People who die without a will could be sowing the seeds of a wasteful court battle over their estate, as the family of an Ontario man recently discovered.
When Bernold Summers – the deceased in a recent case concerning his estate – died without drafting a will, he gave up control over not only the distribution of his assets, but also the identity of the person responsible for administering his estate.
Unfortunately for his sole heir, that meant a long and expensive legal battle to get an inappropriate executor removed from the job.
When someone dies without a will in Ontario, the government effectively decides what will happen to their property – via the province’s Succession Law Reform Act, which sets strict rules for the distribution of assets.
Under the Act, the deceased’s surviving spouse gets the first $350,000 from any estate, with the remainder divided between the spouse and any surviving children. When there is just one child, the assets are split equally with the spouse.
In the case of Summers, who was without a spouse or children, his 82-year-old mother was the only person entitled to any of the estate. According to the court decision, she was initially happy to let another of her sons take on the role of estate trustee, but soon changed her mind when he began ignoring her requests to list the deceased’s home – the estate’s main asset – for sale.
However, it took more than a year from the mother’s first complaints about her son’s handling of the estate until a judge ordered his replacement.
“The estate’s sole beneficiary has been kept ignorant of important facts and has had her wishes ignored by a trustee who has pursued his own interests in the execution of his duties as trustee,” the judge wrote. “Removal is necessary to ensure that the estate is not endangered.”
Choosing the right executor is an often-overlooked element of estate planning. The level of responsibility associated with the job calls for the appointment of someone you know well and trust implicitly. But an executor needs to be willing as well as able to act: there’s no point in selecting someone who lacks either the time or the interest necessary to do the job properly.
Testators should have a frank discussion with their preferred executor, explaining why you want them to take the position and what is involved in the role. Prospective executors should know that they can expect to be in the job for at least a year, gathering financial information, signing forms, filing taxes, paying off debts and distributing assets under the estate.
Although they will generally be able to seek help from lawyers, accountants and other professionals, the executor is expected to coordinate any necessary work.
If nobody among your friends and family fits the bill, it may be worth approaching a trust company to administer your estate instead.
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