Do you know what your obligations are as an appointed personal representative?
Have you been appointed the personal representative of an estate? Do you know what your obligations are? Do you know that you can be held personally liable if you do not administer the estate properly?
If you have been appointed to administer someone else’s property, this gives rise to greater legal responsibilities than when you manage your own property. As a personal representative, you are a fiduciary, which means that you must act honestly and in good faith, and use the care, diligence and skill that a person of ordinary prudence would exercise when managing another person’s property. You are free to deal with your own assets in any way you wish. If you make an error, you have only yourself to answer to. As a personal representative, if the estate suffers a loss, you may be personally liable to the beneficiaries of the estate.
A grant of probate or administration is not required in every circumstance, however sometimes it may be prudent to obtain one to protect yourself as the personal representative of an estate. The Estate Administration Act sets out steps required to be taken by a personal representative when an application for a grant will not be made. A personal representative named in the will who does not apply for a grant must provide notices to beneficiaries, “family members”, or the Public Trustee, where applicable. A “family member” under the Wills and Succession Act includes:
- a spouse;
- adult interdependent partner;
- minor children;
- a child of the deceased who is at least 18 years of age at the time of the deceased’s death and unable to earn a livelihood by reason of mental or physical disability;
- a child under the age of 22 who is a full time student;
- a grandchild or great-grandchild if the deceased person stood in the place of a parent.
A “family member” has the right to make an application to the court for a greater share of the estate. A “family member” has six months from the date of the issuance of the grant of probate in which to commence this application in the court. If no grant is obtained, the limitation does not begin to run. If you distribute any portion of the estate prior to the six month limitation from the issuance of the grant and a “family member” later makes a successful application, you can be personally liable to pay an amount equal to any maintenance and support that may be payable.
For example, assume that you are the executor named in your brother John’s will. John and Jane are on their second marriage. John dies and has two children from his former marriage, Ann aged 28 and Beth aged 25. John was estranged from his children and as a result neither of his children are beneficiaries under his will. Beth suffered from a significant brain injury in a car accident 2 years ago and is unable to work. John’s assets consist of shares in a private company worth $5 million. The will leaves the entire estate to the spouse, Jane. As the only asset of the estate is the private company, you take steps to transfer the company solely into Jane’s name without applying for a grant of probate. Beth would be considered a “family member” under the Wills and Succession Act and has the right to make an application to the court for a greater share of John’s estate. If you do not probate the will and therefore do not serve Beth a notice, you can be held personally liable for transferring the company without providing notice to Beth. In this situation, if you would have applied for a grant of probate you would have started the 6 month limitation for Beth to commence her action and avoid any personal liability. This is why it is important to obtain legal advice when administering an estate and we are here to help you.
Are you a Beneficiary of an Estate? We can help.
Are you a beneficiary under a will or an intestate, and have not heard from the personal representative? Do you want a copy of the will and have not been provided with one? Do you want an update on the administration of the estate and the personal representative is not communicating with you? We can help.
The Estate Administration Act recognizes that many estates will be administered without obtaining a grant from the court. It ensures that personal representatives acting without a grant are subject to all the same roles and responsibilities as those that apply when a grant is issued.
Under the new Estate Administration Act if a personal representative refuses or fails to provide the required notice or perform a duty or core task, a person can bring an application to the court to obtain an order to require the personal representative to comply with their duties, impose conditions on the personal representative, or have the personal representative removed. We can assist you in obtaining this information and in making an application to the court. Contact us today.
This article is intended to give general information only. We recommend you contact a lawyer for specific legal advice.