March 29th, 2018
As a general rule, the Estate Trustee is given one year to administer an Estate, including to distribute money from the Estate to the beneficiaries (this is called the “executor’s year”).
A recent Ontario Court decision confirmed that unless a will specifically provides otherwise, interest shall begin to run on payments commencing at the end of the executor’s year. This is called the “rule of convenience”.
The interest rate charged is subject to the Court’s discretion.
The rule of convenience will apply, and interest will be owing, even in cases where it is not possible for the Estate Trustee to make payments within the executor’s year. Examples of situations when payments are delayed include when an Estate is subject to a lawsuit or if assets have to be sold before money can be distributed and the assets (e.g. house or farm property) do not sell within a year.
Interest that becomes payable after the executor’s year comes from the residue of the Estate.
Even if the Will provides the Estate Trustee with the discretion to delay making payments, unless the will specifically provides that the rule of convenience does not apply, interest will accrue on the payments commencing at the end of the Executor’s year until the payments is made.
So the answer to the question of whether you are entitled to interest is usually no for the first year, but yes thereafter until the payment is made.