Compliance with court orders is not optional, as one jailed executor recently discovered.
The choice of executor – also known as the estate trustee – to administer your estate is one that many testators take for granted, on the assumption that a close friend or family member will be happy to take on the position.
But the role of executor is not an easy one, typically involving at least a year gathering financial information, signing forms, filing taxes, paying off debts and distributing assets under the estate.
And if your pick is not up to the job, the consequences could be grave – not only for your heirs, but also for the executor themself, as one recent court case demonstrates.
According to the ruling, the deceased’s son was appointed following the mother’s 2017 death, under a will that provided for her estate to be split equally, between her three minor grandchildren.
Several years later, the Office of the Children’s Lawyer got involved, after discovering that his mother’s two condos had been sold for almost $600,000 within weeks of her death. In early 2022, the court ordered the executor to file an application to pass his accounts within 60 days.
Despite multiple attempts by the OCL to force the executor into compliance, the executor continued to ignore the order for years, before a judge found him in contempt.
By the time of his sentencing hearing, the executor had still not applied to pass his accounts, nor had he provided the deceased’s grandchildren with any of their inheritance. He explained that he had used the funds from his mother’s condos to buy a property of his own with his wife, who had subsequently held on to the home after their separation.
The executor and the OCL have reached an agreement for the executor to repay the missing funds in instalments, but the judge concluded that a six-day prison sentence was also required in the circumstances.
“There are many aggravating factors that support the imposition of incarceration. The Respondent was acting in a fiduciary capacity as Estate Trustee. The Applicants, the Respondent’s children, are minors and are vulnerable persons whose interest must be protected by the Court,” the judge wrote, ordering that the prison term be served in two-day blocks every other weekend.
Although this was an extreme case, it’s also an important reminder to testators that their choice of executor is not a decision to take lightly.
When making your own pick, you should be looking for someone you trust implicitly, considering the level of responsibility associated with the job.
Although they will generally be able to seek help from lawyers, accountants and other professionals, the executor is expected to coordinate any necessary work, so make sure you have a frank discussion explaining why you want them to take the position and what is involved in the role.
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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