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« Mar I used to think that family law was the number one topic of Strictly Legal, but the shows that I had on January 24th and February 7th, 2008 have proved me wrong. Wills and estates is the most popular topic, hands down.
On January 24, 2008, Ian Hull, a partner with Hull & Hull LLP in Toronto, was my guest for a program that focused on the rights and responsibilities of estate trustees and executors. No sooner had Ian and I reviewed some of the basic terminology in this area (for example, estate trustee and executor are the same thing. The terminology was simply changed recently in Ontario) – and the phone lines lit up with dozens of questions about the important responsibilities that go with taking on the task of being someone’s executor/estate trustee.
This is one of the reasons why I put an entire chapter in my book “Strictly Legal,” dealing with the area of wills and estates. In part, I think it is a demographic driven interest. Baby boomers are getting older and not only thinking about their own wills and estates, but also their responsibilities as executors/estate trustees for their parents’ estates.
On February 7, 2008, my guest was Jordan Atin. He is also a member of the law firm Hull & Hull LLP and, like Ian, is very knowledgeable in the area of estates and trusts. Jordan is the Chair of the Estates and Trust section of the Ontario Bar Association and the author of a book called “The Family War: Winning the Inheritance Battle.” In his book, he devotes an entire chapter to “Being an Executor – What You Need to Know.” Check out his website at www.thefamilywar.com .
The importance of this function is made clear when one realizes that the executor/estate trustee has responsibility for such things as finding the will, arranging the funeral and burial, dealing with a probating of the will, collecting and securing the assets of the estate, paying the debts – including income tax – making investment decisions pending distribution of the estate, tracking down beneficiaries and making sure everyone gets what they were supposed to receive under the will.
During the course of both programs I tried to deal with some of the many e-mails that have been sent in with very practical questions about the role of executors and estate trustees and the rights and obligations of beneficiaries. In one e-mail, a viewer, Margaret, asked whether the executor/estate trustee could be held responsible for several years of income taxes that had been left unpaid by the deceased. There was no money left in the estate and she was concerned that, as executor, she might be responsible for that debt. As it turns out, if there are no assets at all for satisfaction of debts of the estate, such as income tax, then that is the end of the discussion. Beneficiaries who expected to receive gifts will be disappointed to learn that any assets are used to pay debts first. Incidentally, the first and foremost debt is to make sure that the deceased gets buried, but then income tax and other bills, such as unpaid Visas, mortgages and the like, are paid first. Anything left over is distributed. The only time that an executor/estate trustee might get into trouble is if they distribute assets or gifts under the will without first ensuring that the debts have been paid. In other words, Revenue Canada could show up asking for arrears of taxes and an executor who has paid out money to beneficiaries may find himself or herself responsible for those taxes.
An e-mail from Paul asked whether an executor/estate trustee had any role to play prior to the person making the will actually passing away. This executor was worried as he watched someone exercising what he considered to be undue influence over the testator (the person who had made a will). An executor has no legal responsibility or power until the testator is deceased. If a power of attorney was in place for personal care or property, the holder of that power of attorney might have some authority to intervene, but an executor has none. This does not mean that the person selected as executor could not, on a moral basis as a friend, intervene to protect the person being subjected to undue influence, but that would have nothing to do with the fact that someday he or she might have the job of executor/estate trustee, once the individual has passed away.
A common question when we talk about wills and estates on Strictly Legal is whether beneficiaries are entitled to a copy of the will and they most certainly are. They are also entitled to ask questions of the executor/estate trustee and call that individual to account as the estate is gathered up, debts are paid and preparation for distribution of any remaining money is proceeding.
Since this topic is the most popular, we will definitely be returning to the area again for future programs. Ian and Jordan always do a great job of answering questions in understandable language, so you can expect to be seeing more of them on Strictly Legal in future.
Michael G. Cochrane, B.A., LL.B.
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