Funeral expenses: Why executors should pay them promptly

This article discusses the payment of funeral expenses out of an estate, and why executors should pay them promptly.

The first reason is practical. After death, the funeral home is often the first to provide a service to the estate. It disposes of the body in a safe and respectful manner. As such, the funeral home understandably expects to be paid. To pay this expense promptly will ensure the estate is not later sued for the invoice, and interest charges are not incurred. Moreover, it means there is one less expense for the executors to later deal with.

The second reason to pay promptly, is that the law prioritizes funeral expenses. Almost every will drawn by a lawyer, will include a clause directing the executor “to pay out of and charge to the capital of my general estate my just debts, and funeral and testamentary expenses.”

Thus, the will of a deceased usually expressly requires the estate to pay the funeral expenses. Thus, even in situations where is a dispute over which will is valid, it is very unlikely there will be a dispute over whether it was legitimate to pay funeral expenses. Again, it is simpler to pay those expenses, get them out of the way, and then move on to other issues (like which will is valid etc).

For an example of how the law prioritizes the payment of funeral expenses, we may look to the Alberta decision in Chernichan v. Chernichan Estate, 2001 CarswellAlta 1730, 2001 ABQB 913, [2001] A.J. No. 1429. There, the Court spoke of the “public interest in the prompt and dignified disposal of human remains”, and that the funeral costs should be paid promptly:

14      Where one party pays funeral expenses, he or she is generally able to recover them from any person who has a higher obligation to pay them, even if that person had no input into or even knowledge of the funeral: Schara Tzedeck v. Royal Trust Co. (1952), [1953] 1 S.C.R. 31 (S.C.C.) at p. 37. Funeral arrangements must usually be made in a very short period of time, sometimes before the personal representative is identified, and invariably before probate is issued. The family usually makes the arrangements without regard to who is in a technical sense legally responsible for either making the arrangements or paying the expenses. Because of the public interest in the prompt and dignified disposal of human remains, the law imposes a duty on those ultimately responsible to reimburse the person who actually incurs the obligation. The obligation to reimburse arises in restitution, not in contract, and is founded on considerations of necessity, unjust enrichment and public health: Goff and Jones, The Law of Restitution, (5th ed., 1998), pp. 480-81. Thus the son in Routtu could recover from his father. See also Tkachuk v. Uhryn (1952), 6 W.W.R. (N.S.) 515 (Sask. Dist. Ct.) (daughter entitled to costs of funeral from estate); and Sargent & Son Ltd. v. Buday, [2000] O.J. No. 5476 (Ont. S.C.J.) (estate must reimburse son). The Applicant is therefore prima facie entitled to reimbursement for the reasonable expenses he incurred.

[emphasis added]

Even where an estate is insolvent, funeral expenses have a priority among the debts. Indeed, we find this enshrined in s. 46.2 of the Administration of Estates Act, SS 1998, c A-4.1 which says that reasonable funeral expenses are to be paid in priority to virtually all other debts. The provision reads below:

Ranking of debts

46.2 (1) When the assets of an estate are not sufficient to pay all the debts of an estate, the following debts shall be paid proportionately and without any preference or priority of debts of one rank or nature over those of another:

  1. debts due to the Crown in right of Saskatchewan and to the executor or administrator of the deceased person; and
  2. unsecured debts.

(2) Reasonable funeral, testamentary and administration expenses are to be paid in priority to the claims mentioned in subsection (1).

(3) Nothing in this section prejudices any lien or charge existing during the lifetime of the deceased on any of the deceased’s property

[emphasis added]

We even find that the federal Bankruptcy and Insolvency Act makes clear that funeral expenses have a priority, where an estate has assigned into bankruptcy:

Priority of claims

136. (1) Subject to the rights of secured creditors, the proceeds realized from the property of a bankrupt shall be applied in priority of payment as follows:

(a) in the case of a deceased bankrupt, the reasonable funeral and testamentary expenses incurred by the legal representative or, in the Province of Quebec, the successors or heirs of the deceased bankrupt;

(b) the costs of administration, in the following order,

  1. the expenses and fees of any person acting under a direction made under paragraph 4.03(1)(a),
  2. the expenses and fees of the trustee, and
  3. legal costs;

[emphasis added]

Thus, there is a super-priority for funeral expenses. In the Chernichan decision referenced above, the Court even held that funeral expenses have a priority even over unpaid taxes owing by the estate. Because the executor, in that case, should have paid the funeral expenses before the taxes (and she did not), she was personally liable to pay any unpaid reasonable funeral expenses.

What if the funeral expenses are unreasonable?

Funeral expenses only have a priority to be paid, to the extent that they are reasonable. We see the qualifying word “reasonable” used in both the Administration of Estates Act, and the Bankruptcy and Insolvency Act.

What then is reasonable? There is some prior guidance from courts, suggesting that the cost of the funeral should be sensible, having regard to the deceased’s financial assets, and other circumstances. Thus, if a deceased died with very little in assets, it is reasonable that their funeral should contain only that is necessary. Indeed, the Chernichan decision held that ‘in insolvent estates only the simplest and most modest tombstones can be charged against the creditors.”

If the executor of a small estate insists on a magnificent and expensive service or headstone, the funeral home should obtain appropriate assurances from the executor (i.e. pre-payment, or a contract stating that the executor will be personally liable to pay the cost, if the estate cannot afford it).

What if the estate bank accounts are frozen?

Some delays in payment are frustrating but legitimate.

In many, even before probate is obtained, a bank will release monies from an account to pay the funeral costs. If an executor says that the bank will not release money to pay the funeral cost, the funeral home should ask the executor to find out why this is.

What about the case of a disputed will, where someone says Will A is valid, and someone argues Will B is valid? In such a case, the bank may be reluctant to deal with any executor until the one true will is determined in a court proceeding (and thus, once this is determined, it will also determine who is the true executor)

Should a will challenge be a good reason to hold up payment of funeral costs? From a common sense perspective, the two conflicting sides should ideally come to a negotiated agreement on the issue of funeral costs. That is, they may agree to immediately pay the funeral costs out of a bank account, on the basis that, regardless of which will is later found to govern, there is no reason the funeral expenses could not be paid in the interim. Of course, the above outcome requires the reasonableness of the two sides, which is never guaranteed in litigation.

What can funeral homes do to ensure they get paid?

If the circumstances of the deceased are complex (i.e. no local family to act as “decision maker” or pursue probate) the only way to guarantee payment is to ask for payment up front, before  providing services. One situation which occurs is there the funeral home does the work, but is left holding its unpaid invoice when no family member will take the effort to take steps to administer the estate etc. If the funeral home has evidence before the funeral that this may occur, the funeral home may wish to ask for money upfront.

Second, a funeral home should always make sure that it is obtaining instructions from the true representative of the estate. This is already required in the Funeral and Cremation Services Act, which requires a funeral home to obtain written authorization from the authorized decision-maker, before providing services (see s. 92). This due diligence should ensure that a funeral home does not do a lot of work at the request of person A, only to find out that person B was the true executor.

If a funeral home has tried all reasonable attempts to secure payment of an overdue invoice, they may need to simply sue the estate. If the bill is for less than $30,000, which most will be, you can sue in Small Claims court. However, note that in Small Claims court you cannot recover any legal fees, if you use a lawyer. Also note that, due to limitation periods, you must sue within 2 years of the non-payment. Indeed, when suing estates, the sooner you sue the better, to ensure that estate assets are not distributed out of your reach.

Sometimes the question arises – can a funeral home sue the executor personally, as well as the estate, for unpaid expenses? The executor’s personal money, is separate from the estate’s money. The most reliable way to ensure you can sue an executor personally, is to ensure the executor signs a contract in advance, stating that they are personally liable (in addition to the estate) to pay the funeral home. Not all executors may be willing to sign such a clause however, so you should clarify this before the funeral.   

That said, if an estate legitimately incurs a debt to a funeral home, and then later the executor distributes all the assets of the estate before paying the funeral home, that executor may become personally liable. Each situation is unique, and it is recommend to consult a lawyer for specific situations.

Contacting a Lawyer on this Subject

James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

Read more on our blog.

The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

New COVID Regulations

Effective October 1, 2021, the Government of Saskatchewan has introduced new regulations pursuant to The Saskatchewan Employment Act which provide private employers the option (but not the obligation) to require that their employees provide proof of vaccination or confirmation of a negative COVID-19 test result.

Under The Employers’ COVID-19 Emergency Regulations, an employer can choose to implement a policy which will require workers entering the workplace to either (1) show evidence of being fully vaccinated against COVID-19; or (2) show evidence of a negative COVID-19 test at least once every seven days. Employees who are not fully vaccinated will be responsible for any costs associated with the test, which must be taken during non-work hours 

Where an employer chooses to implement a policy under the Regulations, an employee who fails to comply with that policy may be prohibited from entering the workplace and may be subject to disciplinary consequences. It remains to be seen how courts will deal with circumstances where employees are disciplined or even terminated as a result of a failure to comply with a vaccination/testing policy. Lawyers will be closely monitoring developments in this area, and employers and employees who have concerns about these topics in the meantime should consult legal counsel.

Contact a Lawyer on this subject.

Candice D. Grant

Direct: (306) 933-1304
Main: (306) 652-7575
Fax: (306) 652-2445
Email: [email protected]

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Saskatchewan Estate Litigation Update: Fraser v Mountstephen, 2021 SKQB 192

The recent case of Fraser v Mountstephen offers reminder that not every irregularity with a Will can justify subjecting that Will to litigation.

Background

Blair Fraser died without children. He named a friend, Lori Ann Mountstephen, as Executrix. He left his entire estate to the children of Lori Ann. He left nothing to his siblings. Blair’s siblings suspected that Blair lacked testamentary capacity and/or was unduly influenced by the Executrix. A challenge was brought.

The background was this: after Blair’s father died in 2012, the respondent Executrix and her children spent more time at Blair’s farm assisting Blair in its operation. After Blair’s mother died in 2014 the frequency of that assistance increased. On March 10, 2018, Blair executed a Last Will and Testament before two witnesses: Garth Buitenhuis and Rodney Mountstephen. Rodney was the brother-in-law of the Executrix.

Blair’s will directed that his entire estate be distributed to the Executrix’s two children, Kaibry and Meranda.

Concerns raised in the challenge:

The challengers raised various concerns, including the below:

  1. Blair had had difficulties with school and failed to complete grade 11. Blair was also co-executor of his mother’s estate which took three years to administer. When asked about the delay Blair’s response was that it was “really hard”;
  2. Persons had commonly seen Blair to drink often, and often drinking heavily by 3 pm;
  3. The lawyer who did the will, Garth Buitenhuis, had not disclosed his will file notes.

Decision of the Court:

The Court summarized the factors to be considered when deciding whether suspicious circumstances are present (citing from Grosiak v Grosiak Estate2008 SKQB 232)

18  Therefore, when considering whether or not suspicious circumstances are present, the Court must look at the following factors:

(1) the extent of physical and mental impairment of the testator around the time the will was signed;

(2) whether the will in question constituted a significant change from the former will;

(3) whether the will in question generally seems to make testamentary sense;

(4) the factual circumstances surrounding the execution of the will;

(5) whether a beneficiary was instrumental in the preparation of the will.

The Court then went through each concern and found they failed to raise a genuine issue about capacity or undue influence. In particular:

  1. The evidence did not show that Blair in fact suffered cognitive difficulties, much less showed an inference that Blair’s cognitive difficulties impacted upon his testamentary capacity at the time he signed the will;
  2. At law, any established chronic and longstanding alcoholism of a testator was not sufficient to raise a genuine issue, unless there was medical evidence of alcoholism eroding capacity at the time the will was executed;
  3. The complaint about lack of disclosure of Garth Buitenhuis’s file was simply a fishing expedition, based more on what is unknown than known;
  4. The mere fact that a witness to the will (Mr. Mountstephen) was related to the executor, was not a suspicious circumstance and certainly was not probative evidence of undue influence. In any event, it is Mr. Buitenhuis’ uncontroverted evidence that Mr. Mountstephen witnessed the will at Blair’s specific request because Blair could not contact someone else to perform that role.

    The Court held that all the concerns were nothing more than “suggestions of irregularity”, which did not rise to the level of a genuine issue:

      [54]  In my respectful view, the circumstances raised by the applicants are nothing more than “suggestions of irregularity or evidence on peripheral points”. They do not, whether considered individually or cumulatively, constitute probative evidence on the issue of undue influence. Consequently, I find that the applicants have not convinced me there is a genuine issue to be tried on this issue.

      As such, the evidence offered did not raise a genuine question as to Blair’s testamentary capacity at the time he signed his will nor a genuine question as to whether he was unduly influenced to do so. 

      As such, the challenge was dismissed, and the executrix was given her tariff costs payable by the applicants.

      Lesson:

      Challengers must be careful to ensure they have direct evidence which strikes at the heart of whether a testator had capacity, or acted under coercion.

      The best evidence to challenge a will meets the following grounds;

      1. Stems from the precise time period in which the testator put his or her pen to the Will;
      2. Is not circumstantial, but rather is clear evidence showing that the testator may not have understood the Will, or wished to make it.

      Contacting a Lawyer on this Subject

      James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

      Read more on our blog.

      The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

      Saskatchewan Estate Litigation Update: Choquette v Viczko, 2021 SKQB 167

      The recent case of Choquette v Viczko offers guidance on when an executor is required to seek a beneficiary’s consent to sell land. It also explains when no such consent is needed.

      Facts:

      Joseph Viczko died on September 10, 2011. In his September 24, 2010, will he named his daughter, Donna Boots, as executor and trustee. The primary beneficiaries under the will were Ms. Boots and Joseph Viczko’s other children, Yvonne Choquette and David Viczko.

      Certain land was to be sold and the proceeds divided amongst Yvonne and Donna. The relevant wording was as follows:

      d. I DIRECT my Trustee to distribute my estate as follows:

      1. It is my intention to sell the W1/2 12-39-27 W2, or any other farmland that I own, (all such farmland herein being described as my farmland), while I am living and distribute the proceeds of sale equally between my daughters YVONNE CHOQUETTE of Cudworth, Saskatchewan and DONNA BOOTS, of Saskatoon, Saskatchewan share and share-alike. However, if I still own my farmland at the time of my death, then my farmland shall be sold by my Trustee and the proceeds divided equally between my daughters YVONNE CHOQUETTE and DONNA BOOTS.
      2. If YVONNE CHOQUETTE predeceases me or fails to survive me for 30 days from the date of my death, then her one-half interest in the proceeds of the sale of my farmland shall be divided equally among the children of YVONNE CHOQUETTE for their own use and benefit absolutely.

      Ms. Boots had W1/2 12-39-27 W2 appraised, and she and David Viczko ultimately entered into an agreement for David Viczko and his wife Jennifer Viczko (“the Viczkos”) to purchase the land for the appraised value. The sale was completed, and the land was transferred to the Viczkos on February 23, 2012.

      Objection to the land sale by Yvonne Choquette:

      After the land had been transferred, Ms. Choquette objected to the sale to the Viczkos. Ultimately she commenced an action, in which she seeks to have the sale of the land set aside and the land returned to the estate. She relied on the provisions of s. 50.5 of The Administration of Estates Act, SS 1998, c A-4.1. That provision holds that an executor shall not sell land “for the sole purpose of distributing the estate among the persons beneficially entitled to it unless those persons concur in the sale.”

      However, the provision also gives the court the power to approve the sale of the real property if the court is satisfied that it is in the interest and to the advantage of the estate of the deceased and the persons beneficially interested in it.

      Ms. Choquette asserted that the combination of s. 50.5 of the Act and clause 3(d)(i) of the will means that the land sale is invalid because it proceeded without the consent of Ms. Choquette, who is a person “beneficially entitled” within the meaning of s. 50.5(1).

      Issue 1: Is Yvonne Choquette a beneficiary whose consent to the sale of the land is required under s. 50.5 of The Administration of Estates Act?

      The court held that Yvonne Choquette was not a beneficiary whose consent to the sale of the land was required under s. 50.5 of The Administration of Estates Act?

      The court held that s. 50.5(1) refers to persons who are beneficially entitled to the real property that is proposed to be sold. Here, Ms. Choquette is not such a person. Rather, she is beneficially entitled to a portion of the proceeds of the sale of the real property.

      But more importantly,   the Court found there was no operation of s. 50.5.  Here, where the executor was expressly empowered by the testator to sell the land, there was no need for the executor to resort to s. 50.5 for legislative authority to sell the land.

      Because of the direction in the will (i.e. to authorize the executor to sell the land), s. 50.5 of the Act does not apply to the circumstances at all

      Issue 2: Should the court approve the sale of the land to David Viczko under s. 50.5(4) of the Act?

      Even if Ms. Choquette had been required to be consulted, the Court would have given its approval to the sale, over her objection. The court held that the sale was for fair market value, and was necessary to advance the estate administration. Moreover, the sale took place 9 years ago, and to undo it would be very complicated, and incur needless costs:

      [40]  The circumstances are these. The sale of the land implemented the testator’s intentions. There is no dispute that the sale was for fair market value. There is no prejudice to Ms. Choquette in the sale being approved, because she will benefit from the fair market value sale that was directed by the testator. The other parties, and Ms. Choquette as well, would be prejudiced considerably by the sale not being approved. The sale to the Viczkos took place nine years ago. Reversing that sale, including addressing David Viczko’s farming of the land for the past nine years, would plunge the estate – along with the individual parties – into a morass of complication and the promise of even more litigation. Approving the sale would permit administration of the estate to move towards a conclusion.

      In short, before a beneficiary (who is merely entitled to the proceeds of land, but not actually the land itself) tries to object to a sale of the land, they should examine if they are truly entitled to object to the sale.  

      Contacting a Lawyer on this Subject

      James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

      Read more on our blog.

      The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

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      Funeral expenses: Why executors should pay them promptly

      This article discusses the payment of funeral expenses out of an estate, and why executors should pay them promptly. The first reason is practical. After death, the funeral home is often the first to provide a service to the estate. It disposes of the body in a safe...

      Saskatchewan Estate Litigation Update: Bryant Estate v Stuart, 2021 SKCA 54

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      Rebutting the Presumption of Resulting Trust – A Refresher

      Today’s post comes from Wagner Sidlofsky LLP, a well-known estate law blog.

      The article talks about the importance of creating a contemporaneous evidentiary record of a parent’s intention when gifting property to their adult children.

      If a parent places an adult independent child on title to property, there is often a dispute after death as to whether the child was intended to get the property outright, or, hold it for the parent’s estate

      The article provides good guidance on what written evidence you should keep if you add your child to a property. It can help avoid a very expensive fight later.

      The article by Estate Law Canada can be viewed here. 

      Contacting a Lawyer on this Subject

      James Steele’s preferred practise area is estate litigation, including will challenges, executor disputes, power of attorney issues, etc. Contact James Steele at 1-306-933-1338 or [email protected]. The above is for general information only, and not legal advice. Parties should always seek legal advice prior to taking action in specific situations.

      Read more on our blog.

      The Saskatchewan Estate Law blog is dedicated to providing practical, real-world information on Estate Law issues that affect Saskatchewan residents. The blog is written by RS lawyer, James Steele, whose practice focuses on estate litigation.

      Enforceability of Parenting Agreements by the Court and Police

      Is my parenting agreement enforceable by the Court or by the police?

      The short answer is no – well, could it be?!

      Will the Court enforce my parenting agreement?

      Parenting agreements between parties are relevant to the determination of children’s best interests but they are not binding on the Court. This principle has been set out by the Supreme Court of Canada and upheld in decisions of our Court of Queen’s Bench, a few examples of which are as follows: Gordon v Goertz, 1996 CanLII 191 (SCC), Jensen v Walters, 2016 SKQB 267, Lloyd v Lloyd, 2018 SKQB 116, Gudmundson v Fisher, 2018 SKQB 264.

      That being said, a parenting agreement is relevant and can speak to the parties’ intentions respecting the parenting of their child or children.

      Whether the Court adopts and orders the terms provided for by an agreement really comes down to the weight the Court affords a parenting agreement.

      The weight the Court gives an agreement is dependent on a number of factors, including how the agreement was reached, the circumstances of negotiation and signing the agreement, the date of the agreement,  whether any changes have occurred since the agreement was reached, whether the parties had legal advice, and whether the terms of the agreement were followed, and whether the terms of the agreement appear to be in the best interests of the child now.

      Meaning that if a parent applies for parenting time or to “enforce” their agreement or brings an application for parenting time that differs from what is set out in the agreement, the Court will consider the agreement along with the above-noted factors and will determine whether the parenting terms as set out in the agreement are in fact in the child’s best interests and make an order as it sees fit, as guided by the best interests of the children.

      Will the police enforce my parenting agreement?

      I think it is fair to say that the police do not want to become involved in parenting disputes. Before turning to lawyers, many parents first ask the police for assistance in having their children returned. However, the police do not enforce parenting agreements and will routinely decline requests for assistance if the child is simply with the other parent, even if it is contrary to the terms of your agreement.

      The Court has jurisdiction under The Children’s Law Act, 2020 to order police enforcement clauses and has done so in situations where there is demonstrated evidence that a party refuses to comply with a parenting order of the Court. Again, not an agreement, but an actual order of the Court.

      Involvement of the police in parenting matters is far from ideal for children, however, it is a remedy that is available through the Act and can become necessary in parenting disputes to assist with the return of children.

      Each parenting arrangement is unique. I recommend you seek legal advice with respect to your family law matter.

      Contacting a Lawyer on this Subject

      Siobhan Morgan’s preferred practise area is Family Law. For more information on this subject, call 306-933-1308 or email [email protected]

      The above is for general information only. Parties should always seek legal advice prior to taking action in specific situations. 

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