There are numerous reasons why parties who have a financial interest in an estate, such as creditors or beneficiaries may be dissatisfied with the performance of an estate trustee and eventually seek to have them removed. These reasons include lengthy delay in administration of the estate, refusal to disclose pertinent information, unwillingness to provide proper estate accounts, preference of one beneficiary’s interests over another, and the list goes on.
Hawkins v. Hawkins Estate, 2013 ONSC 661 (CanLII) was a case which involved estate litigation between four (4) of seven siblings who were to share in the estate of their deceased father. The siblings had a 30- year long history of acrimony between themselves so it was not surprising that the litigation ensued. The litigants sought a determination of whether certain land, which was valuable for developmental purposes, formed a part of the estate or was transferred prior to the testator’s death to one of his sons.
It was asserted that the co-executors had personal interests at stake in the outcome of the litigation and thus were in a conflict of interest as to their obligation to the estate and should be removed from this role.
Provincial legislation provides that a personal representative, such as an estate trustee, may be removed upon proper grounds and the court may make an order appointing a new trustee either in substitution for or in addition to an existing trustee.
Interestingly, the court observed that case law has established a heavy onus on the party seeking to remove a trustee. It is not enough that the moving party does not like the trustee or trust him or her. Furthermore, the duty of the trustee is not to beneficiaries or claimants individually but to the objectives of the trust. Thus the purpose of the statutory authority given to the court is to ensure that trusts are properly executed and the testator’s choice of trustees should not be lightly disturbed. Removal is essentially a last resort in cases where it can be shown that continuation in office will inevitably impede proper administration of the trust.
The question, then, was whether the co-executors could be allowed to instruct counsel and to make the decisions about litigation and settlement when they are personal defendants, have a personal stake in the outcome of the litigation and when there is longstanding animosity between one of the executors and the two brothers who are attacking the assets of the estate.
The court concluded that there was no evidence that the co-executors were engaging in frivolous or protracted litigation or giving unreasonable instructions to counsel that magnify cost and delay, thereby impeding the proper administration of the estate. Their removal, therefore, was not warranted. To the contrary, the court felt that the evidence suggests that the interests of the estate trustees are aligned with the interests of the estate and with the residual beneficiaries, their common goal being to maximize the value in the estate and ensure it is not eroded by the cost of the litigation itself.
If you wish to discuss your concern about the conduct of an estate trustee or receive advice as to how best to execute one’s role as an estate trustee, 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.