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When A Deceased’s Assets Go Missing: What Can Be Done?

When a deceased’s assets go missing: what can be done?

The executor of a will has a handful of responsibilities when administering an estate – this includes accounting for all estate assets, debts, and exchanges of funds coming into and out of the estate. When the executor is ready to distribute the estate to the beneficiaries, under BC’s Trustee Act, they are required to provide a comprehensive, accurate account of everything that went into and out of the estate to the beneficiaries. This account information must include:

  1. What the original estate was;
  2. All the assets received by the estate; and
  3. All the assets remaining to be distributed.

Beneficiaries are entitled to this information and have a legal right to request this information at any time during the estate administration process.

Missing Asset from the Estate

If an executor cannot account for an asset, they can, in some cases, be ordered to pay for this out-of-pocket.

Sometimes, an estate inheritance can change a beneficiary’s life significantly, and it can be extremely stressful when the executor is not managing the estate as one would expect. Unfortunately, some executors have been found to be guilty of attempting fraud and theft by taking pieces of an estate and not accounting for them. In other cases, estate assets simply go missing because of the executor’s inattention to detail or carelessness. It’s important that beneficiaries proceed with caution in agreeing to the accounting details’ terms, ensuring that all the estate assets are correctly accounted for. While beneficiaries might feel helpless during the estate administration process, they do have rights which they can exercise to protect their interests. If a beneficiary is suspicious of the account, or suspects that an asset has gone missing, they should take action by forcing the executor to prove the accounts before the courts.

Passing of Accounts – Proving the Account’s Accuracy

When a beneficiary does not agree with the accounts provided by the executor, the beneficiary can formally challenge the accounts to have their case heard before the courts – this is called a passing of accounts. A passing of accounts is a court hearing where the courts will review the account to determine if the challenge is reasonable or not. The courts will go over the point of contention to determine if anything “went missing” or was miscalculated. In most cases, the courts will need to review the entire account and all the transactions involved. If the executor was not diligent with their record keeping throughout the estate administration process, tracking all assets and transactions, it can be difficult to prove the account is accurate.

As described in the case of the Estate of Fannie Cleverley (2000), the purpose of the passing of accounts is to “determine whether the executor has exercised his duties under the will properly and in accordance with the law.”

Tracing the Missing Asset

Sometimes, the claimant proves in the passing of accounts that an estate’s asset has gone missing, even though the executor is not in possession of the missing asset. The asset must then be traced in order to recover it from whoever has the asset. The person who is in possession of the missing asset will be ordered to return the asset to the estate where it will then be distributed as detailed in the will.

An example of this could be an executor who attempts to steal a car from the estate of the testator. The executor doesn’t account for the car, hoping that no one would notice in the accounting report. A beneficiary who was entitled to inherit the car starts a passing of accounts, claiming that the car has gone missing. The executor fails the passing of accounts and must return the car to the estate, but, the executor already gave the car to a friend as a gift. The friend who is in possession of the car will be ordered by the courts to give up the car and return it to the estate. The beneficiary would then receive the car.

Beneficiaries may not have a lot of control over the estate administration process, however, there are options available to them to ensure that the process is done correctly. If you’re a beneficiary who is suspicious that the executor may have stolen an asset from the estate, contact an experienced estate lawyer today. We can ensure that the estate is administered appropriately and the beneficiaries are given their fair share of the estate.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.

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