ASK A LAWYER: What happens when 2 executors can’t agree?

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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.  

 

3 Options for preparing your will

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SullivanLaw Wills and Estates

Hardly anyone enjoys the prospect of preparing a will. But without one, you not only run the risk of having your estate distributed contrary to your wishes – you may be leaving your family and friends with a legal mess to clean up after you’re gone. Don’t think of a will as something ‘morbid’; think of it as an administrative favour you can do for the people you care about most.

When it comes to wills, you have 3 choices: A holographic will, a do-it-yourself will kit, or a professionally drafted will. All three, properly executed, are legal, but it’s important to understand the advantages (and disadvantages) of each option.

HOLOGRAPHIC WILLS

A Holographic Will is a will which is written entirely in your own hand. It’s inexpensive (all you need is a piece of paper, a pen, and legible handwriting), and doesn’t require witnesses or a notary public in order to be valid. However, it does have a number of potential disadvantages: Your intentions may not be expressed as clearly to others; the organization of the will may dispose of all your property in one fell swoop and leave nothing to others as you had intended; if your will is stored at the bottom of a desk drawer, it may be difficult to locate or probate; and without witnesses, your capacity to make a will may be challenged.

DIY WILL KITS

Will kits, sold online (or in stationery stores) can be an attractive, low-cost solution. Most provide an assortment pre-written words/clauses, and all you have to do is fill in the blanks to itemize property, heirs, etc. This can be a good option for uncomplicated estates, but will kits have some caveats: It’s up to you to ensure that the will has been properly executed and appropriately witnessed; that you have included the necessary details; and that it’s stored in a place where it will be easily found when needed.It may be difficult to find the witnesses to guarantee their signatures for probate.

PROFESSIONALLY-DRAFTED WILLS

A professionally-prepared will – one drafted and executed by a lawyer – is the most expensive of the three options.  However, you may find that the cost is less than you think (many lawyers prepare wills for a set small fee rather than a large hourly retainer), while the advantages are significant.  Having a lawyer prepare your will means you’ll get legal counsel, tax assistance, and probate fee-reducing advice; your will is stored at the lawyer’s office in a fire-proof safe; and lawyers are backed by errors and omissions insurance.  This protection is particularly valuable for people whose property includes real estate (such as the family home), investments/RRSPs,  and spouses and children or grandchildren as heirs.

 

This is not intended as legal advice. Please consult a professional licensed in Ontario to provide legal advice as specific facts may affect your particular circumstances.

WILLS & ESTATES: Tips for disbursing household possessions

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Wills and estates household possessions

 

How to make it easier to organize and allocate household ‘stuff’ when a parent has died

When people think about being an executor of a will, they often focus on the administrative part: Making sure they know where the will is, meeting with the lawyer, contacting beneficiaries, ensuring the paperwork is completed and filed properly, etc.

But in fact for many people, the more time-consuming – and sometimes headache-inducing – part of the process is going through the family home and determining what should be done with all the stuff that a person accumulates in 75 or 80 years of life.

Even if your parents (because it’s usually the adult children of the deceased who are tasked with this) had recently downsized and don’t have a huge basement of childhood gear to wade through, chances are they’ve got several rooms’ worth of furniture, several cupboards’ worth of china and kitchen tools, and several boxes worth of artwork and knickknacks. Some of it is nice, some of it is serviceable, and some of it should go directly to Goodwill.

But how do you manage it so that (a) everyone who wants one can receive some kind of memento; (b) the estate is compensated fairly for any items of high value; and (c) the process doesn’t start some kind of family feud because Aunt Mabel didn’t get that vase she’s always said she wanted?

Here are some tips:

Communicate with beneficiaries promptly and clearly. While executors are supposed to give notice to beneficiaries in certain ways and at certain times, the reality is that additional phone calls or emails to beneficiaries, keeping them up to date on the progress of probate or disbursements or tracking down a long-lost beneficiary can prevent family resentment later.

Get an independent appraisal. Pay a local antique dealer (typically $500-$1000, depending on the amount of stuff) to give you high-level values for everything in the house, from that supposedly-fantastic artwork in the living room to the set of pots under the sink. Make it clear that the appraisal will not lead to the dealer actually handling any sales, which will help ensure the values are realistic.

Make the appraisal list available to beneficiaries or people like Aunt Mabel. If that vase was appraised at $1200, it may be more than a memento – it may be an asset, and therefore not something you can just let her have when she stops by to help you clean out the house. Showing her some paperwork from an expert helps ensure no one (including Aunt Mabel) takes it personally when you’re firm about not letting people casually remove things from the home.

Invite children, grandchildren and other relatives to choose one item first. One of my clients invited all the kids and close relatives to their deceased parents’ home a couple of weeks after the funeral, and asked each of them to write down the one item they wanted, and one alternate. (All items had been assigned a value by a local auction dealer.)

The amazing result was that everyone got the item they wanted, and no one went away upset. Everyone felt like they’d gotten the one ‘special item’ they wanted, and the rest of the items were distributed without sowing the seeds of a long-term family dispute.

Insist that higher-end items are purchased from the estate – not given away unilaterally. When Grandma or Grandpa dies, there’s often a late-model car automobile left in the garage, and a grandchild or two who could use a vehicle to get to school or work.  Unless there is specific direction in the will, assets like this should be sold by the estate and the proceeds shared among the beneficiaries as outlined in the will. Sure, the grandchild hoping for a free car might be a little disgruntled now, but that’s better than all the beneficiaries feeling ‘cheated’ later on.

Try to remember that it’s just ‘stuff’. Losing a close friend or family member sometimes makes everything seem like a much bigger deal than it really is, or than it would be if you weren’t in the middle of the grieving process. Whether or not you get your mother’s lamp or your father’s old fishing rod is less important than ensuring you and your family have the time and space to grieve without additional stress.

FROM ADVOCATE DAILY: Wills can reduce conflicts and taxes

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With an inheritance boom on the horizon, it’s important to be prepared

From this week’s AdvocateDaily, by our own Timothy Sullivan:

With wealth transfers expected to boom over the next decade, now is the time to set up a will and discuss it with your loved ones, says Ottawa family and estates lawyer Timothy N. Sullivan.

“People with something to give somebody should have a will and a plan to discuss what the heirs might expect, to reduce conflict and potential litigation,” says Sullivan, principal of SullivanLaw.

The Canadian Imperial Bank of Commerce recently released a study suggesting Canadians can expect $750-million in inheritances over the coming decade — an increase of 50 per cent over the previous decade, the Financial Post reports.

Sullivan says wills should be reviewed on an ongoing basis, as new obligations arise or intentions change.

“When your relationships change, these testamentary documents should be reviewed,” Sullivan tells AdvocateDaily.com.

To read more, check out the whole article on AdvocateDaily.