The Estate and Trust Litigation group recognizes the uniquely personal nature and circumstances of issues in this area. This informs and guides our approach in advising clients and resolving disputes. Being an estate trustee or executor can often be an overwhelming experience. Our team of lawyers advises and assists estate trustees and executors to address essential matters such as: the interpretation of a Will or Trust; applications for Certificate of Appointment of Estate Trustee with or without a Will; intestacy situations; the passing of an Estate Trustee’s accounts; and the distribution of beneficiaries’ assets.
RESOLVING YOUR ESTATE DISPUTES
As the Canadian population ages, estate litigation is an area of legal practice which is growing in Ontario. Disputes regarding estates can arise in a variety of contexts including, but not restricted to: family members contesting a Will or Trust; filing a Notice of Objection related to a trustee dispute; litigating disputes involving trustees or executors; complex estate plans; changes in a testator’s Will; inadequate provision for dependents; filing dependents’ relief claims when an heir is excluded from a Will; executors’ fulfillment of duties or passing of accounts; and dispersion of sentimental properties.
Pace Litigation Group supports clients with claims involving the administration of estates or trusts. Disputing such claims requires the advice and guidance of legal counsel who are knowledgeable about both the applicable legal issues, as well as the available procedural options. There are several issues that are commonly encountered in disputes over the administration of an estate or trust. They include: challenges to a Will, and the interpretation of a Will or trust; quantum meruit claims; capacity claims; dependants’ relief claims; the passing of an Estate Trustee’s accounts, and breach of trust by an Estate Trustee.
Regarding challenges to a Will, causes of dispute include:
- The testator’s capacity
- The existence of undue influence on the testator
- Failure to satisfy the formalities of execution in creating a Will
- The existence of provisions in a Will which conflict with Canadian public policy
Quantum meruit claims typically arise in estate litigation when the deceased had entered into an argument with an individual, promising for the performance of an action, but the payment was not made and was not addressed in the deceased’s Will.
Because of the dramatic increase in life expectancies and the “baby boom” demographic bulge, claims relating to capacity are increasingly frequent. The matter of capacity is complex—insofar as it applies to a number of different issues. Questions of capacity are applicable to such matters as: whether or not the deceased was capable of making a will; and whether or not the person had the capacity to manage property, appoint a power of attorney, make decisions regarding medical care, or marry. These issues, which may overlap, are further complicated by the fact that the applicable test for capacity is specific to the issue in dispute. For example, an individual may have the capacity to marry, but not to make medical decisions or to manage property.
With respect to “testamentary capacity”—the capacity to make a legally valid will—the individual must be “of sound mind, memory and understanding.” The validity of a will demands that the individual making it understood “the nature and quality of the act.” It must also be demonstrably clear that the will-maker understood who the beneficiaries of the will would be and what they would receive, the nature and extent of his or her property, and what those who are being excluded might reasonably claim.
Though a testator is generally accorded the right as to whom his or her property will be bequeathed, that right is not absolute. In Ontario, the Family Law Act recognizes that an individual has financial responsibilities to family members—including minor children, spouses, and parents. Regarding minor children, the Criminal Code stipulates that parents must provide their children with the necessaries of life. Further, in accordance with the statues of the Succession Law Reform Act, the estate of the deceased may be obligated to pay support, which has not been declared in the will, to spouses, parents, and children.
For dependants who have been disinherited, a number of factors bear consideration in determining the outcome of a claim for relief. The dependant’s age, physical and mental health, needs, and the proximity and duration of his or her relationship with the deceased are significant elements to be weighed in considering relief. In addition, the existence of any agreement that may have existed between the dependant and the deceased, as well as the existence of other claims are pertinent factors. When the dependant is a spouse (including common law relationships), the length of time cohabitating with the deceased, and a history of behaviour that is so egregious as to repudiate the relationship constitute relevant considerations.
The Estate Trustee (the Executor and Estate Trustee) is charged with the responsibility of distributing the estate’s assets. Because the Estate Trustee is considered to be a fiduciary, the individual(s) fulfilling that function must establish a separate account for the deceased’s funds. In addition, the trustee has a duty to keep comprehensive record of the monies the estate has received, and the details of its expenses and the funds dispersed. The trustee must provide the beneficiaries with a proper accounting indicating the value of the estate, and whether or not he or she has satisfied all of the estates debts and distributed its assets properly. The guiding operative principle for the Estate Trustee is that all expenses incurred must demonstrably benefit the estate. Although court approval of the Estate Trustee’s accounts is not mandatory, the beneficiaries are entitled to demand of the trustee a full and complete accounting. Refusal or failure to do may lead the court to remove the Estate Trustee.
In Ontario, estate accounting and power of attorney accounting must adhere to a vey strict accounting protocol. Generally, disputes arising from the estate trustee’s accounting do not involve mismanagement or breach of fiduciary responsibility, but rather the trustee’s fees. The trustee is entitled to reasonable compensation for the administering an estate. Various factors—including the size and complexity of the estate, the demands made on the trustee in terms of time and the effort required to fulfill his or her duties responsibly, the skill and knowledge demonstrated, and the success of the trustee’s work on behalf of the estate—are taken into consideration when assessing the legitimacy of the fees the Estate Trustee is claiming. There are existing “tariffs”—guidelines for trustee’s fees—though the court may regard the existence of the aforementioned factors as providing the basis to approve fees that exceed the tariffs.
There are various circumstances that may lead to the removal of the Estate Trustee such as bankruptcy, illness, and being convicted of a crime. Further, if there are multiple trustees and there exists discord or animus between them, which is such that it may negatively impact the beneficiaries, the court may act to uphold the beneficiaries’ welfare by removing the trustees. Regarding breach of duties by an Estate Trustee, the court may rule that the trustee’s failure to meet the elevated duties of a fiduciary—that is, to act honestly and in good faith on behalf of the beneficiaries—warrants his or her removal. In those instances in which there exists a financial conflict of interest arising from the trustee’s previous relationship with the deceased or other circumstances that compromise the trustee’s capacity to act impartially, the court may rule that the trustee must be removed.
WILLS, TRUSTS, OR POWER OF ATTORNEY
Within the City of Toronto, mediation is a mandatory step in the resolution of disputes over Wills. Our knowledgeable and experienced litigators recognize that securing an effective and satisfactory settlement often involves being sensitive to potentially damaging familial or personal relationships. We attempt to customize our approach to dispute resolution by identifying not only the relevant legal issues, but also the pertinent personal circumstances and relationships involved. We provide our clients with an informed understanding of their legal rights and obligations, and outline their options and the associated costs.