle to removing an executor is the fact that he or she was chosen by the deceased. If a judge removes the executor, the judge is in effect re-writing part of the will. They don't take that lightly; in fact judges will make every effort to uphold the terms of the will as much as possible.

If you apply to the court to ask that the executor be removed, the judge has more options than simply saying yes or no to that request. In fact, the lawyer that helps you bring your application to court should know this, and suggest some of those less drastic options that might work for you as a back-up in case the judge does say no. The judge may try to get things back on track with the current executor.

For example, if the problem you're having with the executor is that she simply will not give any information and you believe that money has gone missing, the judge might order a passing of accounts. As another example, if your complaint is that the executor is simply dragging his heels and isn't doing anything at all, to the detriment of the estate, the judge might impose a deadline for taking certain steps. Depending on the issue, the judge could order the sale of a house, direct mediation between certain parties or set executor's compensation.

Keep in mind that if you're proposing that an executor be removed, you'd best have a replacement in mind. The best option would be an alternate named in the will, if there is one. The judge may not think that having an estate with no executor is good for the estate, and having nobody in charge definitely isn't going to resolve your concerns.

This is not to say that it's impossible to remove a rogue executor. It certainly does happen. It probably needs to happen more often than it does. Sometimes in the really egregious cases the executor ends up in jail either for theft from the estate or for contempt of the judge's orders. In other, less dramatic, cases the executor isn't jailed but is released from his or her duties, perhaps with costs assessed against him or her by the court.

I look at this as a positive thing. Yes, I'm a born optimist, I know that, but look at it this way. Maybe the only thing you can think of to fix a broken estate is to remove the executor. Seeing an experienced lawyer and getting in front of a judge brings you face to face two very knowledgeable people who can help you with that estate. They will suggest solutions that you might never have thought of.

Beyond a will: filling an emotional gap

As a lawyer, my job is to find legal solutions to problems and to put legal plans into place to prevent legal issues from arising. But one thing I know for sure about estates is that there is so much more to them than just legal issues. Sure, there are financial and tax matters to deal with too, but what I'm really talking about are the human issues. The interactions between beneficiaries and executors, and beneficiaries with each other.

A legal document can only do so much. It can appoint an executor and outline the legal requirements of the job. Do the inventory, it tells the executor. Pay the taxes. Divide the estate. That's all well and good, but it can't regulate how people treat each other. Where does it tell the executor to treat the beneficiaries kindly and to be patient because they've just lost a loved one? Where does it tell the beneficiaries that there is enough for everyone so there is no need to elbow each other to get a little bit extra? Where does it say that it just doesn't matter that your brother pushed you into a puddle when you were ten and that should have nothing to do with how you act now that you're the executor?

Unfortunately none of this can be found in your will. In fact, the more of this you include, the more you might impair the clarity of the legal intent of the document. For example, today I reviewed a will for a woman who appointed her two daughters as executors "in consultation with" her two sons. Where the heck does that leave the sons in terms of legal authority? Are they executors or not?

I believe the woman in question was thinking ahead, and realizing that her sons would want input into how the estate was to be administered, and foreseeing a bit of a communication issue. She tried to forestall it by directing her daughters to consult the sons. The wording at present doesn't work legally, but that will be fixed. What is more difficult to fix is the communication issue itself.

Why do so many executors who are otherwise rational people behave like little Napoleons once they are appointed by a will? Why do so many beneficiaries expect their inheritance within days of someone passing and throw temper tantrums if they don't get it right away? Why are so many families turning on each other? It's sadness and shock at losing someone, I believe, magnified by the stress of being tossed into an unfamiliar legal, financial and emotional situation. Add in a few childhood rivalries and a healthy dose of family politics and the result is a witch's brew of an estate.

I know it isn't strictly my job as a planning lawyer to do anything beyond create the legal documents necessary. Back in the days, not so long ago, when I spent my days probating wills and administering estates, my job was still restricted to legal procedure. But I've always found it hard to stay within those parameters when I see families upset, angry and lost during an estate. I've always done more. I've taken executors out for lunch and beneficiaries out for a beer. I've spent hours talking down sobbing family members on the phone late at night. I've fetched hot blankets for dying people in palliative care wards and visited clients of all ages in the hospital. I'm not looking for a medal; plenty of other lawyers and trust officers I know do the same things. My point is that during an estate situation, people need comfort, kindness and information beyond what's in a legal document, and they usually don't get it.

But if it's not my job, whose is it?

I believe the unwritten role of the executor and the beneficiaries is to be co-operative, patient and above all, kind to each other. It's their job to get along and to treat each other with respect. However, I've been around this business long enough to know that generally people simply don't behave patiently and respectfully during an estate, family or not.

Too bad there isn't a legal document that removes executors who act like jerks and beneficiaries who behave like children. I'd be glad to draft one up.

Can I be removed as co-executor because I live outside the country?

The rights and duties of an executor continue to be a mystery to most people. I'm still learning new things about estates after 25 years on the job, so I know how tough it is to fully understand what you are supposed to be doing or not doing.

The following is a question received here on my blog that I believe will interest a number of readers, as so many of you are executors yourselves:

Can a family member who you were co-listed as Executor and Power of Attorney remove your name due to the fact that you live out of the country?

Whenever a question about rights under a document arises, the first place to look is the document itself. It's not unusual for a will to state that if an executor or co-executor lives outside of the country, he/she loses the right to act as executor. While this might appear that it's the co-executor who is removing you, it's really a matter of the executor following what's in the will. Ask for a copy of the will and Power of Attorney so that you can check on that.

When you are named in a will as an executor, or named in a Power of Attorney as an attorney, in law this is considered a benefit, in that you've been given a right. The person who named you gave you the right to administer the estate, or to administer his/her finances while he/she is incapacitated. That person had his/her reasons for choosing you. This is not something that a co-executor or co-attorney can decide; the document states who is in charge and if the co-executor or co-attorney doesn't like it, he/she can choose not to act. Having said that, I can tell you that I've seen a huge number of co-executors and co-attorneys try to re-write the testator's wishes by deciding that a different arrangement would be "better". Unfortunately that only means better for them, not necessarily better for the estate. They get away with it simply because nobody challenges them.

Assuming the will and Power of Attorney that appoint you are valid, you have a choice not to accept the appointment if you think it will be too difficult from your location. You would sign a Renunciation form that would remove you. However, this is something you choose to do, not something that others choose for you.

How do I change executors?

I'm often asked this question, but before answering I always ask whether the person's whose Will it is (the testator) is still alive. In other words, are you trying to change the appointment of an executor in a Will, or are you trying to change an executor who is already in charge of an estate?

A person can change his or her choice of executor in the Will as long as he or she has mental capacity to do so. Changing the executor doesn't necessarily mean making a whole new Will. If you are happy with your Will other than the executor named, you can have a Codicil made that only changes the executorship. A Codicil is simply a new, brief document that amends your Will. It is much like a Will, in that all of the rules for Will-making also apply to Codicils. The advantage to having a Codicil made is that the process and the document are shorter and less expensive.

The Will and the Codicil must be kept together so that they can be read as one document.

If you are interested in changing an executor who was named in the Will but who has not done anything on behalf of the estate, and who doesn't want to do anything for the estate, that executor can opt out. The legal term for it is renouncing the right to be an executor. An executor might renounce if he or she is too ill to be the executor, if he or she has moved very far away, if he or she has lost mental capacity, if he or she doesn't get along with the family members, or for other reasons.

The important thing to remember about renouncing is that it can only be done right at the beginning of an estate before an executor does any work. Once the executor takes any steps at all as executor, he or she can't quit being an executor until the court says so.

If an executor renounces and there is an alternate executor named, the alternate executor can then take over and be in charge of the estate.

If there is no alternate executor named, you are left with a Will that is completely valid except that there is no executor to carry out the work. At this point, someone will have to be appointed as an administrator of the estate. The Will is still used, but the court will appoint an administrator to do the work that the executor would have done.

If an executor is part way through the job of being an executor and wants to resign from it, he or she must ask the court for permission. At that time, the executor will be required to give a full accounting of all financial transactions that he or she has done on behalf of the estate. This includes an update on the current balances and values of all accounts, properties and other assets, and an explanation for each expenditure. This process is sometimes called passing of accounts. Until the court has approved the accounts and dismissed the executor, he or she remains the executor.

Sometimes the family members want to change or remove an executor who they believe is not doing a good job. They want to remove someone who doesn't want to be removed. This is not easy. The court will not want to remove an executor who was chosen personally by the executor without very good reason. It is pretty nasty litigation most of the time, and not something that should be attempted lightly.