If you have been appointed as an executor under a deceased’s Last Will and Testament, there are several things to keep in mind. The most important thing to remember, however, is that an executor acts as a “trustee” of the property in the estate and is therefore subject to the highest standard the law can impose: the fiduciary duty.
A fiduciary is defined as a person who has discretionary and unilateral power to affect a beneficiary’s interests, and the beneficiary is vulnerable or at the mercy of the fiduciary. In more simple terms, the duty means that a fiduciary must always act in the best interest of the estate itself. Meeting this duty for executors generally entails dealing with a deceased’s persons assets and debts in a reasonable and honest manner. It includes applying for probate when necessary, paying the debts of the estate, and completing the necessary tax filings. The executor must also provide an accounting of the estate to the beneficiaries, follow the instructions in the Will, and ensure that the beneficiaries receive their inheritance in a timely manner.
In many cases, estate administration moves along without any significant hitches. However, acting as an executor might include more complex tasks. For example, there may be a problem with the validity of or the meaning of the Will, and often this means that a court application for direction and/or interpretation will need to be submitted. Sometimes the original Will is lost and a copy of the Will needs to be proven as valid before probate can be achieved. Immovable property (e.g. land) of the deceased may be located in other jurisdictions, in which case Letters Probate will need to be resealed in that jurisdiction before those assets can be administered. The estate may have an outstanding claim for damages against another party or a claim may be made against the estate for something the deceased did before they died, and the executor will need to represent the estate in a court action or settle the dispute on behalf of the estate. There may be minors or other dependants who might have an entitlement to a portion of the estate. Communication with the Public Guardian and Trustee might be required when the interests of a minor or disabled person are being affected by decisions made by an executor during the course of the administration. A beneficiary might be impossible to locate or deceased themselves, and their share will need to be assessed for alternate distribution. Suspicious circumstances might require an executor to look into what occurred before the person died. For example, there may have been a person managing the deceased’s financial affairs pursuant to a Power of Attorney document and the executor notices that assets were depleted, mismanaged, wrongfully distributed, or otherwise misappropriated during that time period, which would likely lead to pursuing recovery from the person appointed as attorney. Sometimes there is evidence to suggest that the deceased did not have capacity to make a Will at all or was influenced to change their estate plan before they died, such that the Will or other transaction needs to be set aside.
These circumstances do not always lead to court actions. A settlement where all beneficiaries of the estate agree upon an acceptable resolution can be an efficient way to resolve many disputes. However, regardless of what the problem is, an executor is always bound to act in the best interest of the estate and determining how to proceed can be a complex question.
In addition to the above-described complexities, executors sometimes face accusations that they have breached their fiduciary duties. Failing to report assets, undervaluing assets, failing to pay debts or other liabilities, failing to keep accurate records, mishandling estate funds, treating beneficiaries unequally, failing to follow the instructions under the Will, taking personal advantage from the estate, or acting in a position of conflict of interest are examples. In these scenarios, an executor might face removal by the Court. Litigation might also be commenced against the executor personally for recovery of property and other losses incurred by the estate. Ultimately, it is the beneficiaries who incur the loss and there are remedies available to such individuals. If you are acting as an executor or you are a beneficiary of an estate, obtaining legal advice and services can provide helpful information and guidance. A lawyer who has experience in estate planning, administration, and litigation can be a resourceful advocate when facing any of the above-described scenarios.
STEVENSON HOOD THORNTON BEAUBIER LLP
500-123 2nd Avenue S, Saskatoon, SK S7K 7E6
The information in this article is not legal advice. We encourage you to consult with your legal advisor for advice specific to you.
This article was originally published in The Western Producer on April 22, 2021.