Saved by a Discharge?
Does being discharged as a trustee of an estate automatically save you from future liability for estate-related activities? This is an issue the Alberta Court of Queen's Bench recently ruled on in Svoboda v. Kuzel [2006] A.J. No. 1657.
Paul Kuzel was discharged as trustee of an estate and was granted compensation for his work done administering the estate, subject to deductions for, among other things, improper personal benefits received by him from the estate.
Mr. Kuzel sought an order expressly acknowledging that he was released from any further claims by the estate. The Court denied Mr. Kuzel’s relief, and in so doing noted the importance of not offending the general theme overarching the law of trustee liability, which seeks to protect beneficiaries and the incapacitated by providing remedies against trustees who abuse their position.
In other words, granting blanket immunity could leave disappointed beneficiaries without any recourse and, in effect, reward a dishonest trustee where wrongdoing was not discovered until after the discharge.
Although Mr. Kuzel’s alleged misconduct had already been disclosed, I am pleased to see that a cautious approach taken by the Court will send a message to rogue trustees that they can not escape liability so easily.
However, I do wonder if this will deter honest prospective trustees from assuming their assigned role out of fear that there may be no end to the scrutiny of their estate administration activities….
Thanks for reading,
Natalia Angelini
Paul Kuzel was discharged as trustee of an estate and was granted compensation for his work done administering the estate, subject to deductions for, among other things, improper personal benefits received by him from the estate.
Mr. Kuzel sought an order expressly acknowledging that he was released from any further claims by the estate. The Court denied Mr. Kuzel’s relief, and in so doing noted the importance of not offending the general theme overarching the law of trustee liability, which seeks to protect beneficiaries and the incapacitated by providing remedies against trustees who abuse their position.
In other words, granting blanket immunity could leave disappointed beneficiaries without any recourse and, in effect, reward a dishonest trustee where wrongdoing was not discovered until after the discharge.
Although Mr. Kuzel’s alleged misconduct had already been disclosed, I am pleased to see that a cautious approach taken by the Court will send a message to rogue trustees that they can not escape liability so easily.
However, I do wonder if this will deter honest prospective trustees from assuming their assigned role out of fear that there may be no end to the scrutiny of their estate administration activities….
Thanks for reading,
Natalia Angelini
