There are times where an executor unduly delays in both the administration and distribution of the estate. While a simple estate should be distributed within the first year following the death of the testator, some estates are far more complicated and take a great deal longer. When the executor takes too long the beneficiaries have legal options. This educational video highlights the issues faced by the executors, beneficiaries and the lawyers who represent them.
Delays in distributions. Is this a red flag for beneficiaries?
In common law there is a centuries old practice of giving executors 12 months from the deceased’s death to wind up the estate. This executor’s year is intricately related to the assessment of whether the executor has engaged in undue or unreasonable delay.
Often, executors delay in making the distribution. Sometimes there are good reasons and sometimes they are not.
In the Kajaks Estate case, the deceased named his stepson as executor. There were no distributions for eight years. You could imagine that this raised some red flags for the other beneficiaries. The beneficiaries went to court. The executor was ordered to make interim distributions of $100,000 to each of the applicants. While the residuary beneficiary received an interim distribution, the applicants did not. The applicants went back to court and sough to find the executor in contempt of the previous order and to remove him for delay.
In Ontario, the case law tells us that there are six factors a court will take into account when deciding what to do when an executor takes too long to distribute the assets of the estate. The bottom line is that courts generally do not remove executors just to punish them for misdeeds. But judges are guided by what is in the best interests of the beneficiaries. The judge in this case, ordered that the executor be removed. The key issue was the welfare of the beneficiaries. The judge believed that there was no reason why the estate remained undistributed for what was then nine years since the deceased’s death. Clearly there was prejudice to the applicants. They were without their money unnecessarily for nine years. Key to the court’s decision was the finding that the agenda of the executor was to hold back the distributions to persuade the applicants to vary the will so that his children would get half of the estate. But the court’s decision was not about punishing an executor who refused to do his job, it was a recognition by the court that the executor would not properly administer the estate in the future given his own conflicting interests.
My name is Greg Sidlofsky. Our firm has a lot of experience handling these sorts of cases. It’s important to remember that a three-minute video is no replacement for proper legal advice from a competent lawyer. If you are a beneficiary of an estate who feels the executor in charge is unduly delaying in giving you your inheritance, then you should consult with a lawyer with expertise in this area.