League and Williams Lawyers

Tag: executors

  • What are the consequences to Executors for breaching trust?

    What are the consequences to Executors for breaching trust?

    Executors have a duty to act in the best interests of the estate and its beneficiaries. Occasionally, executors act in breach of this trust, often accidentally. However, there are ways in which courts can impose penalties for executors breaching trust. Overall, executors have an obligation to administer the estate in a timely manner, in the interest of the beneficiaries. To summarize, some of the most common ways an executor is found to be in breach of trust include:

    • Commingling of estate assets with their own personal assets,
    • Fraudulent behaviour,
    • Not accurately reporting an estate’s assets in the detailed accounts, or
    • Failing to pay an estate’s debts.

    Depending on the severity of the breach, courts can choose a consequence to remedy the losses suffered by beneficiaries. Possible consequences that the courts will consider are:

    • Reducing or eliminating Executor’s fees;
    • Holding Executors personally liable for losses; and/or
    • Removing and replacing the executor.

    Removing Executor’s Fees

    Generally, executor’s fees cannot total more than 5% of an estate’s value.

    In cases of a minor breach, the courts may simply deny the executor from receiving compensation through executor’s fees. For example, if an executor were to act slowly and fail to administer the estate in a reasonable amount of time. The courts could find the executor failed to fulfill their duty by administering the estate in an untimely manner.

    In the case of The Estate of Lilian Lai Lien Lowe (2002), the executor was denied any compensation for her duties. Unfortunately, under the executor’s administration, the estate lost a considerable amount of money which obviously impacted the welfare of the beneficiaries. Further, the executor was looking to charge a fee much greater than the usual 2-3% of the estate’s value. Summing up, the judge stated that the executor “has demonstrably failed to exercise an appropriate level of skill and ability. Because the executor failed to fufill her duty, the fee was distributed to the beneficiaries of the will instead.

    Executors Held Personally Liable for Breaching Trust

    Occasionally, executors find themselves responsible with selling assets or making investments on behalf of the estate. Undoubtedly, all investments carry a risk of loss. However, if the executor makes an investment that a reasonable person wouldn’t have, the executor can be liable for the losses. If the investment was reasonable and simply happened to result in a loss, the executor will not be liable. To put it another way, the executor must act in a demonstrably irrational manner to be held liable for losses to the estate. The courts will typically only order this if the executor has caused the beneficiaries to suffer a significant loss.

    Removing the Executor

    Importantly, in extreme cases where executors are found in breach, the courts can order the removal of an executor. According to the judgement in Nieweler Estate (Re) (2019), there are four categories of conduct that will warrant a removal of an executor:

    1. Endangerment of the trust property (estate);
    2. Dishonesty;
    3. Incapacity to execute the duties; and
    4. Lack of reasonable fidelity (good faith).

    In general, executor removal is a last resort for the courts because it inherently contradicts the final wishes of the testator. An executor will only be removed if the courts see no other option to resolve the estate administration issue at hand. If you’re looking for more information, read our past blog post on executor removal here.

    Ultimately, it’s at the discretion of the courts to determine how to handle an executor who has breached their trust. In some cases, multiple consequences are ordered against the executor of a will. To avoid this, executors must work quick and with the best interests of the beneficiaries in mind – hiring an estate lawyer can help to ensure that all the proper procedures are followed.

    If you’re a beneficiary who has fallen victim to an executor who has breached your trust, contact an experienced estate lawyer today. We can ensure that the proper steps are taken to ensure that you’re compensated for any losses suffered and the estate is administered appropriately.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • An Executor’s Job: What an Executor of a Will Should Expect

    An Executor’s Job: What an Executor of a Will Should Expect

    Before naming someone as executor in a will, the will-writer usually asks the person if they’re comfortable with the responsibility. Often, without fully understanding the legal duties and obligations associated with being an executor, the person accepts. However, executors often make the mistake of accepting executorship just to please the testator. The size and structure of an estate may task executors with a long and complicated estate administration process. Therefore, executors need to understand what they’re agreeing to and ensure they can handle all the expected tasks.

    Duties, Tasks and Responsibilities

    An executor’s duties cover all aspects of estate administration. They are responsible from the testator’s death until the distribution of all assets from the estate to its beneficiaries. Planning the testator’s funeral is often one of the first tasks an executor faces.

    Generally, the executor must have the original copy of the will – there are scenarios which may arise where the original copy is not required and a copy of the original is fine. The executor must present the will to the probate courts for validation and execution. This is only necessary if the will requires probate, which is most often the case.

    Next, the executor can begin to administer the estate, preparing it for distribution to the beneficiaries. The testator must repay any debts owed even after their death. The executor, using the estate’s funds, is responsible for paying these debts, including taxes, on behalf of the estate. Executors are responsible for ensuring that they have not left any of the testator’s debts unpaid. This can even include putting adverts in the newspaper to notify any potential debtors of the testator’s death.

    Passing of Accounts

    It’s crucial that the executor is careful to account for all transactions involved with the estate, tracking anything that goes into and out of the estate. When the estate is ready for distribution to the beneficiaries, the executor must detail all the transactions made on behalf of the estate in an account. The accuracy and detail of these records is crucial in the instance that a beneficiary of the estate raises a claim for passing of accounts. To help make this process easier for executors, it’s recommended to open an estate bank account to keep all the estate’s funds in one place.

    Even if not specified in the will, an executor can receive compensation for their work.

    After all the debts and assets of the estate have been accounted for, the executor can then distribute the estate assets according to the will.

    In most cases, there can be excess assets of minimal value left behind with no one named in the will to receive them. The executor is responsible for disposing of these assets themselves. Once the estate has no remaining assets, the executor has finished their job.

    Remember, this list of executor duties isn’t exhaustive – each estate administration process is unique and requires attention to various debts and assets. This list covers the most common and important duties that an executor will likely be responsible for.

    Risks of Personal Liability

    Anything that the testator did or failed to do while they were alive which resulted in damages will not make executors personally liable. An executor becomes personally liable only if they do something themselves that warrants liability. For example, if the executor fails to give adequate notice of the testator’s death to the debtors of the estate and then distributes the estate, they can become personally liable.

    In this case, the beneficiaries of the estate would not be held responsible for repaying such debts after they’ve received their portion of the estate, as they cannot be held liable for the executor’s negligent administration. The court could order the executor to repay these debts from their own pocket, which is why keeping an accurate and detailed account of the estate’s assets and debts is essential for executors. The executor can also become personally liable if they abuse their power and engage in fraudulent behaviour.

    Is It Worth It?

    Everyone knows that an executor bears numerous responsibilities and must devote a significant amount of time and energy to ensure the proper administration of an estate. Executors can feel pressured by time as they usually have one year from the testator’s death to finish the administration and distribute the assets to the beneficiaries – known as the executor’s year. While there’s no strict deadline, beneficiaries can start urging the executor with court orders to speed up the process if the administration extends beyond the executor’s year and causes undue delay.

    When deciding whether to accept executorship, understand that the law allows executors to receive compensation for their efforts through executor’s fees. The Trustee Act entitles an executor to a maximum of 5 percent of the gross aggregate value of the estate, unless the will specifies otherwise. In most cases, 5 percent is a high figure for the executor’s compensation, and fees are more commonly between 2 percent and 3 percent of the estate’s value.

    Other Details to Consider

    When contemplating accepting executorship, it is also important to consider the proximity with which you live to the location of the estate’s assets. It can be quite difficult to administer an estate when you are living in another province or country. An executor usually cannot complete their tasks during a week-long trip to the location of the assets. They will need to stay in the same city where the majority of the assets are for an extended period.

    Taking on the role of executor for a will can be a significant burden. However, if you do it correctly, you will receive rewards for your efforts. The will always names an executor for the estate. If you decline the position, the courts will assign someone else. However, this could lead to the appointment of an incapable executor, which could cause extensive and potentially expensive delays in the administration process.

    If you are an executor and are unsure how to begin the estate administration process, contact an experienced estate lawyer today. We can help guide you through the tasks of being an executor, and can help ensure that you are not held personally liable for any issues related to the administration of the estate.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Are Executors Entitled to Compensation?

    Are Executors Entitled to Compensation?

    Estate executors may have extensive and time-consuming responsibilities to fulfill, and, in most cases, they receive compensation for their efforts through executor’s fees. Sometimes, the person who writes the will specifies how to compensate the executor, but some wills make no mention of compensation for the executor. Is the executor still entitled to compensation when their estate plan doesn’t mention fees?

    Wills Without Provisions for Executor’s Fees

    When the will specifies the executor’s fees, the courts and beneficiaries cannot convene to modify the fees.

    In short, yes – executors in British Columbia are entitled to compensation even when the will does not make any mention of executor’s fees. In such circumstances, the beneficiaries must unanimously agree upon a reasonable amount to compensate the executor.

    According to the Trustee Act, the executor is entitled to a maximum of 5% of the gross aggregate value of the estate (the combined value of all assets) unless the will specifies otherwise. In most cases, 5% is a high figure for executor’s fees, and it is more common to pay fees worth 2-3% of the estate’s value.

    If the beneficiaries and executor cannot come to an agreement, the Courts determine the fees owed to the executor. Additionally, if any of the beneficiaries are minors or mentally incapable, the Court will determine the fees.

    How the Courts Determine Fair Executor’s Fees

    When determining executor’s fees, the courts will consider the interests of both the executor and the beneficiaries. The case of McColl Estate (Re) (1967) summarized the criteria that British Columbia courts use to make this decision:

    1. The magnitude (value) of the trust;
    2. The care and responsibility involved in administrating the estate;
    3. The time occupied in the administration of the estate;
    4. The skill and ability displayed by the executor; and
    5. The degree of success achieved in the final result of the administration.

    The complexity of the estate plan plays a crucial role when determining executor compensation. For example, if the estate includes multiple small properties around the world, it can be hugely time-consuming and exhausting for the executor to finish the administration. On the other hand, if the estate is primarily cash, it will likely be a reasonably simple task for the executor to administrate the estate.

    British Columbia Caselaw

    The case of Sangha (Re) (2018) raises the question of how large of an executor’s fee is fair in the situation where a will does not specify executor’s fees. Since the will had only one beneficiary, the courts tasked themselves with determining a fair amount to compensate the executor to protect the interests of both parties. The executor was seeking 4% of the estate’s value ($91,644). The judge considered each of the 5 factors mentioned above to determine a reasonable fee. In summary, the judge noted the following:

    1. The estate was not of particular complexity – it primarily consisted of a home in Vancouver, a vehicle, 3 bank accounts and personal various belongings (such as jewelry). These assets required minimal administration by the executor.
    2. The proper care and responsibilities of demanded of executorship were taken. The executor had probate of the will granted, and paid appropriate taxes on behalf of the estate.
    3. The administration process was not particularly time-consuming.
    4. The skill and ability of the executor was deemed to be very low. The executor had terribly mishandled the sale of the testator’s jewelry.
    5. While the executor successfully administered the estate and the vehicle, the liquidation of the jewelry was extremely unsuccessful, and this mishandling impacted the beneficiary financially.

    In the end, the Judge decided that a more reasonable fee for the executor’s service was $35,000.

    If you’re a beneficiary of an estate and believe that an executor is being unreasonably compensated, contact an experienced estate lawyer today. We can help to ensure that the amount payed in executor’s fees is fair to all interested parties.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Cy-près Doctrine: When the Charitable Organization Doesn’t Exist

    Cy-près Doctrine: When the Charitable Organization Doesn’t Exist

    Many people opt to leave a portion of their estate to charities or local projects in their will. Unfortunately, it’s equally common for people to neglect updating their wills to reflect changes in their lives and assets. This can lead to situations where a will donates funds to a charity that no longer exists. Despite this, the intent of the deceased is often clear due to the specific nature of charitable donations. Even if the named organization no longer exists, the intended use for the funds is usually evident. In such instances, the Cy-près Doctrine can be invoked. This allows courts to reinterpret the will, potentially redirecting the funds to a charity that aligns with the original intent.

    Cy-près Doctrine Explained

    When a beneficiary can no longer receive a gift, the gift is said to have lapsed.

    This doctrine allows courts to change a donation in a will to reflect the intentions of the will writer when the original gift is no longer practical. The courts use the Cy-près doctrine to prevent the charitable gift from lapsing (failing) altogether. The Cy-près doctrine can be invoked when the executor starts a petition to be heard before the courts.

    Usually, donations to a charity are made using the residue of an estate after all the beneficiaries have received their gifts. According to the Cy-près Doctrine, if a will provision indicates a charitable intent, the gift will not be considered intestate. Instead, courts identify an alternate organization with a similar purpose to receive the donation. If the charity doesn’t exist in any form, the gift would be distributed according to intestacy laws.

    Charitable Intention

    It can be unclear what “charitable intention” in a will entails. While there’s no specific definition by law, the courts are typically quite lenient with the definition. The courts are encouraging of charitable donations and will do whatever they can to ensure the gift is received. If there is evidence to assume there was charitable intent, the courts will apply the Cy-près doctrine.

    A charitable intention is found if the named charity does not exist, but it’s clear the gift was for the purpose of a specific charity. For example, let’s say a will stated “with the residue of my estate, I will donate to ‘BC’s Charity for Breast Cancer’ to help find a cure for women who suffer from breast cancer.” The executor would find this problematic as there is no charity or organization with the name “BC’s Charity for Breast Cancer.” The courts would be able to use this gift for a different organization with the same purpose because there is a clear charitable intent.

    An Example From Case Law

    In a difficult court case in BC, Bentley v. Anglican Synod of the Diocese of New Westminster (2010), the will writer’s charitable gift to her church’s building fund was unable to be applied. The court found the will writer’s intention was to use the funds for the building needs of the Chinese community. If the funds were put into a trust as described in her will, they would remain stagnant. It was impractical to do this and the judge found it appropriate to enact the Cy-près doctrine.  The judge proposed creating a trust where the funds would be used for the building needs described in the will.

    In any case, the courts strive to interpret wills in the way that the will writer had intended, even if that means modifying the will in some way. The courts are not hesitant to invoke the Cy-près doctrine to ensure that the correct organization is given the donation.

    If you’re an executor who is unsure what to do in the case of a non-existant charity being named in the will, contact an experienced estate lawyer today. We will help you to administer the estate, ensuring the will writer’s final intentions are respected.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Inheritance Scams: Red Flags to Prevent Fraud

    Inheritance Scams: Red Flags to Prevent Fraud

    Inheritance scams commonly involve an individual claiming to be the executor for the estate of a ‘long lost relative’ who the victim hasn’t met. They tell the victim that they are entitled to a large inheritance from the estate. However, in order to receive it, the victim must give personal banking details to arrange the transfer. They commonly request a moderate sum of money in order to facilitate access to the funds from the bank. Sometimes, it’s obvious when someone is a target of a scam. However, many people are vulnerable to online scams and fall victim frequently.

    Receiving an Inheritance in British Columbia

    In British Columbia, a person does not have to pay or give anything to receive an inheritance. An inheritance is a gift, meaning its recipient does not have to pay anything. Further, there are no gift taxes or inheritance taxes in British Columbia. Any taxes owed by the estate will be paid out before beneficiaries can receive their inheritance. If an ‘executor’ is asking beneficiaries for money, it is possible that they are trying to scam a victim. Beneficiaries do not pay any of the estate’s fees or taxes. This is the responsibility of the estate executor, using the estate’s funds. A legitimate executor might need your bank account number to transfer funds into or an address to ship assets to.

    Detecting Inheritance Scams

    While it might sound far-fetched that a distant relative has left someone a large inheritance, it is a possibility. When someone dies intestate (without a valid will) in British Columbia, their assets are distributed according to the intestacy laws. It is possible that a very distant relative is entitled to an estate by the chain of rightful heirs. The courts will track down heirs to give them their inheritance. It might seem unrealistic; however, it could (and does) happen. Because of this, you should not immediately ignore a letter or email indicating that you are a beneficiary of an estate.

    Common Red Flags of Inheritance Scams

    If you’ve received an inheritance scam email/letter, it’s best to simply ignore it and not respond.

    Usually, inheritance scammers are careful to craft their emails or letters to create the illusion that they are coming from credible law firms in your city. If you search for the firm’s name in the fraudulent letter, it will typically be a real place. Further, scammers sometimes have access to some personal information such as your name, address or family member names. This makes it look as if they are a legitimate organization.

    To detect an inheritance scam, the first spot to look is at the sender’s address. If it’s an email, you can check the address to see where the email came from and it will usually not be a standard email address. Most law firms will have a custom mailing address with the name of their firm. For example, our firm uses @leaguelaw.com as the domain name for all staff email addresses. Another indicator of fraud is that there will usually be spelling, grammatical, or even basic English language errors in the letter. In general, law firms are very particular with their language and will not have any of these errors in their writing.

    As provided by the Australian Competition & Consumer Commission’s Scamwatch, an example of a standard inheritance scam letter – see the inheritance scam letter here.

    Fraudulent Wills

    Another type of inheritance scam is carried out using fraudulent documents. With the ability of the Wills, Estates and Succession Act to cure imperfect documents into valid wills, it can be quite difficult to detect these types of scams. Usually, a fraudulent will is handwritten and lacks witness signatures. The difficulty arises because the courts can cure an invalid will that does not meet the usual requirements into a valid will. The only way to know the will is invalid is if a person is certain that the named testator was not the one who wrote the document. It can be difficult and incredibly time-consuming to prove whether or not a document was written by a particular person.

    To prevent being involved in inheritance scams, understand that you will never have to pay out-of-pocket for estate administration or estate inheritances. The estate is responsible for paying any fees or taxes that arise from the estate.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • 6 Tips for Estate Executors for Easy Administration

    6 Tips for Estate Executors for Easy Administration

    The job of an estate executor is not always a simple one and can be extremely strenuous when dealing with complex estates. The executor must ensure the beneficiaries receive the inheritance they’re entitled to. If executors make significant mistakes in administration, they may face personal liability. In this blog post, we hope to give executors some tips to help them avoid unnecessary complications and administer the estate more seamlessly.

    Tip 1: Ask for an Asset List

    If the will-writer is still alive, executors should ask them to prepare an asset list to help with estate administration. Accounting for all of the estate assets is one of the first tasks an executor is responsible to undertake. It’s usually quite obvious to the will-writer what assets they own and where they are, however, may not be obvious to the executor. A detailed list of assets can help ensure that administration of an estate gets off to a good start. By outlining what the assets are, what thee approximate value of those assets are and where they are is very helpful. If the executor lacks this information, they often scramble to account for everything that belongs in the estate of the will-writer.

    Tip 2: Keep Detailed Notes and Accounts

    A big part of the role of an executor is to provide a detailed account of everything that goes into and out of the estate while they are responsible for managing the estate’s assets. It’s best to prepare for this throughout the estate administration process rather than trying to recall all your past transactions at the very end. If any beneficiaries take issue with the detailed account, they can request a passing of accounts, where the executor will have to prove the accounting is legitimate to the courts. Maintaining detailed notes and recordings of all transactions made while acting as the estate administrator is always a best practice. By doing this, the executor can safeguard themselves from personal liability for potential missing estate assets.

    Tip 3: Open an Estate Bank Account

    Executors can open estate bank accounts in BC before the will has been granted probate.

    A temporary bank account for the sole purpose of managing the estate’s assets (an estate bank account) can be a critical tool for executors to keep track of the estate’s assets and to manage them appropriately. Further, an estate bank account keeps all the estate assets in the same place and prevents joint accounts from creating complications in the administration. Having an estate bank account also helps executors to keep organized and differentiate estate assets from personal assets. For more information, read our blog on estate bank accounts.

    Tip 4: Keep the Named Beneficiaries Updated on the Progress of Administration

    An executor is responsible to the beneficiaries of the will, and needs to be working to make sure they receive their inheritance properly and in a timely manner. Sometimes, an inheritance has life changing impacts and it’s not uncommon for beneficiaries to become impatient while awaiting their inheritance. This can be frustrating for executors as the beneficiaries start to hound them for updates and ask them to speed up the process, which is often beyond the control of the executor. In other cases, beneficiaries are skeptical of the executor and believe that they are not is mishandling the estate or failing to accurately account for all assets of the estate.

    To avoid confusion and frustration, it’s best to keep an open line of communication with beneficiaries, keeping them updated on a regular basis with what’s going on in the administration of the estate. When executors fail to communicate with beneficiaries, often find that beneficiaries become impatient and skeptical of the executor’s ability to administer the estate appropriately.

    Tip 5: Be Reasonable and Manage Time Responsibly

    Estate administration is by no means a race, and executors should take all the time they need to finish the job properly. However, executors should be mindful that they can’t unduly delay the process for legally invalid reasons. Beneficiaries are entitled to receive their inheritance in a reasonable amount of time and can force executors to take action when they fall victim to the lazy estate (a slow executor). Executors shouldn’t rush because no one will punish them for reasonable delays. Further, the executor’s year protects executors – they have a year to finish administering the estate before beneficiaries can start actions of the complain.

    Tip 6: Don’t Be Afraid to Ask For Help in Administration

    Just because a will names someone as the sole executor, it doesn’t mean that the executor has to handle everything alone. It’s not uncommon for beneficiaries and family members to lend a helping hand, so don’t be afraid to ask for help. Further, if you need professional assistance, estate lawyers and accountants can provide help with any complex issues that may arise, ensuring appropriate resolution. If you’re an estate executor and need help, contact an experienced estate lawyer today. We can help to ensure that the estate is administered properly and in a timely manner.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • When are Beneficiaries Entitled to Receive Interest? The Rule of Convenience

    When are Beneficiaries Entitled to Receive Interest? The Rule of Convenience

    Executors and beneficiaries are often aware of the executor’s year – a common law principle stating that an executor has a year from the testator’s death to finish administering the estate and distribute its assets. During the executor’s year, beneficiaries are usually not able to raise motions to speed up the process. In some cases, the estate administration takes longer than expected and beneficiaries inherit their share of the estate years after the testator’s death. Beneficiaries can sometimes use the Rule of Convenience to collect interest on their inheritance when delays occur.

    The Rule of Convenience

    The rule of convenience states that an inheritance which takes longer than the executor’s year to distribute could be subject to simple interest of 5% per year. However, if the will-writer acknowledges that their estate administration will likely take an extended period of time, they could include a provision stating that inheritances are not to be subject to interest if administration extends beyond the executor’s year. On the contrary, will-writers can specify that they wish to give interest to beneficiaries of their will in the event that the administration is lengthy.

    Interest Payments Because of a Will Challenge

    The executor’s year is not a legally binding principle and courts can allow motions to speed up the administration during the executor’s year when necessary.

    In the case of Rivard v. Morris (2018), the courts confirmed the use of the rule. A father left his two daughters with $530,000 each and the residue of the estate to his son (which was significantly larger than the $530,000). The daughters challenged the will, claiming that the son had unduly influenced the father during the will-writing process.

    After a lengthy dispute that lasted multiple years and ultimately failed, the daughters filed a claim for interest under the rule of convenience.  They wanted interest to be paid from the residue of the estate (the son’s share). The Court of Appeal allowed the daughters’ hearing and found them entitled to interest on their inheritance, even though the daughters’ claim caused the will challenge and related delays. The reasoning was that the challenge was non-frivolous and it would be unfair to not grant the interest payments. The judge emphasized the importance of certainty and predictability in the decision.

    What This Means for Executors

    For executors of wills, it’s important to be aware of the rule of convenience as it could have a financial impact on the estate. We encourage all executors to be proactive in their estate administration. In the majority of cases, it will not be difficult to finish the estate administration within the executor’s year. In some cases, like the one above, the executor is not at fault for the delay, but the rule of convenience still requires them to pay interest from the estate. If you’re an executor expecting an estate dispute, you should anticipate potential interest payments and plan accordingly.

    What This Means for Beneficiaries

    For beneficiaries of an estate that is taking longer than the executor’s year to administer, you should understand your rights as a beneficiary. If the executor’s year has passed, you could be eligible to start a claim citing the rule of convenience. Beneficiaries can initiate motions to expedite the estate administration process if there are undue delays. If executors prove to be incompetent and unable to administer the estate, the Courts can remove them. Just because you’re a beneficiary with minimal authority in the estate administration doesn’t mean you don’t have legal remedies available if you’ve been wronged. For more on this, read our article on forcing an executor to act.

    If you’re a beneficiary of a will that has been in the administration process beyond the executor’s year, contact an experienced estate lawyer today. We can help you to speed up the administration process and have you receive inheritance interests when necessary.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Choosing an Executor: Should You Appoint a Professional?

    Choosing an Executor: Should You Appoint a Professional?

    An important part of the will-writing process is choosing someone to be the executor– the person who is responsible for administering the estate and distributing the estate’s assets. There can be a number of different factors that go into the process of choosing an executor. The job of an executor is typically not a simple one – it can involve a handful of different tasks as they prepare the estate for distribution to the beneficiaries named in the will. In some cases, it’s in the best interests of the will-writer and their family to appoint a professional to be the estate executor.

    Will-writers who want a truly neutral party to act as their executor can appoint a lawyer, accountant, or corporate trustee. While this will cost more than naming a close friend or family member, it ensures professional administration of the estate. There can be many different reasons why will-writers think it is necessary to appoint a professional estate executor.

    Complex Estate

    Executors are ultimately responsible with managing all aspects of the estate administration. Executors are responsible for accounting for all of the estate assets, paying any unpaid debts the testator owes, managing estate assets for distribution, and locating all the beneficiaries of the will. The executor’s job can become very complicated if the estate has assets scattered around the world, beneficiaries living in other jurisdictions, or a number of debts to pay. The pressure can also become overwhelming, as executors can face personal liability for mistakes that harm beneficiaries.

    If at all, many people only serve as an estate executor once or twice in their life, which means they have minimal experience. By hiring a professional, you can be certain they know exactly what they’re doing. As the will-writer, you can be assured that the administration will go smoothly and none of your loved ones will be burdened by this duty. Further, a professional executor can help to defuse family conflicts that might arise as a result of the administration.

    Family Politics

    Estate executors can decline taking on the role before they begin estate administration.

    Often when family estate disputes happen it is due to the actions of the executor or the will-writer. As a will-writer, you can foresee and mitigate family conflict with proper estate planning. If a third-party professional administers your estate, you can mitigate family issues that arise from the estate. You can presume that the professional will act objectively, doing what is right for the beneficiaries and the estate. The professional will have nothing to gain by acting in the favour of certain family members.

    Nobody Suitable

    Often, people appoint a professional executor simply because they do not have any other suitable person to appoint. While people typically choose close family to be their executor, sometimes this isn’t an option. Maybe there is no one who you can trust to act objectively, there is no one physically or mentally able to handle the role, or you’re simply afraid nobody will carry out the terms of your estate exactly as you wish. Generally speaking, you will never want to appoint an executor who lives in a different country from where the majority of your estate assets are. The executor will need to be physically present for many of the executor’s duties.

    Can’t Decide? Name Multiple Executors

    Often, will-writers wish for their executors to have the objectivity and experience of a professional, but also personal knowledge and relationships of their family. Even though there isn’t usually one person who exhibits all of these traits, will-writers are able to name multiple executors in their will (co-executors). This can be a good idea in some cases as it eases the workload of the executor, however, co-executors must agree to all decisions made on behalf of the estate. It is common for parents to name all of their children as co-executors for their estate in the interest of fairness. In naming a professional and a family member as co-executors, the family member can handle most of the estate affairs with the professional assisting when needed and ensuring that the estate administration is done properly and efficiently.

    If you think that a professional executor is unnecessary in your scenario, it’s still important to appoint the right person to be your executor. Different family members might be better suited for the job based on their physical location, personality and/or willingness to do the job. For more information, read our blog on choosing the right executor for your estate administration.

    Ultimately, it’s up to the will-writer to choose who their executor should be. If you’re unsure if you should appoint a professional to be your executor, contact an experienced estate lawyer today. We can help you to pick someone who will properly administer your estate.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

  • Administration Bonds: Security for Inheritance

    Administration Bonds: Security for Inheritance

    An estate executor must act in the best interests of the beneficiaries as part of their responsibilities. Executors have a fiduciary duty to act in the best interest of beneficiaries, regardless of their personal relationship. Sometimes, the executor and beneficiaries don’t have a good relationship. This situation leaves beneficiaries worried about the executor’s handling of the estate. This can be more stressful if the executor takes minimal care in the work because it doesn’t impact them. In situations like this, a beneficiary might consider applying for an administration bond.

    If the administration is in BC, any interested person can apply for an administration bond, providing security for the process. With an administration bond, the executor must deposit money with the Courts to ensure they fulfil their fiduciary responsibility as executor. This is similar to making a safety deposit when renting an apartment, as it’s meant to ensure you handle others’ property carefully. If the executor doesn’t act appropriately, they risk losing the administration bond. In the case of an easy administration with no concerns, the executor receives their deposit back quickly.

    When Administration Bonds Can Be Issued

    Any interested party can apply for an administration bond, but the courts decide whether to allow it or not. In some cases, the will writer includes a provision in the will outlining whether an administration bond is mandatory. If the will requests the creation of an administration bond, the applicant typically finds it easy to succeed with their claim. When the will is silent on the matter, it can become much more complex. It’s when the will is silent on that matter that it can be more complex.

    There is no set value that the administration bond must be. It can vary depending on the case and the size of the estate.

    When there is no clause relating to an administration bond in the will, the applicant must have evidence suggesting that the executor is not going to act reasonably. The Courts don’t normally issue administration bonds in BC when the will doesn’t include a clause requesting one. An interested party should have strong evidence that shows the executor is likely going to act against their fiduciary duty. For example, evidence of the executor having a history of poor estate administration. When there isn’t a strong case to impose an administration bond, there are alternative measures that interested parties can take.

    Alternative Options to the Administration Bond

    Sometimes, an administration bond is not the most viable option in your circumstances, however, you still feel concerned about the named executor handling the estate. There are other measures you can take to ensure that the estate is administered correctly. Before any beneficiary receives their inheritance, the executor must provide a detailed account of all of the estate assets. If you believe an asset has gone missing or is smaller than it should be, you can issue a request for a passing of accounts. This is a court hearing where the executor must prove the validity of the estate accounts. For more information, read our blog on passing of accounts.

    As a last resort effort, interested parties are able to apply to have an executor completely removed from their duties. The courts will only allow this when they cannot see any other alternatives to fix the issue. Typically, this will only be allowed after the executor has made a significant mistake in the estate administration. Unlike an administration bond, executor removal is not a precautionary measure. For more information, read our blog on removing an executor and the legal grounds for doing so. In some less extreme scenarios, a co-executor can be appointed to help with the administration.

    If you’re a beneficiary who feels uneasy about the executor of a loved one’s estate, contact an experienced estate lawyer today. We can ensure that the estate is handled appropriately whether that means applying for an administration bond, a passing of account or the executor being removed.

    Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.