Overview
In some cases, an estate trustee (“ET”) has been appointed, but needs to be replaced before the estate administration is complete. This can occur for a variety of reasons: the ET becomes unable or unwilling to continue acting for the estate, the ET is removed by the Court in the course of litigation, or due to the death of the ET while he or she is still in the course of administering the estate in question.
In these circumstances, another individual may apply to replace the outgoing or deceased ET. In some cases, the will of the deceased testator has named a secondary individual to serve as estate trustee in case the ‘first choice’ ET has predeceased or is unable or unwilling to act. This secondary candidate may apply to be appointed as a Succeeding ET. If there is no secondary individual named in the will, but the now-deceased ET has appointed someone to act as trustee of his own her own estate, that person will be able to apply for a status certificate from the Court and act for both estates as ET. The new ET or Succeeding ET will bear the same responsibilities and duties as a regular ET and would be entitled to compensation according to the same scale.
Resignation
If an ET has been appointed and commenced acting, but no longer wishes to act, he or she may be able to resign from this position. To do so requires a Court order, and the outgoing ET will often be required to pass his or her accounts. In some instances, the Court may also require an explanation for the resignation before allowing it. Often, the outgoing ET will seek an agreement or order that he or she not be held liable for acts or omissions of the new ET once appointed; likewise, the newly appointed ET may seek the same for actions of the prior ET.
Removing an ET by Court Order
A common query that estates lawyers receive is whether it is possible to remove and replace an ET that is moving the estate administration along too slowly or inefficiently, is not being responsive, or appears to be acting in a self-interested and improper manner. In order to have an ET removed by the Court, an individual, often a concerned beneficiary or co-ET, may commence an application before the Superior Court. In some cases the party seeking to remove the ET also seeks to be appointed as the new ET as a part of the same application. In some cases there is an innocent explanation – the ET is simply taking his or her time in order to make sure that nothing is missed, or simply forgot to keep the beneficiaries updated on the steps being taken. In other instances, investigating the actions of the ET begins to reveal a troubling pattern of behaviours, and further actions, including commencing an application to remove and replace the ET may be warranted.
It is important to note, however, that the threshold to have the Court remove and replace an ET is quite high: a recent case, Taetz v. Mikolajewski, 2023 ONSC 4635, re-affirmed that the principles Courts consider when deciding whether to remove an ET must include the following:
“(1) the court will not lightly interfere with the testator’s choice of estate trustee; (2) clear evidence of necessity is required; (3) the courts main consideration is the welfare of the beneficiaries; and (4) the estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the trust”.
The case law is clear that mere ill will or a poor relationship between an ET and a beneficiary (or between two or more co-ETs) will generally not suffice for the Court to remove the ET and appoint someone new. Rather, the applicant must demonstrate that it is necessary for the ET to be removed in order “to protect the assets of the trust and the interests of the beneficiaries” for the order to be made.
Takeaway
Given the time and expense that may be required in order to resign, an individual that is named as ET in the will of a deceased person, but is unsure if he or she wants to take on this role, should seek legal advice and carefully consider the options before acting as ET or applying for a certificate of appointment. Similarly, given the high threshold needed in order to successfully remove an ET from his or her position, an individual considering commencing an application to do so should exercise caution and seek high quality legal advice before commencing the litigation.
