Executors of Wills often wise to take their time
If you have been appointed executor of a Will of a loved one who has passed away, the RMB Wills and Estates division has some important advice:
No matter how simple or complicated the Will may seem, it is important to understand an executor’s obligations before distributing an estate to the beneficiaries.
In some cases, beneficiaries will press the executor to make a distribution as soon as possible when funds come in, but there are important factors to consider first.
As executor, you should consider whether somebody could make a claim against the estate. This could be a creditor seeking payment for an outstanding debt that you may not be aware of, or an eligible person who decides to make a family provision claim for a greater share of the estate.
You can be held personally liable for outstanding claims where you distribute funds to beneficiaries before these claims are resolved.
By publishing a notice of intended distribution, the executor can protect themselves from this liability. This notice can be published on the Supreme Court registry website after probate is granted provided the funds have not been given to the beneficiaries. If the notice is published, the estate can’t be distributed until the later of 30 days from the notice or six months from the date of death.
If this time has elapsed and the executor does not have notice of any claims, they can distribute the funds to the beneficiaries and avoid personal liability.
Where there is potential for a claim, it may still be wise to hold off distributing the estate at that time, particularly if there are a large number of beneficiaries. An eligible person generally has a year to bring a claim against an estate from the date of death.
While you will personally be protected from liability if you have taken the above steps, if a successful claim is made after this, the beneficiaries could be required to pay money back into the estate to satisfy the claim. This can lead to awkward situations between beneficiaries if one has already spent their share of the inheritance.
While not distributing funds immediately they are available may lead to a few disgruntled beneficiaries, it is undoubtedly better to hold off until you know what is going to happen.
It is prudent to tell the beneficiaries to hold off on making any financial commitments from their inheritance until the estate has been finalised.