One of the main duties of an executor is to distribute the assets of an estate according to the terms of the Will. Typically, it is easy to pay a cash legacy to a beneficiary or to deliver a specific bequest if the beneficiary lives nearby. But what happens if you have to send large pieces of furniture, an expensive art collection, or a prized collector car to a beneficiary who lives across the country?

What Does the Will Say?

The first thing to do is to review the Will to see if it addresses this question. The testator may have considered this when preparing their Will, particularly if at the time the Will was drafted the beneficiary was living some distance away. My colleague, Sandra Arsenault, raised this in her blog post on Atypical Asset Administration (Part 2) where she stated “You have the power in your Will to dictate whether the expenses of storing, shipping and distributing certain items are paid for by your estate or the intended beneficiary.” The following is a sample Will clause where the estate is responsible for paying the expenses:

 I direct my Trustees to pay all necessary packing, insurance and delivery charges, if any, incurred in connection with giving effect to the provisions of this Paragraph * of this my Will, out of the income and/or capital of my general estate, and also the costs (if any) of insuring and storing the same pending such delivery.

What if the Will is Silent?

More often than not, the Will is silent on this question. In this scenario, there seems to be varying information on who is responsible for these types of costs. One on-line article stated that the cost of getting a specific gift to a beneficiary is paid for by that beneficiary while the cost of getting a general gift to a beneficiary is paid for by the estate. A specific gift is when an item is described in a way that it allows it to be identified in particular, for example, “my re-built ’65 Mustang”, while a general gift doesn’t specifically describe any particular item, for example, “a car”. Other literature did not make this distinction between specific gifts and general gifts but simply said that “Unless the will states otherwise, beneficiaries are responsible for paying delivery costs for assets gifted to them in a will.”

A review of case law provided a more nuanced answer than the information referred to above. The 2021 case of Hayes v. Hayes Estate, 2021 SKQB 132, 2021 CarswellSask 311 (Sask. Q.B.) dealt with an estate where the Will provided for the executor to deliver to the testator’s son “such of my woodworking tools as my said son desires to receive”. The key issues before the court were what specific items were considered woodworking tools and who was responsible for the cost of shipping these items – the beneficiary or the executor out of the residue of the estate.

The court remarked that Canadian case law is limited on the issue of who bears the cost of transporting item bequeathed through an estate in situations where the terms of the Will do not specifically address the issue of costs to transport a bequest. The only case located in Canadian jurisprudence was a New Brunswick case[1] which was consistent with the line of English case law[2] relied on by counsel for the executor. The court found that the obligation was on the beneficiary to arrange for and pay the cost of transporting the items. It held as follows:

“The duty of the executor is to assent the item to the specific beneficiary. It is appropriate for an executor to incur moderate and reasonable expenses to transport a chattel to a specific beneficiary. There are a number of factors which may be relevant, such as the value of the estate, the cost of shipping or transportation, and the value and nature of the asset or chattel. However, this is within the executor’s discretion. The executor is under no obligation to incur out of the ordinary expenses which would then be charged against the residue of the estate. Such expenses should be borne by the specific beneficiary.”

In the circumstances of this case, the executor had already incurred $1,496.25 in shipping to send several boxes of woodworking tools from the deceased’s premises in Saskatchewan to the beneficiary’s residence in British Columbia The court found that the executor had exercised her discretion and incurred reasonable fees for shipping the woodworking tools she previously located.

The appraised value of the remaining tools was $2,700 and the cost to ship these tools was approximately $2,000. The court found that the obligation was on the beneficiary to arrange for and pay the cost of shipping these items, as it was satisfied that further expense to the estate would be out of the ordinary in these circumstances.

I hope you find this information helpful. Thanks for reading.

[1] Sargent’s Estate, Re (1987), 1987 CanLII 7255 (NB KB), 83 NBR (2d) 19 (NBQB)

[2] Coutts & Company v Banks and Ors, [2002] EWHC 2460 (Ch) and Re Fitzpatrick, [1952] Ch 86