Being an Executor or Estate Administrator is a big job and it also carries some risks. It is important that the Executor secures legal advice when winding up an estate, or else they may find themselves facing criticism from the beneficiaries, or even dealing with Court proceedings initiated by the beneficiaries.
Anyone winding up an estate should have a lawyer to help and advise them.
Here are just a couple of examples of the many possible mistakes that well-meaning Executors and Estate Administrators have made:
Scenario One: Mary did not know that her neighbour, Ms. Ivy, had named her as executrix in her Will. She did not find out until after the dear old lady passed away. When Mary reviewed Ms. Ivy’s Will, it looked pretty straight forward. Ms. Ivy had left her investments to her sister, Clara, and left her house to her brother, Jim. Mary decided that this was a simple situation, and that she did not need a lawyer.
When Ms. Ivy prepared her Will, the investments and the house had approximately the same value. So Clara and Jim both received the same amount from the estate. But 15 years later, when Ms. Ivy passed away, the investments were worth much much more than the run-down old house. Mary knew that Ms. Ivy wanted to be fair. Ms. Ivy wanted her brother and sister to receive the same amount of money. So Mary decided that – contrary to the provisions of the Will – she was going to give the beneficiaries, Jim and Clara, equal amounts of money. Mary decided to give the house to Jim, but also gave him some of the investments. This resulted in Jim and Clara both receiving the same amount of money from the estate. Mary thought she was doing the right thing. Who could argue with fairness? However, Clara was very unhappy about this. Mary had a duty as Executrix to follow the terms of the Will, and she did not do so. So Clara sued Mary for the $50,000.00 Clara would have received if only Mary had followed the terms of the Will.
Scenario Two: When George’s father passed away, George already knew what was in the Will. His father had always told him that his estate would be divided four ways between his three children and his elderly mistress, Ms. Scarlett. It was not a big estate and George did not want to spend any money on a lawyer, so he decided to handle things on his own. He sold his father’s home, gathered up his investments, and divided up the money four ways between the three children and the mistress.
However, Ms. Scarlett was aware that two of the adult children owed money to their father. The father had loaned money to two of his children when they bought their first home. In fact the two children owed more than $80,000.00 to their father and had never made a single payment against that debt. George had just assumed that now that his father had passed away, that the debts were forgiven. But Scarlett was outraged that George had not collected the $80,000.00 debt on behalf of his father’s estate. In fact she sued George for his failure to demand repayment of the loans owing to his father.
The moral of these stories is that being an Executor or Executrix is serious business. It is important that you retain a lawyer to provide you with legal advice to insure that you are not personally liable for any missteps or mistakes.