All About Estates

So, you want to be an Executor – Take Heed!

Today’s blog was written by guest blogger Wendy Templeton. Wendy Templeton practices in the area of Wills, trusts, tax and estates at LLF Lawyers LLP in Peterborough. She is a well-known author and lecturer and currently contributes to the Diploma Program of the Society of Trust and Estate Practitioners of Canada (STEP), and Co-Chairs the five day intensive Will, Estate and Trust Fundamentals course sponsored by the Canadian Bar Association.

It is said that “no good deed goes unpunished.” First attributed to many, including Oscar Wilde and the American financier John Grier, the wisdom rings true. It is a bitter pill that many a beleaguered executor ends up swallowing. Acting as an executor can be a thankless task, and many do not consider at the outset, whether it is one they should take on.

Beneficiaries want to know two things, and they want to know them right away. First, “how much do I get,” and second, “when do I pick up the cheque?” As the administration of an estate proceeds in the normal course, beneficiaries see the process as dragging on needlessly and blame the executor for every fault, real or imagined. Add to impatient beneficiaries many other unpleasantries an executor may have to face:

  1. Warring family members. At a seminar I gave on wills and estates, a couple complained that they agreed to be executors for their neighbours as a favour to them, and then found out, too late, that the children could not agree on “the price of a pencil.” The estate got delayed endlessly while one conflict after another got sorted out.
  2. One judge famously remarked at the outset of an estate trial, “Why waste the value of the estate on the beneficiaries when it can go to all the lawyers?”
  3. The estate may be bankrupt, and the executor might better have renounced and let a trustee in bankruptcy administer the estate.
  4. Loss of the “Moral Authority.” When both parents die, there is no longer any reason for the children to co-operate, and long held resentments from childhood, buried to please mom and dad, come out in full, spurred on by the strong emotions grief evokes. This phenomenon is even more prevalent in the second marriage situation between the surviving spouse and children of a prior relationship.
  5. Personal liability. Executors are required to act prudently, diligently, and in good faith. The courts will hold their conduct to the highest standard. Fail to get the tax planning, right? Sell the assets too quickly when prices go up? Hold on to assets too long when prices go down? Fail to be conservative enough in your investing? Any of these could mean potential liability. And distribution of property without the proper tax clearances will make an executor personally liable to Canada Revenue Agency for taxes of the estate from their own resources.

The person named as executor is not a conscript. One can always refuse to act by filing a notice to renounce. It is best to take a long hard look at the situation once the Will maker has died and make a conscious decision to accept or renounce. The exercise should include an assessment of the nature of the assets, the liabilities, the family dynamics and the Will itself. Once the executor has taken even preliminary steps in administration of the estate, it may be too late to renounce as of right (i.e. without court approval and passing accounts), so it is important to get advice early.

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