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Fulton & Company LLP ESTATE NEWS
What does an executor need to be aware of, to avoid making mistakes?
In a prior bulletin, we wrote about common errors and misconceptions that executors often encounter when administering estates. Here are some more common mistakes that executors make:       
Not following the terms of the Will

Executors can be tempted to ‘re-write’ parts of the Will that they feel are unfair or impractical. For example, an executor might give personal belongings to a person not named in the Will, believing this is what the will-maker actually wanted. Other times, an executor might sell an asset and distribute cash to the beneficiary, despite that the Will directs that the actual article be given. The executor’s job is to distribute the estate according to the Will, not to re-write it.
 
Not properly valuing assets

If selling an estate asset, executors must ensure they obtain qualified appraisals and opinions as to value. This becomes especially important where estate assets are sold to a family member or other non-arm’s length purchasers.
 
Not knowing which expenses are estate expenses

Not all expenses related to the deceased’s death are proper expenses of the estate. Even where an executor makes an honest mistake, he or she may be personally responsible to reimburse the estate for costs that were improperly repaid to the executor, or to a beneficiary who incurred the expense.   For example, it is usually not proper for the executor to reimburse beneficiaries for their cost of travelling to attend the funeral.
 
Failing to properly deal with estate debts and taxes

By law, debts of an estate, including tax liability, must be paid before beneficiaries receive their share of the estate. There is a specific order of priority set out by Canadian law that dictates in which border creditors should be paid.  An executor who pays beneficiaries without taking all proper steps to clear debts and pay taxes may be personally responsible to the creditors for paying those debts.
  
Trying to do everything cheaply


An executor must be mindful of administration costs. However, he or she should also recognize where it is important to involve professionals, such as accountants, lawyers, appraisers, realtors and financial advisors. Failure to do this can result in mistakes, and end up costing the estate more money.

Wherever an executor makes a mistake involving estate assets, there is a risk of personal liability. When in doubt ask for professional help.
 
For more information, please contact a member of our Estate Team.
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Lyle
Backman, Q.C.
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John
Grover
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Leah
Card
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Danielle
Leslie
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Tyson
McNeil-Hay
DISCLAIMER: Content found in this Newsletter is provided solely for informational purposes. The Content is current at its original publication date, but should not be relied upon as accurate, timely or reliable for any particular purpose. The Content is not legal or professional advice or an opinion of any kind. You should not, in any circumstances, rely on the information obtained through the Newsletter without first obtaining legal advice from a lawyer at Fulton or other legal counsel.

DISCLAIMER: Content found in this Newsletter is provided solely for informational purposes. The Content is current at its original publication date, but should not be relied upon as accurate, timely or reliable for any particular purpose. The Content is not legal or professional advice or an opinion of any kind. You should not, in any circumstances, rely on the information obtained through the Newsletter without first obtaining legal advice from a lawyer at Fulton or other legal counsel.






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