At my law office in Stittsville (Ottawa), the executors I meet with often have questions about how to deal with advancements or loans given by the deceased during his or her lifetime.
Here is an example:
An executor is preparing to distribute an estate totally $850,000 after debts and liabilities are paid. The deceased, Bernice, had three daughters who, according to Bernice’s Will, are to share the estate equally. However, her Will included a clause confirming that Bernice had advanced $50,000 to one daughter during her lifetime and that this amount was to be deducted from the daughter’s share of Bernice’s estate.
How does the executor calculate what each daughter is to receive?
Add the $50,000 advancement to the total value of the estate:
$850,000 + $50,000 = $900,000
Divide the total by 3: $900,000 / 3 = $300,000
Each daughter is entitled to $300,000; however, the daughter who received the $50,000 advancement receives $250,000 from the estate as she already has the $50,000 which her mother gave her.
If you are acting as an executor and the deceased made a loan or advancement during his or her lifetime which must be accounted for, don’t delay in making an appointment to meet with one of our lawyers. It is vitally important that such loans or advancements are properly dealt with and accounted for prior to the distribution of the estate.
Reproduction of this blog is permitted if the author is credited. If you have questions or if you would like more information, please call us at 613 836-9915. This blog is not intended to be legal advice but contains general information. Please consult a lawyer or other professional to determine how the information in this blog might apply to you.
Blog posts pre-dated December 1, 2015 were originally published under Neff Law Office Professional Corporation.
