Q. I received an inheritance and am supposed to get a fixed amount of money. The people who got the majority of the money (non-fixed) are fighting/bickering/litigating with each other. These people are the executors. The deceased has been rolling in the grave for over a year now! My question: Where is the liquidated money? Do lawyers invest it in rolling 30-day government t-bills at 1%?
Also, who receives the interest income generated on my fixed gift while the fight rolls on? Do the lawyers keep it? Does any interest generated go into the non-fixed pot (and ultimately the people fighting?). I know it doesn’t go to me.
– Frustrated, Miguel
A. Miguel, you are waiting for a gift of a fixed amount under a will. You mentioned an estate lawsuit but did not specify if the will is contested. This makes a difference if, and when, you get your money.
If the will has been certified by a court, then you may expect interest on your cash bequest. You did not specify the size of your gift. Interest on a $3,000 bequest would be nominal. Interest on a gift of $30,000 perhaps not. The amount of interest paid depends on what province you live in. The interest rate may be fixed by a statute, regulation or by court decisions.
Estate executors normally pay creditors and distribute bequests within a year of death. Interest should be paid by the estate to you if payment is late. One recent Ontario court decision suggests executors must pay interest on bequests after the executor’s year. However, this is not common practice.
Executors must pay creditors before bequests. In most estates, the largest bill is income tax. If income tax is owing, there may not be cash to pay you. This may explain why your gift is not paid yet.
If the will or ownership of estate assets are disputed, then your gift may not be guaranteed. Courts can declare wills invalid, and thus cancel your gift. You may need to participate in any legal proceedings to protect your gift.
Ed Olkovich is a Toronto lawyer and certified specialist in Estate and Trusts Law