Honour or Headache? Considerations If Named Estate Trustee

At first blush, it seems like an honour; the Will of a friend or family member names you as Estate Trustee. The deceased chose you out of everyone s/he knew to administer the collection and distribution of his or her worldly stuff. 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 taking the position will likely be between 18 to 24 months and could be longer if the estate is complex or if there is animosity between those who are beneficiaries or disinherited beneficiaries. Consider the family dynamic including anyone who might have a claim against the Estate. Are tensions likely to be amicably resolved or will long-standing 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 time, energy and money.

Additionally, you have to account for the Estate Assets to the beneficiaries so if keeping books and records is your nightmare, you may want to pass on the honour. Estate Trustees are experiencing increased scrutiny from beneficiaries and the courts and the courts are finding Estate Trustees personally liable for mistakes made in the administration of Estates.

The appropriate time to 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 renunciation as the case of Dueck v Chaplin illustrates.

In 2013 prior to his death by cancerous brain tumor, the deceased made a new will which replaced his earlier one. The earlier will named the deceased's then wife as trustee and left the residue of the estate to her with a gift over provision to their three children. Between the time of executing the earlier will and 2013, the deceased separated but did not divorce his wife. Contentious litigation about the matrimonial property ensued. (The existence of litigation is a good clue that the Estate Trustee is getting a headache).

The 2013 will named the deceased's lawyer and sister as trustees. The residue of the estate was divided between the three children and the two children of his sister.

The lawyer and sister applied for a certificate of appointment. Shortly after the wife filed a Notice of Objection claiming that the 2013 will was invalid because the deceased lacked testamentary capacity (not a bad assertion when the deceased had a brain tumor) and that he had been unduly influenced by his sister.

The allegations of both claims created conflicts of interest for the trustees. An estate trustee must advocate that the will is valid and both trustees were present when the will was signed and were now witnesses on the issue of capacity.

As legal fees mounted, neither trustee wanted to remain trusteed. They brought an application for directions seeking to renounce the role of Estate Trustee.

The court denied the request and ruled that the steps taken by the trustees were sufficient to bar renunciation. Specifically, the trustees had applied for the Certificate of Appointment. Additionally, they had paid a few debts and collected interest payments on investments.

The Lesson: Before taking steps to administer an estate, including applying for a Certificate of Appointment think about whether you want the position. Is the Estate large and complex? Are there ongoing legal disputes? Is the family dynamic one that will give rise to tension? Are you named as beneficiary which could cause a conflict of interest between yourself and other beneficiaries. Prior to taking any steps, remove the rose coloured glasses and consider whether the honour will become a headache.

Dueck v Chaplin 2015 ONSC 4604 2015onsc4604.pdf (canlii.org)

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