What are the rights and responsibilities of executors?
“My cousin wants a car from the estate of our recently-deceased, not-wealthy uncle. One of the executors of our uncle’s will is willing to give him a pretty good price for the car, just to get rid of it, but the other executor says they should sell it on Craigslist where they’ll get more money for it. Meanwhile, my cousin’s mother says he should get it for free, since ‘it’s family’.
Who’s right? How should this sort of thing be resolved?”
The first thing to remember is that executors have a duty to all the beneficiaries of a will until all the beneficiaries affected by that will agree otherwise. In other words, an executor’s responsibility is to make decisions that will best benefit all beneficiaries of an estate.
In the case of a car to be disposed of by the estate, the terms of the will should dictate what happens: Sometimes a will specifies to whom the car is to be left; sometimes a will specifies that a beneficiary should be given preferential treatment regarding the purchase of the car from the estate. In the absence of such direction, it’s up to the executors to sell the car in a way that best benefits all beneficiaries – so Cousin Bob shouldn’t be allowed to purchase the car for $500 if the car could obtain $10,000 on the open market, unless all beneficiaries agree that this is acceptable.
However, the responsibility to obtain a beneficial value should not be excessive and co-trustees shouldn’t let a personal dispute get in the way. If Cousin Bob is prepared to pay a reasonable sum for the car – such as $9000 – then the beneficiaries may be consulted, and consideration may be given to the fact that holding out for a higher sum on Craigslist may mean increased storage, maintenance or financing costs. A relatively easy, early disposition of an asset may put money in the hands of the estate to earn interest or reduce borrowing charges.
There isn’t always a clear-cut answer to questions like this. Trustees have an obligation to respect the intentions of the testator and to act in a way that best benefits the heirs.
Questions? Don’t hesitate to get in touch.
This blog is provided for educational purposes only and should not be construed as specific legal advice. This blog should not be used as a substitute for competent legal advice from a licensed professional lawyer in your province.