April 25, 2022

Estate litigation cases often deal with multifaceted issues where family members feud about a variety of matters. Will challenges, dependant relief applications and passings of accounts are a few of the types of disputes which result in extensive, protracted and lengthy litigation. In such circumstances, parties often look to appoint an estate trustee during litigation (an “ETDL”) to assist them. Generally, an ETDL is a neutral third party who acts as estate trustee while a court case is ongoing. The ETDL’s role is to, in part, maintain and preserve estate assets, and deal with issues such as estate debts and liabilities, the filing of taxes on behalf of the estate, and the like.

An ETDL could be an individual (i.e. a lawyer or accountant) or a trust company. The question of who should be appointed depends upon, among other things, the complexity of the estate and whether a certain expertise is required.

An ETDL can be appointed on consent of the parties or by motion to the court. In both cases, it is preferred that a court order specifically spell out what the ETDL can and cannot do when it comes to dealing with an estate and its assets. Ordinarily, an ETDL maintains all of the powers of an estate trustee, but for the ability to make final distributions out of the estate; however, each estate is case specific and the parties may seek to grant an ETDL unique authority to deal with a particular asset. Notably, a court order, or agreed upon terms, should also address the question of the ETDL’s compensation, to which it is entitled, just as any estate trustee would be. It is best for all involved if the ETDL has a clear mandate which is understood by the parties.

In situations where estate administration has stalled or is at an impasse, or there is discord among beneficiaries and an estate trustee, an ETDL can be a valuable tool to moving both the estate and any associated litigation, forward.