In a recent Ontario case, the court refused to remove the testator’s sister as estate trustee after his sons requested the court do so. It is a reminder that courts are often reluctant to remove estate trustees and the bar set to do so is actually quite high.
Testator’s Sister Appointed as Estate Trustee
The testator passed away on December 23, 2018. His last will and testament was dated July 31, 2013. He left behind two sons. At the time of his death, the testator’s assets totalled just over $200,000, with the main asset being the house he lived in with his common law spouse.
On June 13, 2019, the court appointed the testator’s sister as the estate trustee.
Family Members Go to Court of Estate Administration
Later, the testator’s sister applied to court as an estate trustee seeking its assistance in completing the administration of the testator’s estate, claiming that the two sons had been uncooperative. Specifically, she asked the court to direct the sons to deliver documents and provide funds to pay the debts of the estate.
In response, the sons claimed that the sister should be removed as the estate trustee due to mismanagement of the administration of the estate, failure to file tax returns, and improper accounting practices. They also submitted that the court did not have the jurisdiction to hear the sister’s motion.
Court Dismisses Sister’s Motion for Directions
At the outset, the court began by examining whether it had jurisdiction to issue the directions sought by the sister.
Ultimately, it determined that it did not because her motion pertained to the payment of expenses, fulfillment of duties and delivery of assets and, thus, in the court’s opinion, she could not rely on r. 75.06 of the Rules to secure those types of declarations and orders.
The court clarified that because the relief sought by the sister affected the substantive rights of the sons, she could not proceed by filing a motion for directions.
As such, the court dismissed the sister’s motion.
Court Refuses to Remove Estate Trustee
The court then turned to the sons’ request that the sister be removed as estate trustee.
It explained that the removal of estate trustees is governed by s. 37 of the Trustee Act, which reads as follows:
Removal of personal representatives
37 (1) The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee, and may appoint some other proper person or persons to act in the place of the executor or administrator so removed.
The court then noted that the test for the removal of an estate trustee is high, citing an Ontario Court of Appeal decision which stated:
“Removing an estate trustee should only occur in the “clearest of evidence” and the Court should “not lightly interfere with a testator’s choice of the person to act as his or her estate trustee”. A removal has been found to be an “unusual and extreme course”.”
The court then reviewed the evidence provided by all parties.
The sons essentially claimed that, not only was the sister responsible for income tax issues, but she had also failed to insure the testator’s home. They further claimed that there had been significant delays for what they described as a simple estate. Finally, the sons stated that they had no confidence in the numbers being provided by the sister and that there was a lack of information being disclosed to them.
In response, the sister provided a detailed affidavit responding to each of the sons’ allegations. Among her answers, she asserted that the estate was not in fact a simple one, and listed all the steps she had taken to administer the estate. While she acknowledged that there were some miscalculations, she denied that it amounted to mismanagement. Finally, as to the tax liability issue, she recognized that she had misunderstood the accountant, but had communicated her error to the sons as soon as possible.
Ultimately, the court ruled that there was insufficient evidence for the sister’s removal as estate trustee. Among its reasons, the court stated:
“The affidavit evidence reveals that the [sons] and [the sister] have been experiencing some conflict since shortly after the passing of the deceased, which I find is partially due to the [sons] meddling in the administration of the Estate. Improperly interfering in the administration of the Estate or not cooperating with [the sister] will invariably delay things. The [sons] have their role to play in some of the delays.”
Additionally, the court found no malfeasance of the sister’s part, and concluded that the sons had not met the test for the removal of the sister as estate trustee, instead stating:
“I find that [the sister] is taking her responsibility of administering this Estate seriously and diligently. A clear example is that, despite the dispute with the [sons], [she] has nonetheless continued to administer the Estate by utilizing her own personal funds to pay some of the expenses. This is a true testament of her commitment to fulfilling her brother’s wishes to administer his Estate.”
In the result, the court therefore dismissed the son’s application to remove the sister.
Contact Bader Law for Experienced Advice on Estate Matters
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