A Case Study From Smartwills.ca – Nominate an Alternative Executor
As a matter of course, we encourage our Clients to nominate an Alternative Executor in their Wills (and or alternative Attorneys in their Powers of Attorney). I wish I had the creativity to concoct all the various ramifications of not doing so, but here is an actual case with disastrous results.
A woman makes a Will; nominates her trusted financial advisor at Edward Jones to be her executor. No Alternative Executor is identified in her Will. She dies right before the closing of her Purchase Agreement to buy some real estate in Ontario. Without knowing, Edward Jones’ has a strict policy in place that their representatives cannot be Estate Trustees for their clients. The woman has two children (never named as alternative Trustees) as each is viewed as incompetent (for mental reasons) and is not named (as Alternatives) in her Will.
What does one do? The Edward Jones Representative renounces as a result of their head office policy and now you have no Estate Trustee for this Will. Remember life gets complicated without this identified resource with a backup in your Will; you can forget about applying for Probate and that can usually take at minimum 3 months, as you have no Executor, but you do have an Estate that needs to be taken care of.
The challenge here was who can close the real estate deal. The kids can’t take this on; they are not emotionally or financially able. The financial planner cannot. A friend steps up to the plate to help but we have a deal in limbo as all the parties try and figure out who is on first!
This, to be sure, is a factual conundrum we had a week ago. The question we ask is why this woman was ever permitted to make a Will without a fallback position. Perhaps she did it online, or without counsel, or she just had poor legal advice. But right now, the deceased person has a real estate deal with a liability; if she fails to close on her house purchase her Estate will ultimately pay. It is simply poor planning.
It seems so simple looking back, but remember you need a fallback position with your Executor for your Will and Powers of Attorney. For some, this may be a challenge as we may only have older siblings and friends and they may not outlive us, but it is important to find that third-party neutral person to help you out.
The message I leave you with is “Always think of “What if?”. We do at Smartwills, and you should too.
Read this month’s blog post, Christmas A Recipe For Disaster
Ministry of Attorney General on Estates, Wills & Trusts
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.