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Tom B.
Tom B., Barrister & Solicitor
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Experience:  23 years in practice
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in ontario. i am an executor and a beneficiary. if one of

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in ontario. i am an executor and a beneficiary. if one of the beneficiaries has stated in writing s/he wants either the property sold or the other beneficiaries purchase it. if an offer is made to this beneficiary for their share of the property and they do not agree with the price with 2 market evaluations after expenses are deducted. What is their and our recourse?
Submitted: 4 years ago.
Category: Canada Law
Expert:  Tom B. replied 4 years ago.
If the beneficiary has the benefit of two market evaluations that were actually done by a licensed appraiser, (as opposed to just a real estate agent) that person should consider selling. An average of the two reports is probably market.

Otherwise, any of the owners can apply to court to have the tenancies severed and the property sold. If she wants to test the market, then a public sale is the way to do it. However, without the agreement of the others, one owner has to make an application to court which is going to add a few thousands of dollars to the cost of the sale.

The courts will seldom force an owner who wants out to remain on title. The court will order a sale and appoint one or more people to have conduct of the sale. If an offer comes in and there is no agreement between the owners to accept, then another application must be made to have the court approve the sale or not.

Although such applications can be made in a reasonable amount of time, it is a negative to have to place on an agreement for sale that the sale is subject to court approval. It may have an effect on the price offered.

If most want to keep the property, then the procedure is the same but only one share is up for sale. The remaining owners can purchase that part but run the risk of a stranger making a better offer.

The cleanest way is to sell as between the owners from a business point of view. But, if that is not going to happen, the courts are there to decide things for people. Below is a link to the statute involved.

Regards,
Tom

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90p04_e.htm
Customer: replied 4 years ago.

as an executor and beneficiary, if the house is on the market can i still purchase it with no recourse ?

Expert:  Tom B. replied 4 years ago.
There are many executors who are also beneficiaries. As an executor, you are in a position of high trust and liable if you do not execute your duties properly. You must follow the Will and distribute accordingly and account to the court and to the other beneficiaries. It is crucial that this job be done well and by the book. You are a trustee that is being paid to be honest and trustworthy.

Upon each getting their share, the property has passed to the beneficiaries for them to do what ever they desire. That was the whole point of the testator giving things away so that the people who received would benefit.

Once you have done your job properly, this is just a real estate deal.

Use the "tummy test". If you have an uneasy feeling that you may have not given a beneficiary their proper due or may have not acted in complete compliance, then take a second look at your actions and procedures.

However, if all got what was promised and you complied with your duties as a trustee and took no personal advantage in that role, all beneficiaries can buy and sell whatever they chose to.

If you leave no room for complaint from another beneficiary that you used your role for a personal gain at their expense, no issues will arise.

Customer: replied 4 years ago.

this situation, there are 3 siblings, 2 live in the house. the will is not yet probated and when it is the sibling that does not live in the house stated either house be sold or one or both of other siblings purchase the home. the intent is to take appropriate steps to buy out the sibling not living in the house. my main question is if this sibling is difficult and feels her share is not adequate based on proper evaluations etc..... her recourse can be to arbitrate or force sale? if this is so, is her sole expense to pursue?

or does the executor have to comply to the one third when 2 thirds want to buy not sell?

Expert:  Tom B. replied 4 years ago.
Your job is just to probate and to transfer the property as dictated in the will. Before or after you complete your task, it is open to the siblings to negotiate and come to an agreement. They can arbitrate or mediate or whatever but as executor, you follow the directions in the will.

If no agreement has been reached, any of the siblings can go to court and force a sale. On all of the facts, a judge may decide to award court costs to the successful party.

So the one third can get out or the two thirds can force a sale and hope to be able to buy the one third.

A court will look at proper appraisals as strong evidence of the market value of the house. That is why the one third needs advice as to what is best. As executor, you follow your instructions in the will and do not deviate. Once the property is transferred then that job is over and as siblings, you can agree on any other division or sale.
Customer: replied 4 years ago.

what part are you not getting, I AM ONE OF THESE 3 SIBLINGS, ONE THAT LIVES IN THE HOUSE..

ARE U TELLING ME THE EXECUTOR ROLE IS MY ONLY ROLE AND I HAVE NO RIGHTS AS A BENEFICIARY????

Expert:  Tom B. replied 4 years ago.
I am sorry I am not being clear. I understand that you are one of the siblings. As such you have the right to receive the property that was given to you. STOP!

As executor, you have the TRUST and DUTY to make sure everyone gets what they have coming to them (including yourself) STOP.

Now, you are in a dispute over buying out another sibling. That has NOTHING to do with your duties as an executor. The executor follows the Will and if not, can be in serious trouble. A beneficiary, has the right to have the property transfered to that beneficiary. In this case, you have a duty to follow the will and a right to receive your share. Then, you can all fight in court if you want to as I have described.

You are in a potential conflict of interest and you need to seek legal counsel on how you are dealing with this estate. You can resign as executor and have the court appoint another one or you can ask the Public Trustee to be the executor. If you chose to remain, you have duties and responsibilities and no rights. An executor that attempts to manipulate for personal gain is in serious trouble.

Speaking to your role now as a beneficiary. No, you have no rights there either except to receive the property that has been given to you. Having said that, a beneficiary has rights as against the executor if that person does not fulfill his duties but here you are one and the same.

I got everything you were saying, I did not know you were in the house. This place is for general information only but sometimes some facts are important to an answer.

Being an executor is an honour in a way. The deceased trusts you to do what they want. But it brings huge responsibility. If there is going to be a scrap amongst beneficiaries, the executor must be clean. You are in conflict and cannot use your role as executor to resolve that.

Transfer the property to the siblings and get out of being the executor. Once that is over and you are discharged, the three of you can agree or fight as you will. Just make sure that you can account for every penny.

Cheers

Tom
Customer: replied 4 years ago.

i am not in conflict of anything as i have not done anything as of yet.... once the will is probated the titles do not go to the 3 beneficiaries, the will gets registered. this will give me as executor a certificate to either sell the property/pay off debts etc. which does not put me in serious trouble. however, how can you say i need to stay clean, what i am doing is not wrong.

what i am asking is that 2 of the 3 beneficiaries have decided to purchase the property (one being me). Are you saying I have to step down as executor in order to accomplish this?

All I am asking, is in the event the 3rd beneficiary who wants to be bought out by the way, does not agree on the price, being the same amount everyone is getting based with 2 house evaluations. this 3rd beneficiary may think the house is worth more, i am asking what recourse do the 2 beneficiaries have to settle this. it would not be fair to pay the third beneficiary more, would it?

should this be treated as a shotgun clause, if the 3rd does not agree on the price that the other 2 ask to be bought out or does this get legal. And if so, if the 3rd beneficiary decides to go to arbitration or court, who is liable for those costs, the estate or the 3rd beneficiary solely?

You keep responding to me that if i am being unfair... and that as a beneficiary/executor I have less rights to my share.

by the way we are in Ontario not BC. would you be able to provide answers to those specified questions???

 

Expert:  Tom B. replied 4 years ago.
I am not suggesting you are doing anything improper. I am just suggesting that when a possible dispute is looming, and you have two hats on, just take care that the executor hat takes priority.

No, you do not have to step down as executor to accomplish a sale. Many executors are also beneficiaries with no problems. But, here it sounds like the the third beneficiary is holding out for a higher price. She/he can do that. Your recourse is to meet her price (that may not be fair to you) or to get an order for sale. Absent an agreement between you, I am suggesting that this final recourse be taken after you have extinguished your duties as an executor. The estate should not incur expenses because the beneficiaries cannot agree on a price as between themselves. It is not an estate issue.

If you all agree to arbitration then you are agreeing to be bound by the decision of whomever you choose as the arbitrator. Going in, you can decide how you will split the costs or the arbitrator can decide just as a judge can. An arbitrator can award costs to the "successful" party or parties, or make no order for costs and then the three of you will share the costs of the arbitration plus you each pay your own legal fees. If you make a formal offer to the 3rd, and that person does not get anything better than the offer, that is a consideration for costs just like in court. That is as close to a shot gun clause as you can get. Take this offer or risk paying costs to try and get more.

But yes, you can enter into an agreement whereby the 3rd either accepts your offer or buys you out at the same price. But, that requires the agreement of the 3rd. It would be a great term to place in a formal offer of settlement however to put pressure on the 3rd and a chance to recover costs.

The estate should not be involved in a dispute between three owners over the price of what they own. Otherwise, you cannot tell who is liable for the costs until the arbitrator or court tells you.

You have equal rights to your share. That is not going away. As an executor, you cannot be unfair because you are just following your instructions in the Will. Once you have executed that duty as required, then you can be as unfair as you desire. Then, it is just business.

I have been attempting to separate the executor from the beneficiary and perhaps not well. Keep the two positions clearly divided in your own mind. You first have to deliver the property to everyone including yourself as required by law. Then, you have a business issue that is going to be resolved through negotiation, arbitration or a law suit.

The 3rd needs legal advice. If the 3rd thinks the property is worth more, step up with a third appraisal but not just argument. The 3rd risks not seeing anything for a long while any way this goes and perhaps legal costs against her never mind the unnecessary sibling scrap. It is what it is. Things can be professionally valued and no judge has the time to further investigate.

If I was advising the 3rd, I would want to know how much more than already offered is the price to settle. Then, I would tell that person to bring me evidence of the higher value. Then, I would want my retainer and I suspect the potential client would leave at that point.

You have every right to your share regardless. Just make sure you are the best executor and get out of that role when you can. I am sorry for my unclarity but I found your question of interest and tried for you.

Tom

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