Estate Trustees During Litigation
The recent case of Taylor (Estate) (Re), 2007 CanLII 23178 (Ont. S.C.) illustrates the principal that where there is an issue as to who should be acting as estate trustee during litigation, the easiest and most effective solution is to appoint a neutral third party.
There, the deceased appointed her two children as estate trustees. Disputes arose as between the two children. Litigation resulted, with the daughter applying to be appointed as sole estate trustee, for an order that the deceased’s house, occupied by the son, be sold, and that the son repay certain monies to the estate. The son applied for directions on a number of issues, including who should be appointed as estate trustee.
In the materials put before the court, both parties made serious allegations against the other regarding the misuse or mismanagement of estate property.
The court held that appointing both siblings would be a “recipe for disaster” and would result in a “paralyzed estate”.
Appointing only one sibling would “heighten the mistrust” and would exacerbate matters.
The easy answer for the court was to appoint a neutral third party. The parties were given time to agree on the selection and appointment of a mutually agreeable third party.
Often, the fight over who is to be estate trustee in a contested proceeding is one of the first issues to be dealt with. The court recognizes this, and recognizes that control over the estate is a flashpoint. Giving control to one party to the exclusion of the other is seen as exacerbating distrust, whether warranted or not, and raising the opportunity for abuse. For this reason, the court will often seek to avoid the problem by simply appointing a neutral third party.
Thank you for reading.
Paul Trudelle
