An insurance policy for executors can protect both the executor from personal liability, as well as the estate assets, which may be liquidated to fund any sort of estate litigation.
What happens when you, the lawyer, fail to secure title insurance on a real estate transaction when instructed to do so? A recent article in The Lawyer’s Weekly suggests that the lawyer becomes responsible for everything the policy would’ve covered even if the range of insurance protection exceeds the normal standard of practice within the “opinion on title” context.
Next, how about the estate solicitor failing to speak to the availability of executor insurance during the estate administration discussions? When the litigation commences, is it reasonable for the executor or the beneficiaries to look to the estate solicitor for the full scope of protection that would be available from an executor insurance policy (including defense costs, indemnity, and posting of bonds, etc. during litigation) as a result of the lawyer not bringing it to their attention in time to purchase it?
As a lawyer, are you concerned that the matter is important, but uncomfortable with a detailed insurance discussion? Give your client an ERAssure® brochure and refer them to ERAssure® or their insurance broker – and document your file accordingly. It’s a good opportunity to stay in the advice business but out of the insurance claims business.
In estates, there has often been a perceived unfairness that a lay executor must assume various burdens without the benefit of insurance coverage.
Let’s face it – people are living longer today, but all boaters meet their maker sooner or later. Have you ever considered what happens when you appoint a relative or trusted family friend to manage the administration of your estate as an estate trustee or executor? Very few people that make a will understand the significant obligations they are asking their executor to assume, and even fewer understand the personal risks that accompany acting as an executor for a friend or relative.
The role of executor is a personal engagement that carries a very high level of responsibility to the beneficiaries, creditors, and third parties to the estate of the person that has passed away. They are legally required to perform at a very high level of skill in order to protect the interests of the beneficiaries and creditors of the estate – typically to a much higher standard than most people conduct their own personal affairs. (more…)
Negligence by an executor, even if mistakes are innocent, can render that person liable to beneficiaries and creditors of an estate.
Serving as the executor of an estate is a challenging responsibility that can be fraught with liability. (more…)
When dealing with an estate that may become contentious due to family tensions or complex assets, it may be worth considering executor insurance.
Dad and Mike owned adjacent cottages on a private laneway that allowed specific rights of way to the properties on the laneway. Mike’s right of way allowed him to cross the properties of two neighbors to the south in order to reach a paved highway five minutes away. But although the cottages were side-by-side, his Dad’s right of way went north, and to reach the same paved highway he was required to travel about twenty minutes over, at best, poorly maintained laneways and sideroads.
The right of way had been the subject of litigation between the neighbors over the years to determine and enforce the rules – mainly to prevent Mike’s father, his cottage guests and service contractors from crossing land to which he was not granted a right of way.
I read a great article this week in The Lawyer’s Weekly. Good food for thought.
This is an interesting commentary on a new social dynamic – separation and divorce among people in their 60’s, 70’s and 80’s – and it has some interesting aspects for executors that handle estates for these people.
Estates law is perhaps the most complex area of law; it can involve not only trust and estates, but tax, business, real estate, securities and family law practice areas, to name a few. Estate administration is a complex task for Executors and Estate Trustees, and one that is best performed with of good legal advice.
Obtaining and following competent legal advice will reduce the chance of being sued as an Executor. But what happens when you’ve obtained and followed your lawyer’s advice, and a beneficiary or a creditor brings forth a legal action against you, as executor, arising out of your negligence in the administration of the estate? It’s a question most people do not consider when investing in professional advice to keep them out of trouble.