March 5, 2020 Category News, Our Latest Insight
In British Columbia, an individual named as an Executor in a will can choose to decline to act at the time of the willmaker’s death. ( see section 104 of the Wills, Estates and Succession Act of BC – the “WESA”). If refusing to act, the Executor is said to be renouncing. To renounce is to refuse or decline to do or receive something. In the case of an Executor, it is the right to refuse to accept the office and associated duties of an Executor. While not common, and as an alternative to renunciation, an Executor can step aside and at the same time reserve the right to apply for probate at a later date. Restated: with a few exceptions, an Executor cannot be forced to act. This article is intended to provide a brief overview of the topic of renunciation in B.C.
The renouncing Executor would sign a legal form ( see Rule 25 -1 (4) of the B.C. Supreme Court Civil Rules) , advise those involved of that decision, and file the renunciation with the court. This alerts the court that the renouncing Executor is stepping aside. If renunciation occurs, those named in the will as co-Executors, or alternate Executors, would carry on as appointed. If no one remains to act, an individual, often of family member or beneficiary, will step forward. The Public Guardian and Trustee, an authority created by statute , may also agree to act as an Executor, if no one is willing or able. (see the Public Guardian and Trustee Act of B.C., and section 164 of the WESA).
The exception to the right to renounce occurs when the Executor has intermeddled. Intermeddling generally means acting in relation to the property of the deceased in a manner that shows an intention to assume the responsibilities of Executorship. If the Exor has intermeddled, the right to renounce is generally lost. The case law addressing the issue of whether or not intermeddling has occurred can be difficult to interpret. It is best to do nothing until properly advised.
The role of an Executor is often arduous, stressful, and time consuming. Some duties include: making funeral arrangements, protecting and managing the deceased’s assets throughout the administration period, paying bills and taxes, accounting to the beneficiaries, and winding up all incidental matters. In some simpler estates, the estate can be wound up within 12 months, but in many cases, the process can extend well beyond this. If the will provides for ongoing trusts, the Executor may also be acting as trustee, and be required to manage a trust for a time, often years into the future. If there are ongoing lawsuits, or actions that have to be taken, the Executor will be responsible for the commencement or continuation of such actions. If there are assets located outside B.C., the Executor will generally be responsible for those foreign assets. Will the Executor face difficult beneficiaries, or beneficiaries who are warring amongst themselves? This list of possible reasons to renounce is lengthy. Due consideration is required before accepting the role.
The Executor can also face personal legal liability if mistakes are made during the administration process. The risk is so significant that there are now some insurers who will insure an Executor against personal liability when acting as an Executor. The duties and associated pitfalls that go with the role of Executor are serious, and numerous. Some duties arise out of common law, but many arise as result of statute, unbeknownst to even the wary. The traps can be daunting, particularly for the lay public.
If you have been named as an Executor, it is wise to seek legal advice before taking any steps. What may seem simple is often not. You might be beyond the Rubicon before you know it.