Choosing to be an executor is a serious commitment that, if done improperly, can lead to severe consequences.
An executor is responsible for administering a person’s estate. They gather the assets, pay the debts, file taxes, and distribute the rest to the beneficiaries. It appears simple enough; however, an executor is a “fiduciary” which means they are measured against a higher standard when carrying out the above duties. The fiduciary duty is one of “utmost good faith”.
The executor must administer the estate in the best interests of the beneficiaries. While doing so, the executor must keep his or her personal interests separate and ensure that his or her personal interests do not conflict with those of the beneficiaries. If an executor acts contrary to his or her fiduciary duty, the executor may be sanctioned.
Executors are subject to various laws and standards and if they breach their trust obligations, there can be serious consequences. For example, in the case of R. v. Singleton, an executor (who was also a lawyer) was required to pay restitution and sentenced to 3 years imprisonment for theft and fraud in relation to his misappropriation of nearly half a million dollars from an estate.
The total value of the estate in that case was just over one million dollars, from which certain bequests and payments were made by Marvin Singleton in accordance with Mr. George’s will. There was a shortfall of nearly $500,000. Mr. Singleton said that he invested estate funds poorly. The Crown successfully argued that Mr. Singleton committed fraud and violated his legal responsibility as an executor and trustee of the estate of a client by taking the funds entrusted to him and using them for his own purposes. The Court agreed that Mr. Singleton did not simply invest the funds poorly – he took them for himself.
This level of abuse in the position of executor is not common, and the Court here has sent a message that it is not acceptable. Theft by someone who is a “fiduciary” such as an executor often carries greater penalties than had the same amount be stolen by someone who was not a fiduciary.
The more common scenario for a breach of fiduciary duty to occur is where an executor is unfamiliar with the duties of that role and makes mistakes that may result in significant consequences. Accordingly, when considering whether to accept the role of executor, it is necessary to do your research and determine whether you can respect the duties and responsibilities of acting as a fiduciary.