Honour or Headache? Considerations If Named As Estate Trustee
As first blush, it seems like an honour; the will of a friend or family member names you as estate trustee. The deceased has named you, out of everyone s/he knew to administer the collection and distribution of his or her worldly goods. However, before accepting the honour, take a few minutes to consider whether doing so will be a headache rather than an honour.
First, the commitment of accepting the position will likely be between 18 and 24 months and could extend longer if the estate is complex or if there is contention between those entitled to inherit or those disinherited. Consider the family dynamic, including family members who might have a claim against the estate under legislation such as the Succession Law Reform Act or the Family Law Act. Are any tensions likely to be amicably resolved or will long-brewing issues boil over? An estate trustee can become the target of long standing feuds and, become entangled in litigation that is costly in terms of money, time and energy.
Estate trustees are undergoing increased scrutiny by beneficiaries and disinherited family members. Additionally, courts are increasingly finding estate trustees personally liable for mistakes made in the administration of the estate.
The appropriate time to decide whether to accept or renounce the role of estate trustee is prior to taking any steps to administer the estate. Even minor steps can result in a court refusing to allow the renunciation. A recent case, Dueck v Chaplin, illustrates.
In 2013, prior to his death caused by a cancerous brain tumor, the deceased made a new will which replaced his earlier will made in 2001. The 2001 named his, then wife as estate trustee and left the residue of the estate to his wife with a gift over dividing it between their three children. Between 2001 and 2013 the couple separated, but did not divorce, and were involved in contentious acrimonious litigation over the division of matrimonial property. (The existence of an ongoing dispute is a good clue that the estate trustees are inheriting a headache.)
In 2013, the deceased made a new will which named his matrimonial lawyer and his sister as estate trustees. The residue of the estate was to be divided equally between his children and the two children of his sister.
The sister and lawyer applied for a Certificate of Appointment as Estate Trustees. Shortly after, the wife filed a Notice of Objection claiming that the 2013 will was invalid because the deceased lacked testamentary capacity (always a good argument when there is a brain tumor involved). The wife also claimed that if there was testamentary capacity, the sister had unduly influenced the deceased in making the will. Additionally, the wife sued the lawyer for negligence in ascertaining capacity.
The allegations of both claims created conflicts of interest for the two estate trustees. An estate trustee must advocate that the will if valid, yet both trustees had been present when the will was signed and were now witnesses on the issue of testamentary capacity. As legal fees mounted, neither trustee wanted to remain trustee. They brought an Application for Directions to the court seeking to renounce the positions of Estate Trustee.
The court denied the request and ruled that the few steps that the estate trustees had taken were sufficient to bar renunciation . Specifically, the estate trustees had applied for the Certificate of Appointment as Estate Trustees. Additionally, they had paid a few debts and collected sets (interest payments on investments).
The Lesson: Before taking any steps to administer an estate, including applying for the Certificate of Appointment as Estate Trustee, think about whether you want the position. Is the estate large and complex where administering investments will require extensive time and specialized knowledge? Are there any ongoing legal disputes or is the family dynamic such that will give rise to tensions and disputes? Are you also named as a beneficiary which could create a conflict of interest between yourself and other beneficiaries? Prior to taking any steps, remove the rose coloured glasses and consider whether this honour will rapidly become a headache that you would rather not have.
Dueck v Chaplin, 2015 ONSC 4604 https://www.canlii.org/en/on/onsc/doc/2015/2015onsc4604/2015onsc4604.pdf
The content and the opinions expressed here is informational purposes only and does not constitute legal or professional advice. Nor does reading or commenting on it create a lawyer/client relationship with the author. I encourage you to contact me directly at adrianlawoffice@gmail.com if you have specific legal questions or concerns.
The author encourages you to share this article on social media.