It can be difficult to find an executor or trustee when undertaking estate planning. Some people might not want to accept such a significant responsibility, while others may not feel they are qualified to do so. Typically, people want someone with some degree of financial expertise to take on the role due to the impact it can have on the value of the estate. But a Toronto mutual fund representative recently landed in hot water after accepting executor and trustee appointments inappropriately.
Accepting appointments
The story was reported on Advisor’s Edge, a magazine targeted towards financial advisors. The story revolves around a mutual fund representative who was employed by an investment company from 2002 to 2016. During this time he allowed two of his clients to name him as a co-executor/trustee for their estates. The clients died in 2011, and he started acting as their estates’ executor at this time. Doing so was contrary to the rules of the Mutual Fund Dealers Association (MFDA). In one of the estates, he was serving as the only executor following the death of the other co-executor.
Further complicating things for the advisor was that he was also a beneficiary of one of the estates. While the gift to him was low (3,045 air miles valued at less than $500) he was still not supposed to accept it under the rules of the MDFA.
Consequences
The article states that the complaint had come in via an anonymous tip. While an investigation was launched, the advisor had initially been uncooperative. Eventually he entered into a settlement with the MDFA which saw him pay a financial penalty of $40,000, but more severely also resulted in a lifetime band from the association.
While the story contains an obvious lesson for financial advisors, there’s also a lesson to be learned for people who are writing their wills and planning for what happens with their estate upon their death. Appointing someone who is ineligible to be an executor or trustee can lead to estate litigation or other delays which has both time and cost implications for the estate and its beneficiaries.
If you find yourself in a situation where you think an estate trustee or executor appointment should be disputed, you should obtain advice from an experienced estate lawyer. These matters can be complicated. The team at Derfel Estate Law prides ourselves in providing our clients with highly personalized and responsive services. Contact us to speak with an estates lawyer who will guide you through your trust dispute and work to achieve the best possible resolution to your trust matter. Call us at 416-847-3580 or contact us online to schedule a consultation.