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.  

 

It’s Monday morning. Do you know where your will is?

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Preparing estate documents is one thing. Accessing them is another.

Last Monday morning I got a call from an old friend in Vancouver. “My mother is in the hospital and they don’t expect her to regain consciousness,” he said. “I need to find her will and the Power of Attorney paperwork I did with her lawyer out here last year, but the lawyer says he doesn’t have it. What should I do?”

The short answer is: You and your siblings are going to have to do a thorough search of your mother’s home in between visits to the hospital because you’re going to need the originals of those documents sooner rather than later.  The hospital may let you make decisions for your mother as next-of-kin because before she became incapacitated she was able to provide direction. If there are disputes, or if your mother dies, you are going to need the originals of the Estate documents in order to probate the will.

Where the heck are the originals?

Unfortunately, my friend’s problem isn’t unusual: Many people think they’ve done the responsible thing by having a lawyer properly prepare Power of Attorney and Estate documents (and I hope you have, too http://sullivanlaw.ca/november-is-make-a-will-month/). And they have. It’s just incomplete. If they leave the lawyer’s office with one or two originals of the will and power of attorney documents, they’re setting themselves up for trouble later.

If you’re over 40 and your parents are still alive, ask yourself this question: If my parents died right now, would I know where to find their wills? If they had an accident and I suddenly had to take over their finances, would I know where to find the Power of Attorney documents that would allow me to do that?

Wills and estates are really a three-step process

A good estate lawyer’s role doesn’t end when you sign the paperwork. Our office has a three-step process:

STEP 1: Clients meet with me so I can explain what they need to know in order for me to receive proper instructions. We can discuss estate distribution, powers of attorney, determine whether financial arrangements such as trusts need to be established, etc. I receive instructions to prepare their wills and powers of attorney.

STEP 2: Having had sufficient time to review their instructions and draft the documents, clients return and we review and sign their estate documents: The will, the POA for personal care and the POA for property. The originals of these documents (several originals of the POAs, in most cases) are stored safely with SullivanLaw, while clients leave with copies.

STEP 3: To obtain or access the originals, the client or representative (in case of a death, the executor, and the case of a power of attorney, the attorney) contacts me. I have quick access to the original documents and sufficient authority to get them into the proper hands. In most cases this is simply part of the process and doesn’t cost the client or the estate anything additional.

 “But I thought lawyers always had originals.”

Many lawyers think of estate documents as transactional: The lawyer prepares the documents, the client pays the bill, and that’s that.  The truth is that lawyers don’t make a lot of money preparing wills, so it’s not a big priority for them – some don’t store originals and they don’t expect to hear from family members when a client dies or becomes incapacitated.

We think life’s a lot easier when you can think of your lawyer as a sort of trusted advisor or resource who you can call when things get tough. Storing those important documents is a service we offer.

Would your family know where to find your original will if something should happen to you?

FROM ADVOCATE DAILY: Disinheritance

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Avoid conflict over disinheritance by being upfront

From this week’s article on Advocate Daily, by our own Timothy Sullivan:

The decision to disinherit a child may be reasonable depending on the circumstances, but it will likely lead to hurt relationships and confusion if an upfront conversation with family members doesn’t take place first, says Ottawa wills and estates lawyer Timothy N. Sullivan.

A recent Globe and Mail article says when it comes to disinheriting a child, there are no blanket rules that apply. Courts will consider the facts of a specific case before deciding whether to side with the child or the estate, says the report.

But in almost all cases, says the Globe, fighting to change a deceased person’s estate plan is complicated, expensive and stressful.

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

November is “Make-a-Will Month”.

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How may we help you?

Don’t let your will get this out of date

A surprising number of people do not have Wills.  A recent study revealed that over half of Canadians haven’t gotten around to preparing their last Will and Testament, as it once was affectionately known. More surprisingly, even a number of lawyers don’t seem to have received or acted upon the information that a Will is important to have in place to address one’s affairs while one still can.

Think about it: The very last thing someone needs to do is execute a properly-drafted Will. However, there will come a time when this is too late.

“I don’t really own much. Why should I have a Will?”

I hear this sometimes but to be honest, I tend to consider it a humblebrag. Most people have something of value to distribute when this mortal coil is shed. The question is not what you have or what’s it worth. The question is “who gets it when you’re gone?”

People who have businesses, significant others (especially if not married but in a committed relationship), real property or children should seriously consider having a Will prepared. Without a Will, property will be distributed according a statutory distribution regime – to your married spouse, your children, parents, siblings, and outwardly from there according to the family relationship. You have no control over who your family members are; at least with a Will you can control which family members – if any – receive the Estate bounty when you’re gone.

A Will names the people who will administer your Estate, who in turn will prepare your taxes and distribute property according to your expressed wishes. You can name who you intend to have care for minor children in a Will.

“I don’t need a lawyer to prepare a will.”

This is true. Holograph Wills and executory Wills are perfectly legal documents to express your last wishes. However, the mistakes are on you if you get it wrong. Where will the Trustee look to find that oh-so-important document? With a lawyer-prepared Will, you receive legal advice while you’re giving instructions. Mistakes are on the lawyer who is insured if something is amiss. The lawyer takes steps to ensure that no mistakes are made.

A lawyer-prepared Will helps mitigate allegations of undue influence and the Will can be structured in a way so that it can be easily administered. I once had estate dispute involving a holograph (hand-written) Will. It distributed all the assets in the first clause and then set up a number of trusts – which could not be funded because all the assets had been distributed in that first clause. Confusion about the intended heirs and what was intended required several lawyers to sort it all out – but this is not done for free. Avoiding conflict and uncertainty with a lawyer-prepared Will allows peace of mind and leave more to be distributed to those who are left behind.

(And your lawyer will keep your Will in a secure place – no one has to root around in that forgotten bedroom drawer to find a Will that you may or may not have prepared.)

Make an appointment to see a legal professional who practices in the area of drafting Wills.

November is “Make a Will Month”.  How may we help you?

contact@sullivanlaw.ca