So you've been named as an Executor. It's an honor, but it's also a job. I came across this very interesting blog that lays out the duties and responsibilities that await an Executor and the many pitfalls that need to be avoided.
Do You Really Want to be an Executor?
By Charles Wagner and Rachael Kwan | Blogs, Estate Law, Executors / Trustees | 0 comment | 1 December, 2015
When reading the case of Dueck v. Chaplin (“Dueck),”1 I am reminded of an article by Noreen Rasbach of the Globe and Mail entitled “Executors beware2 – it’s not an easy job.” In the article, Ms. Rasbach notes,
“You can’t help but feel honoured when you’re named an executor of the estate of a family member or friend. It’s a sign that you’re trusted and respected.
When the time comes, however, experts say that sentiment will be tempered by the task at hand – a pile of work.
Not only will administering the estate take at least a year – more likely 18 to 24 months or longer if the estate is particularly complex – but the work will be done during a period of emotional turmoil – both in grieving for the deceased and in navigating family tensions over how the estate is divided.
On top of that, experts say, executors are financially liable for their mistakes and are increasingly being held to account both by beneficiaries and by the courts.”
As the person managing the administration of the estate, executors are often the most readily available target for disgruntled or disinherited beneficiaries. If the risk is not effectively managed, serving as an executor can entangle you in costly litigation.
If you are named as an executor in a will, it is important to consider the implications of acting as an executorbefore you take any steps to administer an estate. Also, keep in mind that the role of executor becomes complicated when parties dispute which is the valid last will and testament. Such was the case in Dueck.
This case involves a separated couple. Jan, the wife, challenged the validity of the last will and testament. In 2001, Mark wrote a will leaving the residue of his estate to his wife, Jan. In 2007, Jan and Mark separated and the breakdown of their marriage triggered contentious litigation over the division of assets, child and spousal support and access to the couple’s children. The couple remained locked in bitter proceedings until Mark’s death from complications of a cancerous brain tumour in 2013. Mark signed a new will that divided the residue of his estate between his children and nephews and nieces (who were all minors at the time of his death) (the “2013 Will”).
In the 2013 Will, Mark appointed his sister, Erin, and his family lawyer, Ted, as the executors of his new will. After Mark’s death, Erin and Ted applied for a Certificate of Appointment of Estate Trustee with a Will. They also started to administer Mark’s estate by paying a few outstanding debts, consolidating the estate’s assets in a trust account and paying a portion of Mark’s funeral expenses.
When Erin and Ted made their application for a Certificate of Appointment of Estate Trustee their application was held in abeyance because Jan filed a Notice of Objection. This is a one page document under which Jan gave notice of her objection to the issuance of the certificate of appointment for the last will and testament. Jan alleged that the 2013 Will was invalid on two counts. First, Jan said that Mark lacked testamentary capacity. Second, even if he had capacity Jan alleged that Mark was unduly influenced by Erin. Apart from the will challenge, Jan was also suing Ted for negligence. She alleged that Ted knew or ought to have known that Erin was unduly influencing her brother and that he should liable in negligence.
In the ordinary course, in the context of a will challenge, the person named as an executor has to advocate that the will in question is valid. That’s what it means to say that the executor is propounding the will. When it was clear to Ted and Erin that they were being sued personally, they no longer wanted to act as executors. The problem was that no one else wanted to be an executor or propound the 2013 Will. The nature of Jan’s claims meant that Erin and Ted were going to be witnesses in the litigation. With legal fees on both sides mounting, Jan sought an order requiring Erin and Ted to propound the 2013 Will. The order also requested directions on other aspects of the estate litigation. The question before the court was whether the judge would allow Ted and Erin to stop being executors and relieve them of their responsibility to propound the 2013 Will.
Just because a person is named as an executor in a will does not mean that they have to accept the appointment. If the named executor does not want to accept the appointment he/she may fill out a form called a “Renunciation” and file same with the court.3 In order for the named executor to renunciate the court must be satisfied that the person took no steps to as an executor. So the first thing that Erin and Ted sought from the court was a confirmation that they could renounce their position as executors. The court did not agree.
Erin and Ted had already started to administer the estate and so were deemed to have “intermeddled.” FollowingChambers v. Chambers, executors who have started to administer an estate are deemed to have intermeddled and are generally not allowed to renounce their position.4
As an alternative argument, Erin and Ted asked the court to remove them as executors.5 They argued that the Office of the Children’s Lawyer (“OCL”) and the Public Guardian and Trustee (“PGT”) had a duty to propound the will on behalf of the underage beneficiaries of the 2013 Will. In support of their own removal, Erin and Ted submitted that given that they were being sued personally and would have to be witnesses there was a conflict of interest. How could they on one hand be expected to give impartial honest testimony and at the same time advocate for the validity of the Will?
The Court declined to exercise its discretion to remove Erin and Ted for a number of reasons. In part, the Court refused because there is no obligation in the Rules of Civil Procedure or under the mandate of either the OCL or PGT to actively propound a will. The Court was also persuaded to require Erin and Ted to propound the 2013 Will on the basis of their personal involvement in drafting and executing the 2013 Will. This was supported by the following facts: Ted and Erin assisted in the preparation of the 2013 Will, arranged for Mark to attend Ted’s office to sign the 2013 Will and were witnesses to the events of January 17, 2013 when the 2013 Will was executed.
What lessons should a potential executor learn from this case? Before you act to administer an estate, consider the likelihood of litigation and whether you are committed to seeing the process through. Renouncing before you administer an estate is a matter of filing a form with the court. This is a much easier and less expensive than persuading a judge that you didn’t intermeddle in an estate. Where there is any doubt, sound legal advice can be the difference between filling out paperwork and ongoing litigation.