Acting as an executor is an honour — but it is also a serious legal responsibility. Many individuals agree to act as executor without fully understanding the personal risk involved. In British Columbia, executors can be held personally liable if they make certain mistakes during the estate administration process.
At Westcoast Wills & Estates, our estate administration lawyers regularly assist executors across British Columbia who are navigating probate and estate administration. Understanding when executors can become personally liable is essential to protecting yourself and properly administering an estate.
What Does an Executor Do?
An executor is responsible for administering the estate of a deceased person in accordance with their will and British Columbia law. This includes gathering assets, applying for probate if required, paying debts and taxes, and distributing the estate to beneficiaries.
Executors owe fiduciary duties to the beneficiaries. This means they must act honestly, in good faith, and in the best interests of the estate. They must also exercise reasonable care and diligence when handling estate assets.
When an executor fails to meet these legal obligations, personal liability can arise.
What Does “Personal Liability” Mean?
Personal liability means the executor may be required to pay out of their own pocket for losses caused by their actions or inaction.
Executors are not automatically liable simply because they accept the role. However, they can become personally responsible if they breach their duties, distribute assets improperly, or fail to follow the requirements set out under the Wills, Estates and Succession Act (WESA) in British Columbia.
Common Situations Where Executors May Be Personally Liable
Distributing the Estate Too Early
One of the most common mistakes executors make is distributing estate assets before all debts, taxes, and potential claims are resolved.
If an executor distributes funds to beneficiaries and later discovers outstanding debts or taxes, they may be personally responsible for covering those amounts. This is especially risky if the beneficiaries have already spent their inheritance and cannot repay the estate.
In British Columbia, executors must also consider potential wills variation claims from spouses and children. Distributing assets before the limitation period has expired can expose an executor to personal liability.
Failing to Pay Estate Debts and Taxes
Executors are responsible for ensuring that all legitimate debts of the deceased are paid, including income taxes. This includes filing the deceased’s final tax return and obtaining clearance from the Canada Revenue Agency.
If an executor distributes the estate without ensuring taxes are paid, the CRA can pursue the executor personally for unpaid amounts. This is one of the most serious areas of risk for executors.
Improper Investment or Mismanagement of Estate Assets
Executors must safeguard estate assets and manage them prudently. This includes maintaining insurance on property, securing vacant homes, and investing estate funds appropriately while the estate is being administered.
If an executor allows property to deteriorate, fails to insure assets, or makes risky investment decisions that cause loss, beneficiaries may seek compensation directly from the executor.
Conflicts of Interest or Self-Dealing
Executors must avoid conflicts of interest. They cannot use estate assets for personal benefit unless the will clearly authorizes it or all beneficiaries provide informed consent.
Using estate funds improperly, purchasing estate property at an undervalued price without proper disclosure, or favouring one beneficiary over another can result in court intervention and personal financial consequences.
Failing to Keep Proper Records
Executors are required to keep detailed records of all transactions involving the estate. Beneficiaries are entitled to a full accounting.
If an executor cannot properly account for estate funds, they may be presumed responsible for any missing amounts. Inadequate record-keeping is a surprisingly common reason executors face legal disputes.
Ignoring Court Orders or Legal Obligations
If the estate becomes involved in litigation, such as a wills variation claim or creditor action, the executor must comply with court directions.
Failing to follow legal advice, ignoring procedural requirements, or acting outside the scope of authority granted by the court can expose an executor to personal liability.
Are Executors Personally Liable for Honest Mistakes?
Not every mistake results in personal liability. Courts recognize that executors are often family members, not professionals.
If an executor acts honestly, reasonably, and in good faith, the court may provide protection. However, negligence, carelessness, or acting outside legal authority can remove that protection.
Seeking legal advice early in the process significantly reduces the risk of personal exposure.
How Executors Can Protect Themselves
Executors in British Columbia can take several steps to minimize personal risk. Obtaining legal advice before distributing the estate is one of the most important protective measures. Waiting until all debts, taxes, and limitation periods have expired before making distributions is critical.
Applying for probate where required provides court confirmation of the executor’s authority and offers procedural safeguards. Maintaining clear, organized records of every transaction protects against later disputes.
In some cases, executors may also obtain indemnities from beneficiaries or apply to the court for directions if uncertain about how to proceed.
When Should an Executor Speak to a Lawyer?
If you are unsure about your obligations, facing pressure from beneficiaries to distribute funds quickly, dealing with estate debt or tax concerns, or responding to a potential wills variation claim, it is advisable to seek legal guidance.
Estate administration in British Columbia is governed by strict legal requirements. Acting without proper advice can unintentionally expose you to personal financial risk.
At Westcoast Wills & Estates, our estate administration lawyers assist executors across North Vancouver, Vancouver, Burnaby, Surrey, Richmond and surrounding communities. We guide executors through probate, creditor issues, tax considerations, and beneficiary disputes to ensure the estate is administered properly and personal liability is avoided.
If you have been named as an executor and have questions about your responsibilities, contact our office to schedule a consultation. Early advice can provide clarity, reduce stress, and protect you from unnecessary risk.
