The Executor’s Year

March 22, 2017 Suzana Popovic-Montag Executors and Trustees, Trustees Tags: , , 0 Comments

The “Executor’s Year” is a common law rule that gives estate trustees one year to administer the estate before beneficiaries have a legal entitlement to demand payment. In general, interest on a legacy will be payable to a beneficiary with calculation commencing one year after the testator’s death or after obtaining the certificate of appointment of estate trustee, where applicable, unless otherwise specified in the will. There is nothing in the rule that prevents the estate trustee from making an earlier distribution. If the year has passed and the estate trustee has not made satisfactory progress with the administration of the estate, the beneficiaries may be entitled to take action for unnecessary delay.

The executor’s year is commonly referred to as a “rule of thumb” or an informal rule, because of its flexibility. The rule assumes the estate in question is relatively simple. In fact, many estates take longer than one year to be fully administered. Applying for a Clearance Certificate from the Canada Revenue Agency will often extend the time before final distribution, as it can take months to receive the Clearance Certificate.

The executor’s year was recently considered by the Supreme Court of Prince Edward Island in Cornish Estate, Re. In this case, the executor did not administer the estate in a timely manner, but the court found this was because of the high degree of conflict between the beneficiaries of the estate. The court declined to penalize the executor, even though she was well beyond the one year guideline in winding up the estate. The court held: “The Executor’s Year is still the proper benchmark, but it assumes only normal difficulties, and certainly no outright rebellion or action against the Executor by a sibling or siblings who raise and attempt to enforce baseless claims not mentioned in the Will, as appears to have happened in this case.”

Thank you for reading.

Suzana Popovic-Montag

Other articles you might enjoy:

Trustees, Estate Trustees, and Administratrices – A Disambiguation

Protecting a Trustee from Liability

Simplified Section 116 Clearance Certificate Procedures

 

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