A recent decision from the Superior Court of Justice of Ontario outlines the risk that testators take by naming executors that are resident outside of Canada. The case The Estate of Frank Ernest Warren and Bolton v Armstrong, 2017 ONSC 1781 (CanLII) was initiated by the Applicant, who was a beneficiary of the Deceased's Will, who was to receive her inheritance from the deceased through a Henson Trust so as to not affect the Applicant's eligibility to receive income support benefits from the Ontario Disability Support Program (ODSP).
The Executors of the estate, who lived in Scotland had to fly down to Canada for several weeks to manage the estate of the Deceased. The estate ended up paying for the executors' flight to Canada, as well as hotel and meal expenses. According to the Honourable Justice J.W. Sloan, this was a situation the testator created for his estate, and the executors were entitled to have these expenses reimbursed.
Unfortunately, for the Executors, a large chunk of expenses were not reimbursed. The Applicant argued that the executors delegated most of their work on the estate to a law firm in Canada, most of which was charged at a rate of $95/hour. Although this may have seemed like a reasonable course of action given the distance of the executors' residence and given the likely fact that they were not specialists in matters of estate law, the court found that the testator had unduly burdened his estate by the choice of executors and proceeded to approve roughly 50% of the legal fees paid by the executors, leaving the executors to pay the other 50% out of their own pockets. This was especially troubling because the executors were also not allowed any executors' compensation in this scenario.
These problems, and the related costs, could have been avoided with the naming of primary executors who were Canadian residents, or at least co-executors or alternate executors that were Canadian residents.
An additional issue that arises with Executors who reside outside of Canada is the risk that the court could require the Executors to obtain a bond at the time of applying for probate, which would create another costly burden to the management of an estate.
If you need help choosing an appropriate executor, a wills and estates lawyer may be able to help you in your particular scenario. Click the contact button below to set up a Wills consultation today.
This article does not constitute legal or other professional advice or an opinion of any kind.
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