When someone passes away, the property and estate they leave behind must undergo a legal process called estate administration. If the deceased left a will, then their assets will be distributed according to their wishes, applicable debts or taxes will be paid, and so forth. If there wasn’t a will, then this process proceeds according to BC laws.
The executor is the person legally responsible for taking care of these responsibilities and can either be named in the will or appointed by the court system. If they fail for whatever reason, there are legal consequences to face. There’s also plenty the deceased’s remaining family can do if this occurs.
Here we’ll go over what you should know about executor duties in Canada, including what happens if an executor fails to fulfill their duties and how a potential replacement process might go.
Understanding Executor Duties in Canada
It’s an estate executor’s responsibility to operate with the best interests of both the deceased’s estate and its beneficiaries in mind. Common executor responsibilities include:
- Locating and protecting the deceased’s assets and property
- Paying any outstanding debts, applicable taxes, and administrative fees
- Distributing what’s left after this process to the deceased’s beneficiaries
The executor is legally obligated to fulfill these duties not only honestly, but also fairly and in a timely manner.
Consequences of Executor Negligence in Canada
What happens if an appointed executor fails to fulfill their duties? Possible consequences include, but may not be limited to, the following examples:
- Delays in estate distribution: Negligence on the part of the executor can drive up costs and contribute to distribution delays that affect beneficiaries.
- Legal liability: If an executor fails to fulfill their duties or otherwise mismanages assets, there could be legal consequences.
- Financial penalties: If an executor doesn’t properly see to the deceased’s tax obligations, penalties and interest charges could apply, further depleting the estate.
- Beneficiary disputes: Executor negligence can cause trouble among the beneficiaries, as well, leading to bad sentiment and possible legal disputes.
Steps to Take if an Executor Fails to Complete Duties
If you or a loved one are dealing with an estate executor who may be mismanaging assets or otherwise not taking care of their legal obligations as they should, you don’t have to simply accept it. Here are some actionable steps to take.
Communication and resolution
Start by connecting with the deceased’s beneficiaries and encouraging them to connect with the executor. They may need to clarify the executor’s responsibilities and duties or otherwise set reasonable expectations and standards.
Seeking legal advice
Seeking legal guidance, exploring professional mediation, or both is a solid next move if attempts to personally get the executor back on track don’t resolve the matter. Be sure to contact an experienced professional who specializes in estate law for best results.
Filing a formal complaint
If the executor continues to neglect duties or resist responsiveness, you may wish to initiate a formal complaint. You can apply to the court system to legally compel the executor to produce accounting records detailing debts, assets, and distribution actions related to the estate.
You can file a damages claim if you believe the executor’s actions (or lack thereof) have harmed the integrity of the estate (you can also file a lawsuit to cover damages or loss). You can request that the court replace the executor with someone more appropriate, as well.
Replacing an Executor in Canada
Let’s take a closer look at what you should know if you or the deceased’s beneficiaries decide that replacement is the best option.
When is replacement necessary?
Replacing an executor is usually the most sensible course of action in situations that involve prolonged or egregious neglect, a conflict of interest, possible criminal behaviour, or any combination of those factors. However, extenuating circumstances may also incapacitate an executor, deeming a replacement necessary. We encourage you to talk to an experienced estate lawyer for the best advice for your situation.
Legal process for replacement
To replace an executor, you need to initiate a legal process that involves the following steps:
- Filing a formal application with the court, along with supporting evidence
- Giving notice of the application to beneficiaries and other parties of interest
- Participating in a court hearing where both sides will have the opportunity to plead their cases
Selecting a new executor
If the court determines that the executor should be removed, it will issue an order stating as much. It will also name a new executor. This could be someone named in the will or another neutral administrator capable of taking over the associated duties. The new executor must then formally accept the position and take the necessary steps to legally obtain authority over the deceased’s estate.
If you have a say in the appointment of the new executor, be sure to choose someone responsible, fair, honest, and reliable. A few tips for choosing an executor include: they should be financially literate, emotionally stable, and adept at handling complicated tasks and responsibilities.
Need Help with Executor Duties?
While dealing with a neglectful or unresponsive estate executor can be frustrating and stressful, know that you’re not alone and that there’s professional help available. Contact the estate planning professionals of Munro and Crawford today and let us know how we can be of service.
