A recent case from the Ontario court of appeal indicates why it is so incredibly important to think of all the circumstances when choosing an executor for your estate.
Antonio Di Michele was named executor of his mother’s will; the will left her house equally to Antonio and his two siblings. After her death, Antonio had the house transferred into his own name as executor, which is a fairly standard procedure. What happened next was far from standard.
Antonio was in the middle of litigation. In order to fund his legal costs and possible liability, he approached a company about a loan, with the house as security. The company registered a mortgage against the house and loaned Antonio the money. When Antonio lost the lawsuit, the company brought an order to sell the house in order to cover the cost of the loan.
After lengthy litigation, the Court of Appeal found that Antonio was actually the owner of the entire house, rather than an owner of one-third and trustee for the remaining two-thirds. The result: the lender was allowed the keep the house, and the siblings got none of their inheritance.
I’m sure that Antonio’s mother did not intend this result. I’m sure that Antonio did not intend this result. However, it does illustrate the need to very carefully choose both who is to manage your estate, and how it is to be managed.
You can read the case here.
