LSB July 2018_Web

FROM THE CONDUCT COMMISSIONER
An executor’s obligation
to provide information
to beneficiaries
GREG MAY, LEGAL PROFESSION CONDUCT COMMISSIONER
My office receives a large number
of complaints involving deceased
estates. There are many reasons for them.
In my article in the August, 2015 Bulletin,
I dealt with a lawyer’s role in determining
the testamentary capacity of a client before
preparing his or her Will. In my article in
the December, 2015 Bulletin, I raised some
issues to consider if the lawyer preparing
the Will is to be included in the Will either
as an (or sole) executor or as a beneficiary.
And, as is the case in every area of practice,
overcharging is commonly complained
about.
However, it is probably fair to say that
a majority of complaints relating to
deceased estates are made by a beneficiary
who simply has been kept in the dark
about the progress of the administration
of the estate, either by the executor or
the lawyer acting for the executor. The
beneficiary may have not received any
information about the assets comprising
the estate, or the beneficiary’s likely share
of it – but usually it arises because the
beneficiary simply has no idea why the
administration of the estate is taking so
long, particularly if a grant of probate
is required or there is litigation involved.
And often it is the case that a beneficiary
is not adequately informed because there
has been a family falling out – and the
executor decides not to tell his or her
siblings anything!
20 THE BULLETIN July 2018
There is no doubt that a beneficiary of
an estate has a right to certain information
about the estate (e.g. copy of the Will,
financial statements, details of assets,
details of legal fees). The duty to keep
proper accounts and records, and to allow
the beneficiaries to see those accounts and
records, can be described as follows:
“It stands to reason that personal
representatives are obliged . . . to maintain
proper accounts and records and to allow
requesting beneficiaries to inspect those accounts
and any supporting documentation, and to do so
willingly rather than reluctantly.
But it is not absolute in the sense that a
beneficiary is entitled to information beyond
that which relates to his or her interest in the
estate.” 1
Section 84B of the Trustee Act also
provides that a trustee must:
• “keep such records relating to his
administration of the trust property as may be
prescribed”; and
• produce those records for inspection by
(amongst others) a beneficiary under the
trust if requested to do so.
There is then a long list of prescribed
records in regulation 5 of the Trustee
Regulations.
There are probably two scenarios that we
need to consider from a conduct point of
view. The more common one giving rise
The more common one giving rise to complaints is
where a family member is the executor, and his or
her siblings are beneficiaries. The other is where a
lawyer is the executor.
to complaints is where a family member
is the executor, and his or her siblings are
beneficiaries. The other is where a lawyer
is the executor.
The second scenario, where the lawyer
is the executor, is pretty straightforward.
As executor, the lawyer should of course
comply with his or her obligations and
provide relevant information to all of the
beneficiaries of the estate. The lawyer
needs to treat all beneficiaries equally in
that regard. In my view, and particularly
if there is disharmony between the
beneficiaries, the lawyer should go “above
and beyond” in keeping the beneficiaries
informed as to progress with the estate’s
administration. That should include
an initial estimate of the likely timeline
involved in the administration. If
the lawyer doesn’t do all of that, then
there may be a question as to whether
that conduct falls short of the relevant
standard of a reasonably competent legal
practitioner.
The more difficult scenario is the
first one, where a family member is the
executor. If there has been a family falling
out, then it may well be that the executor
has no desire to contact the non-executor
beneficiaries at all – whether to provide
information to them or otherwise. What
is the lawyer acting for the executor
supposed to do in that situation?
It seems to me that the lawyer must
provide appropriate advice to the
executor about his or her obligations of
disclosure to, and fair dealing with, the
other beneficiaries. That should include
advice as to the executor’s fiduciary
duties to the beneficiaries, the obligation
to keep records and to allow requesting
beneficiaries to inspect them, and his