Rights and Remedies of Beneficiaries Against the Executor
As I discussed in Part 1 of this blog entry, executors do not have free reign in the administration of the estate and this should provide some comfort to beneficiaries. That said, if a beneficiary is concerned that an executor is not meeting his or her duties and obligations, then the following remedies are available to the disgruntled beneficiary.
Right to Accountability
In terms of an executor’s duties to account to the beneficiaries, residuary beneficiaries (beneficiaries who receive a share of the estate after specific gifts, expenses and debts have been paid) are entitled to see all the accounts and records of the administration of the estate. Therefore a disgruntled beneficiary can take some comfort in the fact that they have a right to this transparency.
Mechanisms Available to the Disgruntled Beneficiary
- Passing of Accounts
A beneficiary also has the power to force a passing of accounts, which means that the executor must prepare an accounting using a specific format. While an executor is legally required to pass his or her accounts within 2 years of the grant of probate, a beneficiary can compel the executor to pass his or her accounts annually. If the executor refuses to pass his or her accounts, or the beneficiaries are unhappy with the accounting provided by the executor, they can apply to the court for a formal passing of accounts, which involves a court hearing. Although a powerful tool available to beneficiaries, it is often an expensive and time-consuming process.
- Objecting to Executor’s Remuneration
Another mechanism available to the unhappy beneficiary is to object to the executor’s claim for remuneration. While an executor is usually entitled to be remunerated for his or her work, often conflict arises as to how much the executor is entitled to. Unless the will specifically states what the executor’s remuneration is, then remuneration is based on provisions set out in BC’s Trustee Act. The Trustee Act places a limit on the amount of remuneration which can be received by the executor, however case law in this area has generally established that the upper end of what an executor can claim should be reserved for large and/or complex estates, or ones that required a great deal of time and skill in their administration.
- Applying to Remove the Executor
If, despite these mechanisms, the beneficiaries are still unhappy with the executor and issues between them have not been resolved, then the beneficiaries may want to consider removing the executor altogether. This step should generally be kept as a last resort, or reserved for serious cases of misconduct or mismanagement because it is an expensive, time consuming, process. There is also, as is always the case with any court action, some risk involved for the beneficiaries in that if their claim for removal of the executor is weak, the executor could receive special costs from the estate.
As the above discussion should make clear, disgruntled beneficiaries are not powerless to executors. However these issues are complex and people are encouraged to seek legal advice.
** Disclaimer – This blog does not provide legal advice and should not be taken as such. For proper legal advice on the above issue you should contact a lawyer.