Administering an estate can be difficult and bring about many questions.
Keep reading to learn the answers to the top seven questions Canadians have asked ERAssure
about their estates over the past five years.
Top Estate Planning Questions From Canadians
Q. What do “estate” and “executor” mean?
The executor is the personal representative of the deceased person and has essentially the
same rights, duties and obligations that the deceased person had while they were alive .
The executor is able to sue other parties, and is the individual that is sued by other parties in
respect to issues related to the estate. This may come as a surprise to family members who
thought the “estate” is a specific legal entity.
Q: I have a lawyer — does his or her insurance cover the estate?
The lawyer’s’ professional insurance covers the lawyer for errors made in the practice of law,
but does not cover the executor of the estate.
Q. Can an ex-spouse have a claim on the estate even though they were not named in the
will?
Given the frequent nature of divorce and remarriage, family law issues that may frustrate the
efforts of the executor trying to settle the affairs of the estate are not unusual.
Family law issues involve some tension. Lawsuits arising out of the executor or estate not
recognizing or providing for obligations under Family Law are not uncommon.
Q. What happens if the estate gets sued after the estate is distributed to the
beneficiaries?
There are statutory limitation periods that exist at law which represent dates after which no
claims may be brought against the estate. The limitation period may be as short as two years
from the last date of certain activities; in other cases, the window to sue remains open for much
longer. In order to claim protection under an applicable limitation period, the executor may be
required to pay a lawyer or claimant personally in order to defend or settle a claim. Ultimately,
some or all of the cost of defense may have to be “clawed back” from the beneficiaries.
claims may be brought against the estate. The limitation period may be as short as two years
from the last date of certain activities; in other cases, the window to sue remains open for much
longer. In order to claim protection under an applicable limitation period, the executor may be
required to pay a lawyer or claimant personally in order to defend or settle a claim. Ultimately,
some or all of the cost of defense may have to be “clawed back” from the beneficiaries.
Q. We are managing the financial investments and selling the real estate privately – do we
have a risk?
A growing number of people opt for “Do it Yourself” in an effort to reduce commissions related to
real estate or financial investments. DIY activities can cause the estate to lose some or all of the
statutory consumer protections which exist at law by using a licensed advisor or real estate
agent. This may mean that the estate is exposed to the legal liability risks that arise from these
activities – potentially expensive in the case of real estate sales.
Q. It looks like Dad made some serious investment mistakes and we think his estate may
be bankrupt. Should we be concerned?
Maybe not; there are established guidelines that the executor can follow to deal with a bankrupt
estate. One risk, however, is that there may be unsatisfied creditors that pursue the executor
after the estate has been distributed and the cost of defending yourself in such a case may be a
financial burden for the executor.
Q. Who pays when the estate gets sued?
Traditionally, it was acceptable to use the beneficiary’s’ money from the estate to defend and
pay for legal actions brought against the estate during administration.
Courts today are re-examining the traditional access to estate money in respect to lawsuits; they
may impose restrictions or prohibit the executor from using estate money to fund the cost of
litigation against the estate.
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If you’re looking for more answers about estate administration you can submit your question to ERAssure here.
You can also download other valuable estate resources from ERAssure such as the