Hello from the estate litigation team at Mann Lawyers. We wanted to provide you with an update on some things that we have been thinking about. Please don't hesitate to get in touch with any questions, or just to say hello.
What can I do if I'm a beneficiary and I'm not getting information from an Estate Trustee?
While Estate Trustees often provide informal accounts to beneficiaries, when a beneficiary is not getting information or accounts, they can apply to the Court for an Order mandating that the Estate Trustee must pass their accounts, which is a Court process in which the accounts are reviewed and approved.
As part of the process for passing of accounts, beneficiaries will have an opportunity to review the Estate Trustee's accounts and to make objections to any accounts, including to any specific transactions.
What happens if a person dies with a Will but there is no Affidavit of Execution and the witnesses cannot be located?
If you need to make an Application for a Certificate of Appointment with a Will, in Ontario you will need to file an Affidavit of Execution. While it is common practice now to have the Affidavit of Execution prepared at the same time the Will is executed, that wasn’t always the case and there may still be circumstances today where the Affidavit of Execution is not prepared with the Will.
If neither of the witnesses can be located upon the death of the testator, an affidavit from someone familiar with the signature of the deceased will need to be sworn, attesting to the fact that the signature on the Will is, indeed, that of the deceased. This Affidavit should not come from a beneficiary of the estate. It may come from a financial advisor, bank employee or such other professional who is familiar with the signature of the deceased.
What to do when it is not practical to take appointment or continue as Trustee of a testamentary Trust?
Trust companies are often faced with a dilemma when the fees associated with the administration of a testamentary trust exceed the income generated by it. Given the interest climate over the past few years this is not an uncommon issue. At the time of making the will the fees set out by agreement and the anticipated income would have made sense to the testator and the Trust company. However, time can have a significant impact and a once solid plan may no longer be appropriate such that accepting or continuing with the appointment is not in the best interests of the beneficiary.
For the purposes of this brief comment, assume Mrs. X’s will appoints Trust Co. ABC and an individual as co-executors and co-trustees. Mrs. X’s estate has been administered awaiting a final clearance certificate and the spend thrift lifetime Trust for Mrs. X’s niece and only beneficiary has been funded. There is no provision in Mrs. X’s will authorizing the resignation nor the appointment of new or additional Trustees. I will limit my comments strictly to the resignation and or replacement of Trustees.
If the will itself does not set out a process for the resignation, replacement or addition of a trustee then recourse may be had to the provisions of the Trustee Act, R.S.O. 1990.
In the case where more than two Trustees have been appointed the Act permits one Trustee to resign by deed:
2 (1) Where there are more than two trustees, if one of them by deed declares a desire to be discharged from the trust, and if the co-trustees and such other person, if any, as is empowered to appoint trustees, consent by deed to the discharge of the trustee, and to the vesting in the co-trustees alone of the trust property, then the trustee who desires to be discharged shall be deemed to have retired from the trust, and is, by the deed, discharged therefrom under this Act without any new trustee being appointed.
When there is either one or two Trustees appointed in the will one must refer to s. 3 (1) of the Act which provides that:
3 (1) Where a trustee dies or remains out of Ontario for more than twelve months, or desires to be discharged from all or any of the trusts or powers reposed in or conferred on the trustee, or refuses or is unfit to act therein, or is incapable of acting therein, or has been convicted of an indictable offence or is bankrupt or insolvent, the person nominated for the purpose of appointing new trustees by the instrument, if any, creating the trust, or if there is no such person, or no such person able and willing to act, the surviving or continuing trustees or trustee for the time being, or the personal representatives of the last surviving or continuing trustee, may by writingappoint another person or other persons (whether or not being the persons exercising the power) to be a trustee or trustees in the place of the trustee dying, remaining out of Ontario, desiring to be discharged, refusing or being unfit or incapable.
There are embedded limitations on the use of this provision to replace a Trustee as opposed to having a Trustee resign pursuant to section 2. In my example, as there are two trustees, the individual Trustee can replace the Trust Co., as it desires to be discharged of its duties, by writing, relying on the authority of section 3 (1).
This is a consensual process and is not used when parties are forcefully trying to remove a Trustee.
To replace Trust Co. ABC relying on section 3 (1) the trustees would need a trustee resolution, deed of resignation, deed of appointment and consents.
Did you know that we have an environmental law team, led by Cheryl McLuckie (pictured)? Our environmental lawyers are exceptionally skilled in dealing with all aspects of environmental law, from litigation to regulatory matters to orders issued by the Ontario Ministry of the Environment, Conservation and Parks and the federal Ministry of the Environment and Climate Change. Our clients can have confidence that they have chosen lawyers who are not only remarkably well-qualified, but who also understand all of the issues, risk and challenges that may arise when dealing with environmental matters.