Toronto Estate Dispute

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The Executor’s Duties and Responsibilities

It is not uncommon for beneficiaries to run into problems with the executor when an estate is being administered and distributed. More often than not, these issues are the result of a lack of communication on the part of the executor, or a lack of knowledge, rather than any intentional wrongdoing or mischief.  Although the frustrated beneficiary may want to remove the executor immediately, this is not always necessary, or prudent depending on the circumstances.

Related: Frequently Asked Questions About Estates

Toronto Estate Dispute

Before beneficiaries jump to applying to having an executor removed, they should be aware of not only their rights as beneficiaries, but the corresponding duties and obligations which are owed by executors.

Executors do not have free reign in the administration of the estate.  Rather, executors have a number of duties and obligations which require a level of accountability, transparency and diligence when they are administering the estate.  This should provide some measure of comfort to unhappy or worried beneficiaries.

Toronto Estate Dispute – Executor’s Duties

An executor’s principal duties under the Estate Administration Act include:

1.     Protecting the Estate:

collecting the assets of the estate;
ensuring the assets are not being wasted;
determining if the estate has any outstanding claims against someone and if so, whether it is in the estate’s best interest to pursue that claim.

2.     Valuing the Estate:

dealing with creditors and claims, including tax issues;
preparing an inventory of all assets and liabilities;
determining benefits due under insurance policies and pension plans;

3.     Administering the Estate:

converting assets to cash, unless the assets are bequeathed to individuals under the will;
arranging for probate of the will, if necessary;
settling all claims and debts;
investing estate assets, if appropriate.

4.     Distributing the Estate:

distributing estate assets to the beneficiaries[2];
paying any legacies and other bequests;
preparing a full accounting of the estate’s administration, which must be given to all the beneficiaries for their approval.
Although the above listed duties and obligations merely touch the surface of this subject matter, the point is that beneficiaries are not powerless and can demand accountability and transparency from the executor.

** 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.

Have a Toronto Estate Dispute? Call 1 844-618-8080 (toll free) or text 778-676-3808 after hours.

[1] Soon to be replaced by the Wills, Estates and Succession Act  – for more information please see Jessica Maude’s Blog http://hart-legal.com/estates-changing-laws-in-bc/

[2] Note: Executors have one year from the date of death to distribute the estate assets. This is called the “executor’s year”.  Therefore, beneficiaries cannot make an executor distribute estate assets until the executor’s year is up.

Rights and Remedies of Beneficiaries Against the Executor

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.

Have a Toronto Estate Dispute? Call 1 844-618-8080 (toll free) or text 778-676-3808 after hours.

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 a Toronto Estate Dispute you should contact a Toronto estate lawyer.





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