An Executor of an estate performs the incredibly important act of carrying out the instructions contained in a will. This role empowers them to settle a person’s financial affairs upon their passing, disbursing their estate, settling any financial obligations, and informing any beneficiaries of the estate of their new-found property.
The question of how long this process takes can be a thorny one, with many beneficiaries finding themselves wondering if the Executor is operating too slowly. The truth is, this process can drag on due to several factors. Let’s take a look at how long an Executor has to settle an estate in BC.
The Executor’s Year
In British Columbia, an Executor generally has one year in which to settle the affairs of the estate. This time period is commonly referred to as the Executor’s Year.
During these twelve months, the Executor has no obligation to distribute to the beneficiary (ies) any assets of or income earned by the estate during that period – unless it is specifically provided for in the will.
Why is The Executor’s Year Necessary?
The executor has many duties to attend to when assuming the role of executor, and various duties, such as dealing with the debts of an estate and gathering in asserts, necessarily take some time and must be completed before distributions are made to beneficiaries.
There are also restrictions on an executor’s ability to distribute the estate in the first 210 days, as qualified individuals may choose to contest the will during this time period, and distributing assets before knowing what claims may be coming up could lead to significant liability.
An essential aspect of estate administration is the passing of the Executor’s Accounts. This process involves the Executor providing each beneficiary with a detailed accounting of the estate, including assets and liabilities, transactions occurring while they acted as Executor, proposed remuneration for acting as the Executor, and details on how the estate will be distributed.
This process takes time, and the Executor must be meticulous in their accounting. Ultimately, each beneficiary must give their consent to the accounts. If one of the beneficiaries does not consent, the accounting of the estate becomes a matter for BC courts to review and approve.
What if the Estate isn’t Settled in One Year?
If the accounts are not passed within one year any beneficiary of the estate can make a court application requesting the accounts are passed as soon as possible. When this occurs, a judge will make an order on what the court considers appropriate for the time and manner of passing the accounts.
Should the accounts not be passed after two years, a beneficiary can once again make a court application to compel the Executor to pass the accounts. The Executor must also explain why the accounts have yet to be settled.
The court may direct you to pass the accounts by a particular time and method. However, if the court finds it would be warranted in the circumstances, you may face consequences, including the removal of your appointment and the payment of costs. This is generally reserved for cases where the executor has “misconducted” him or herself. The executor is not required to put aside “everything else” to provide an account at the “peril of a suit for an account and costs”: see Sandford v. Porter (1989), 16 O.A.R. 565 (Ont. C.A.)
If a will has been challenged, an executor may not distribute an estate without the court’s permission, and the usual process is put on hold.
Examining Legal Precedent
Let’s take a look at an example of how a tardy Executor has been handled in BC courts.
In MacLean v Maclean, 2009 BCSC 292, the court found that the executor failed to pass his accounts within the timeframe required. However, the court found he was “sincerely overwhelmed and frustrated” by the beneficiaries’ demands for an accounting, which reached far beyond what is reasonable to request of a layperson acting as executor. The executor was ordered to provide an accounting within 14 days and he complied, but ultimately, the court found he had discharged his duties as executor and it did not impose any penalties on the executor.
Acting as an Executor
If you are encountering difficulties with wrapping up the estate within a year’s time, it is generally a good idea to keep the beneficiaries informed of the situation and to seek their consent to an extension of time. You may also want to seek legal advice to determine whether it is advisable to distribute a portion of the estate while reserving a holdback to cover any potential estate liabilities.
Get in Touch
If you need help navigating any aspect of the estate process, get in touch with us today. Our lawyers are ready to assist you with any questions and concerns you may have regarding this and other family law matters.