Independence is a virtue when it comes to administering an estate.
Considering the heavy weight of responsibility that comes with the job of executor, it’s understandable that testators reach out to a close family member to perform the job.
However, problems can arise when other beneficiaries suspect the executor may be favouring their own interests over those of their fellow heirs.
The threat of a nasty estate fight is even greater when siblings are involved, as nothing stirs up old, long-held resentments more than the emotional turmoil that comes with the death of a parent.
In a recent case that should serve as a cautionary tale to testators, the estate of a rural Ontario woman ended up in court after one of her daughters objected to decisions taken by her brother and sister in their roles as co-executors of their mother’s estate.
Disagreements over the mother’s deteriorating health had already strained the relations between her children before her eventual death in 2023, when two of her four children were appointed as executors of the estate under by her will.
But tensions boiled over when the mother’s home was sold to one of the co-executors for below market value, prompting one of their sisters to call for their removal.
According to the decision, the sibling trustees decided to knock $15,000 off the agreed $295,000 price to account for the real estate commission that would have been payable had the property been sold on the open market.
The judge in the case found that the pair had breached their duties as trustees by favouring the interests of the brother buying the house and ordered him to reimburse the estate for $30,000 after setting the fair value of the property at $310,000.
However, the judge stopped short of removing the co-executors, acknowledging that they were “attempting to manage the estate in a way they believed their mother would have wanted.”
“Family tensions can make it challenging to determine everyone’s best interests,” she added, in something of an understatement.
In my experience, testators who wish to minimize the chances of this kind of fight are best served by selecting an executor with a little bit of distance from the parties involved, and preferably with no interest of their own in the estate.
Beneficiaries are less likely to respond emotionally to a trustee who they regard as truly impartial, which means that disputes can often be contained without the need for expensive and time-consuming litigation.
If you don’t have a trusted friend or family member that fits the bill, you may wish to consider a corporate trustee.
Disclaimer: The content on this website is provided for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind. Users of this website are advised to seek specific legal advice by contacting members of Laredo Law (or their own legal counsel) regarding any specific legal issues.
