The application process to be formally appointed as an estate trustee can be complicated and take as long as several months to be granted. It can also be expensive due to the applicable estate administration tax which is based upon a formula that essentially works out to a percentage of the value of the assets passing through the estate. Thus, most estate stakeholders try to avoid seeking a formal appointment if feasible. Ideally, this is done before death when estate planning is possible. But, there are times when people try to avoid being formally appointed as estate trustee after death yet are only successful in limited situations.
Denham v. Hamilton Health Sciences Volunteer Association, 2012 HRTO 858 (CanLII) was a matter heard by the Human Rights Tribunal of Ontario in which the applicant passed away after starting the application. As she did not leave a valid will, there was no appointment of an estate trustee for the estate. Her husband desired to continue the application she had started without being appointed as the Estate Trustee. In so doing, he wished to avoid the court process and payment of estate administration taxes that is required to be appointed for this role. The tribunal confirmed that an estate may continue an Application under the Human Rights Code but the issue was whether an executor or estate trustee must be appointed before that can happen.
In its analysis, the tribunal upheld the legislative regime which essentially states that a tribunal is not an independent entity on its own having authority to allow someone to represent the estate outside the specific procedure for that purpose established in estates legislation. It was further stated that in the current human rights regime, an application cannot be continued where no administrator, personal representative, executor or estate trustee has been appointed for the estate of a deceased applicant.
Here we are reminded that relevant legislation stipulates that on a person’s death, all real and personal property that does not pass by right of survivorship is becomes vested in his or her personal representative. Legislation also requires that formal appointment as an estate representative must be achieved by application to the relevant office of the Superior Court of Justice and related taxes must be paid in making that application.
Thus neither the courts nor a tribunal such as a Human Rights Tribunal have a power to allow an action to be brought on behalf of an estate without an executor or estate trustee. A court action or application by an estate must be brought by an executor or estate trustee. Only where a proceeding is commenced or continued against an estate may a litigation administrator be appointed for the purposes of the proceeding in the Court.
In postponing Mr. Denhem’s application, the tribunal firmly upheld and refused to bypass the comprehensive statutory regime governing estate which provides for a specific process for the estate to be constituted and for a representative to be appointed.
The tribunal further concluded that the tribunal’s general procedural powers cannot override clear and comprehensive statutory provisions that provide for the appointment by a court of a person or persons to control an estate’s assets and make decisions on its behalf. The Application, therefore, could not proceed without the appointment of an estate trustee.
The case is a reminder that it is worthwhile to have a valid will in place to make a possible future probate application process easier. One should also bear in mind that being permitted to represent an estate for a given situation or proceeding is unlikely without being formally appointed as estate trustee.
For assistance in applying to be an estate trustee or advice regarding representation of an estate in a court or other proceeding, 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.