Administration of the Estate Flashcards
2 courts in Wills Law
Court of Probate + Court of Construction
Probate Court
Where to go when proving/disproving a will or mounting legal challenges concerning the validity of a will. Determines if will is valid.
Court of Construction
Deals with interpretation of ambiguous passages in wills. Will itself is valid just interpreting.
Executor
A named estate trustee (personal representative) in a will. All property in will automatically vests to you when testator dies (you are owner in trust- hold legally for the benefit of deceased estate)
Administrator
Executor appointed by a court when one not named or executor renounces their position or otherwise cannot act as executor (will) OR when someone dies intestate vests with court and they name someone through application or suggestion.
Who cannot be an executor?
- Minors (under 19 in NB),
- persons with personal claims against the estate,
- bankrupt persons,
- person with mental health disabilities that with interfere,
- persons who murder testator,
- persons in jail.
- Should be in province but exceptions can be made (complicated though)
Who can bring an action to remove or qualify an executor?
Anyone effected by a will
Do executors need to accept the position?
No, they need not accept and can say no/ resign at any time even after testator dies (further you get into it though harder it becomes and may have to pay legal fees)
When no executor/ will with whom does the property vest?
Property vests with the court until administrator is appointed.
Doctrine of relation-back
If certain things had to be done by a date (ex: mortgage) but no administrator at the time, if when they are named they deal with it promptly they will not face same rules as ordinary person.
Who is qualified to be an administrator?
- Spouses (but not ex-spouses), next-of-kin, parents, siblings.
- Not limited to these people,
- Courts can appoint a corporation (i.e. bank) if the preferred administrators are unable to do it.
- The same people who can’t be executors, cannot be administrators.
Why are common law spouses often not appointed as administrator?
Because they have a claim. In intestacy will likely file a dependance relief claim.
What do people appointed administrators have to do?
People who are appointed to be admin of estate have to file a bond (security deposit that you put with the court because you then get all the estate).
It’s a tough job to be administrator why would anyone apply?
If no one steps forward the court appoints a corporation (bank) which charges a lot, thus reducing everyone elses shares
When applying to be admin what do you have to file?
Notice to all next of kin and evidence of those that have priority above you renouncing appointment
Grant of probate
Proving a will in solemn form or common form. Probate deals with validity.
Solemn form
There is a real issue to be addressed (person raised issue, met threshold evidence, need to have a trial)- uncommon
Common form
No trial. File will at court to get a certificate of probate
Do all wills require probate?
- No, important because to probate costs money.
- Don’t need to probate to have authority as executor (will does that)
What is the real reason an executor would need to probate?
To obtain cooperation of 3rd parties who have physical possession of assets contained in the will. Ex: bank holding money.
When do you absolutely need probate?
- When real property left in a will (need for land registry)
- Subject to litigation
- If there is a matter of construction
- If executor is being sued
Cost Awards
Those who bring frivolous and vexatious claims against an estate can have costs awarded against them
What about executor/ administrator costs?
- Generally fully indemnified, state will pay legal bills, for any legal expenses they incur during their role (if they get sued or have to renounce for good cause)
- Any improper behaviour or forced removal will be incurred by them personally
Passing of accounts
- Court ordered or voluntary disclosure of expenditures made by an executor either personally or out of the estate.
- Keep meticulous records of expenditures for taxes/fees.
- To be compensates as an executor have to file passing of accounts.
What will filing a passing of accounts trigger?
Motion for probate.
Do administers have to pass accounts?
Yes
Large and small estate passing timeline?
Large typically once every two years, small at the end
Personal Compensation for Executors
- Have the right to be compensated for work
- Will typically outlines compensation (if it does, sum is non-negotiable)
- If does not say ex’s can apply for compensation
Toronto General Trust Corp
Lays out how to determine amount of compensation for executors:
- Magnitude of estate
- Care and responsibility springing therefrom
- Time taken
- Skill and ability displayed
- Success which has attended their administration
What if executor doesn’t deal with taxes?
If give away all money and don’t deal with tax, personally on the hook for taxes
Solicitor fees when it comes to an estate
- Normally determined on the passing of accounts (beneficiaries/ executors can challenge amount at this time)
- Judge can vary the bill
Who is the solicitors client?
Executor, not the estate
How much can a solicitor charge?
On the normal quantum meruit basis. Cannot charge by percentage of the estate unless the estate trustee and solicitor have agreed the solicitor may do so.
During passing of accounts
Can also challenge if they think the work a lawyer is doing is unnecessary or bad
Can you be both lawyer and executor?
- Yes, lawyer in charge of court stuff, executor distributing.
- If both, even more meticulous cannot bill for time spent on one under name of the other
Duties of personal representatives
(1) Advertising the death (not obituary)
(2) Payment of debts
(3) Bodily remains
(4) Distribution of estate
What is personal compensation for executors based on?
It is not regulated by the costs tariffs, the amount is determined by the court – “Fair and reasonable”. Normally never amounts to more than 5% of the value of the estate.
What if on advertisement of death a creditor fails to come forward?
Protects executor
Advertising the death
Not an obituary. Gives notice to creditors/ ask whether anyone has claims against the estate.
Payment of debts
- File/pay income taxes
- Pay any secured debts
- Pay any funeral expenses
- Legal claims against estate
- Expenses of administering estate
- Unsecured debts
- Anything related to disbursement of assets (once rest are paid)
Executors year
- Year to get your shit together without any claims. Hire lawyers, accountants, etc.
- Can’t take too long though, provincial legislation for a beneficiary to get a vesting order
What if insufficient money to pay these things?
Provinces have a list that ranks them
Dealing with bodily remains
- Not bound to instructions in a will that are unreasonable or disproportionately costly.
- But, ex: if request cremation have to have good reason to say no
Distribution of estate
Estates that are a just a house, and the will is 20 legacies, obviously, you need to sell the house first. Before selling property be very familiar w/ the power of sale rules in the jurisdiction.
