Di Michele v. Di Michele, 2014 ONCA 261 (CanLII) is a recent decision that reminds will makers to choose their estate trustees very carefully. The law says that a bankrupt person cannot act as an estate trustee. However, this case reinforces that a prospective estate trustee should also have strength of character, including honesty and integrity, especially when financial pressures are present or looming on the horizon.
Adalgisa Di Michele died in 1996 and by her will, left the residue of her estate to three of her children. The estate included a family home that she had owned and lived in until her death. This home became the unfortunate subject of this case. The deceased appointed one of the three children, Antonio, as the estate trustee of her will. On March 21, 2002, in his capacity as estate trustee, Antonio took title to the home. In June 2008, while facing personal litigation, Antonio put the home up as security. When Antonio lost the litigation in 2010, the question arose as to whether his opponents had the right to enforce the security and sell the home.
The Ontario Court of Appeal ruled that in light of relevant legislation, Antonio had become the true owner of the property and therefore had a legal right to grant the mortgage. He would remain the true owner unless the property is sold. This mortgage, it was stated, was binding on the entire property rather than just the one-third personal interest that Antonio had in it. The judgment also advised that the wording of the deceased’s will did not specifically give the house to her three children but rather gave the residue of the estate to them, the house being a part of the general estate. It would seem, therefore, that the outcome of the case may have been different if the will specifically transferred the house to the children, rather than just the residue. The case further indicates that if neither the law nor the will mandates that an estate trustee must sell a property within a certain time period, it is wise for the beneficiaries to push to get the property sold as quickly as possible. Although the court sided with Antonio, it is clear that he committed “fraud” to the detriment of the other beneficiaries of the estate.
If you have concerns about an estate trustee`s conduct, their suitability to act in that role or other estate administration issue(s), please contact Andrea Kelly.
Andrea Kelly, Lawyer, has extensive experience in wills, trusts, powers of attorney and estate administration matters. She provides clients with a high standard of timely professionalism and expertise, incorporating a very thorough fact finding process. This is quite often enlightening for her clients and facilitates individually tailored services. If you would like to know more, feel free to use the easy contact form or read Andrea’s bio.