“The role of an estate trustee can really be a thankless task”. So ended yesterday’s blog by Justin de Vries. The fact there is now an insurance product available to protect estate trustees in the event they are successfully sued by a disgruntled beneficiary only underscores this truism.
An article in yesterday’s Toronto Star’s “moneyville” discusses the new ERAssure policies. The policies are available for estates up to $5 million and may be purchased for a three-year term within 60 days of testator’s death.
The product is designed for lay or, as they are referred to in the article, “amateur” executors. The developers – Scot Dalton nd Myron Neufeld of Estate Risk Protection Plan Inc. – believe demand for their product will be driven by a few factors, including:
- “less tolerant” blended families
- a more litigious population
- rising estate values
Based on my experience, lay executors are often apprehensive about assuming the role and their concerns generally fall under one or more of the following headings:
- time or geographical constrainsts
- lack of expertise
- potential for family/beneficiary conflict
- possiblity of personal liability
A product that can help with three of the four may indeed prove welcome.
Professional executors – lawyers, accountants, trust companies – have their own “protection”. This may include E & O insurance, but the pros also rely heavily on stringent policies and procedures, ongoing training, experience and, most importantly, expertise.
The mere fact that the role of executor warrants specialized insurance coverage should give pause to both potential executors and the testators who appoint them.
Thanks for reading.