How To Administer The Estate Of A Hoarder (er, Collector)
Administration of estates can vary widely depending on the personality of the deceased. The estates of hoarders or, as the are sometimes called, collectors can present specific challenges for an administrator. For example, removing the hoarded stuff can increase the time spent on administrative duties to ridiculous amounts. Some of the hoarded "stuff" may actually have value. Do you throw it all out or painfully sort through the mountains of stuff in hopes of finding valuables, money or important papers? What about repairing and maintaining property? An administrator could face legal challenges to his or her action if disgruntled beneficiaries think assets were not realized or money was spent unnecessarily in realizing the estate assets.
A recent Manitoba Queen's Bench decision, illustrates a situation where the administrators made several mistakes in administrating a hoarder's estate. but provides some guidance on how the estate should have been administered.
In 2005, George Halayko died without a will. Halayko left two duplexes, a number of bank accounts, a few bonds and a significant sum of cash in a safety box. Since Halayko did not have children, the laws of intestacy dictate that his estate would be divided between this three sisters. The son and son-in-law of one of the sisters were appointed administrators of the estate by the court.
As you can guess, the length of time between death and court case signifies problems. The administrators clearly did not act swiftly to deal with the estate. Delay is a good way to invite trouble. The longer beneficiaries have to wait to get answers or a distribution, the more likely they are to question what an administrator is doing. It is best to work in a timely manner and keep beneficiaries informed of the status of the administration.
According to the estate administrators, Halayko was a hoarder. They claimed that the duplexes were filled with garbage, decaying food, mice feces, rusted and non-working appliances and other assorted junk. They also claimed that they had sorted through all of the junk because they thought they might find money and valuables, including a will. They claimed that they had spent hundreds of hours cleaning up and claimed they, their family members who they employed and other third party employees were owed over $80,000. Their claim was questionable, however. The time sheets submitted had bare bones descriptions such as "did work at duplex A" of "worked at duplex B". Additionally, despite claims that they sorted through all of the stuff in the house, they had not listed a single asset as a valuable retrieved and realized for the estate.
The administrators also claimed reimbursement for monies paid to repair the two properties and get them ready for resale. This included money to repair a broken window, to paint and other miscellaneous projects.
In reviewing the submitted expenses, the court ruled that the absence of time sheets and proper descriptions of work done was problematic. Additionally, sorting through the junk that was left, was an improper waste of time because no valuables had been found. The court further noted, that belief that the deceased had kept large sums of cash at the property was unreasonable given the fact that he had a number of existing bank accounts. The court reduced the $80,000 claimed to $34,000.
The comments by the court do provide guidance for other estate administrators, which follow:
Keep proper records of time spent cleaning the property including descriptions of what is actually being done;
Take pictures of the condition of the property and the amounts of stuff that must be sorted through. One of the issues in this case was whether the deceased was a hoarder or merely a collector who had a lot of stuff. Pictures could have clearly showed a judge the amount of stuff that had to be dealt with.
Be prepared to re-evaluate any decision to sort through possessions with a hope of realize. It is unreasonable to continue to painstakingly spend hours sorting possessions that have no value.
Obtain quotations for repair projects so that you can demonstrate the work done was a reasonable price. This is also important if you plan on doing the work and taking compensation. It is easier to justify a payment to yourself if you can show it is fair market value for the work.
As stated, do the work in a timely manner and keep beneficiaries informed. If a beneficiary feels shut out or that the administration is taking too long, they are more likely to challenge the administrator's actions
The Estate of George Halayko, 2016 MBQB 85 https://www.canlii.org/en/mb/mbqb/doc/2016/2016mbqb85/2016mbqb85.pdf
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