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The Irresponsible Executor

April 12, 2019 by GarryHazel  


“Loving parents leave their wealth to grateful children” — if only it were that simple. When an estate is left in a Will, the executor chosen to administer the estate has a significant duty placed on them to ensure that the estate is maintained, with the utmost care.  This duty exists from the moment the Will takes effect until the estate has been distributed to the various beneficiaries. During this period, the court grants the executor the authority to assess a will-maker’s assets and act on behalf (and in the interest) of the estate and its beneficiaries. However, the executor can be held liable for failure to manage and protect assets in the estate.


Consider the following scenario: Ted Banner, a widower, was an old-fashioned man. As much as he appreciated good etiquette, he believed even more in the virtues of property investments. With the ascent in values of properties in British Columbia, it was evident to him that his investment principles were sound. When deciding whom to appoint as executor for his estate, Ted could think of no one more suitable for the role than his old rugby teammate and best friend, Paul. Besides, being godfather to two of Ted’s boys, Paul shared the same values as Ted did. Ted was right; no one knew the Banner family more than Paul.


Upon Ted’s passing, Paul, in his role as executor,  set about dealing with Probate so that he could distribute the assets to Ted’s beneficiaries. The assets of the estate were made up of Vancouver property holdings for the most part, including several rental properties, a small office building, and the Banner family home. Even though there was money included for estate property management expenses, Paul chose to be frugal, convinced that if he wasn’t, he might not be able to finance the administration of the estate through to the Grant of Probate with the small amount of cash that was in Ted’s bank account when he died. Paul decided to halt all ongoing activities on the estate, including the construction work on the roof of one of the properties. He then proceeded to get in touch with Ted’s surviving sons and the only beneficiaries of his Will, Adam and Jacob, and to carry on his task of preparing the Grant of Letters Probate.



Two weeks later, an alert message was sent to the phones of all residents of Vancouver. A storm was building and everyone was urged to make preparations for it. The construction company got in touch with Paul to urge him to allow them to proceed and patch up the roof before the storm rolled in, but Paul took no heed of this warning and assumed — wrongly — from his last assessment of the roof that it was strong enough to weather a one-day storm. Three days later, the storm hit the city. It rained heavily for more than two days and critically damaged the rest of the roofing. The damage extended to the flooring on each level of the property. When the storm had subsided, Paul went to the property and found that the floors and the roof had been severely damaged. The property now needed an entirely new roof and flooring. The property, which was valued at $500,000, would need more than $175,000 worth of repairs.


Paul called up the insurance company but was told that the insurance coverage on the property had lapsed. Paul kicked himself for incorrectly assuming that Ted would have insurance coverage in place. When Ted’s sons were informed of this, they decided to hold Paul liable for the damage to the property. Paul argued that given the demanding tasks of arranging tax and debt payments, he had to halt any ongoing projects to prevent further expenses on the estate until he felt in control of expenditures. He argued that his personal liability should be excused from any breach of his fiduciary duties. Ted’s sons, however, believed that Paul had an obligation to them as executor and that Paul was in breach of his duty to properly manage the estate until the final distribution had been made.


Adam and Jacob decided to consult a lawyer. They were told that Paul had breached his duty to protect and manage the estate until it had been distributed. Paul’s assumption that the finances of the estate would not have been sufficient led him to cease any further expenditures, though rational, was erroneous. He had the duty to act with care in his role as executor, and in this case, his inattention to the non-existence of insurance coverage was a major and costly breach of that duty.


When a beneficiary has concerns about the actions (or inactions) of an executor which they believe has resulted in a reduction in the value of an estate, or if they question the validity of a judgement call made by an executor which they believe has negatively affected the estate or its beneficiaries, it is prudent to seek legal advice from an estate litigation lawyer. 


Helpfome, the Personal Legal Services division of Hammerberg Lawyers LLP, offers comprehensive estate litigation services with a uniquely personal, empathetic client approach. Helpforme lawyers are experienced negotiators as well as trial lawyers. Drawing on their knowledge of the Inheritance Law and their dispute resolution skills, Helpforme’s estate litigation lawyers help clients to move through emotionally charged situations to find an amicable solution among beneficiaries. 


Helpforme offers estate litigation services on a contingency basis. Contingency-based fee simply means that clients don’t have to pay any legal fees until their case is positively resolved. Helpforme Estate Litigation lawyers enable you to move forward with confidence and peace of mind. If you have an estate litigation dispute, Helpforme can be reached at www.helpforme.ca.