Resulting Trusts – Protect Yourself
Yesterday I alluded to the risks posed by resulting trust situations. Here’s some ways to manage, if not eliminate, that risk:
1. Send early letters to the financial institutions with whom a deceased held accounts and investments confirming that all jointly-held assets must be disclosed and frozen pending the results of the executor’s inquiries.
2. Verify which joint assets are uncontroversial with the beneficiaries in that the deceased clearly intended to go to the joint account holder and facilitate that process.
3. For disputed joint assets where beneficiaries and creditors do not want the executor to claim, get releases from everyone with a financial interest in the Estate. Consider including language saying the Releasor has been made aware of the potential expenses, risks and delays which could result from litigation to recover the resulting trust assets, and in order to avoid those pitfalls and hasten the winding up of the estate the beneficiary wants the executor to forego that litigation. Independent Legal Advice for the Releasor would add another layer of protection.
4. Without unanimous releases, proceedings to recover apparent resulting trust assets by the executor should be strongly considered. Keep a litigation holdback large enough to cover potential fees, disbursements and GST all the way to trial, of both sides.
5. Consider passing accounts, on notice to all those with a financial interest in the Estate that the executor will be relying on the original assets list as evidence that no claims against joint account holders have been left out. If the beneficiaries do not object, the executor can argue they are barred from complaining by the Judgment passing accounts.
Nothing guarantees full protection, but these steps should at least help.
Thanks for reading.