As we have discussed elsewhere on this website, removing an executor also known as an estate trustee is not easy. In the recent case of Ford Kramer v. Mazman, a decision by Justice Casullo sitting in Newmarket, he outlined and reiterated the law on this point. Two sisters were the sole beneficiaries of their childless aunt’s Will. The aunt however had named a lifelong friend as the executor.
This already is a red flag. Our firm’s practice is to not appoint executors who have no financial interest unless there is an excellent reason to do so. The dynamics make for inherent difficulties. Why should an executor work hard when they have no financial interest in the estate being administered.
In any event, one of the two beneficiaries was especially close their aunt. The aunt apparently having full mental capacity attempted to bequeath her home to one of the nieces. This was plainly obvious and the friend was aware of that intention. A hand written Will known as a holographic Will was done by the aunt in which she indicated that she wished that transfer to take place. This holographic Will was a change to an earlier Will that she had made and was as such titled a Codicil. Before she could have a proper amendment to her Will prepared, the aunt died. The relationship between the Aunt’s friend/executor and the nieces quickly deteriorated. Nasty emails were exchanged, and the friend claimed that the second Will/Codicil was invalid. The friend went so far as to attempt to drive a wedge between the two sisters, who had always been close and on the same page with respect to their aunt’s estate.
The nieces brought an application to the court to have the friend removed as estate trustee. As pointed out in a number of earlier decisions, including that by Justice Quinn in the Radford Estate and by Justice Shaw in the Walsh and Witford Estate, the law is the following:
- The Superior Court of Justice has inherent jurisdiction to remove trustees.
- The choice of the estate trustee is not be interfered with lightly.
- Removing an executor should only occurin the clearest cases and where there is no other realistic alternative.
- Anyone who has a financial interest in the estate may apply to remove an executor. The court’s main guide in deciding whether or not to remove an executor is the welfare of the beneficiaries.
- The parties seeking to remove an executor must show that failing to remove a complaint of executor will likely prevent the terms of the Will from being properly carried out. Removing an executor is not meant to be a punishment for past misconduct.
- Fighting or friction between the parties is not a reason alone for removal.
The court felt that this test was met and the friend was removed.
Another issue is whether or not the two nieces were required to post a bond or security. This is necessary unless dispensed with by a court as neither of the nieces lived in Ontario. The test for such dispensation is encapsulated in the decision of Justice Brown in the Henderson Estate, a 2008 decision of the Ontario Superior Court. The court wants to see Affidavit evidence on the point, which should cover the following issues:
- The identity of all the beneficiaries of the estate.
- The identity of any beneficiary who is a minor or incapable person.
- The value of the interest of any minor or incapable beneficiary of the estate.
- Executed consents from all adult beneficiaries to the appointment of the applicants as executors and to an order dispensing with a bond. This should be attached as an exhibit. The last occupation of the deceased.
- Evidence as to whether all the debts of the deceased have been paid, including any obligations under any support agreement orders.
- Evidence as to whether the deceased had operated a business at the time of death and if the deceased did, whether any debts that business had been or maybe claimed against the estate and a description of each debt and its amount.
- If all debts of the estate have not been paid, evidence of the value of the assets of the estate, the particulars of each debt amount and name of creditor and an explanation of what arrangements have made with those creditors to pay their debts and what security the applicant proposes to put in place in order to protect those creditors.
Justice Casullo felt that the nieces had met that test and dispensed with the necessity of a bond.
Justice Casullo was obviously not impressed by the friend/executor and felt that she had acted in a mean spirited fashion, and ordered that she should be passed over as estate trustee. The judge felt that this was far more than a case of friction, but rather a case of outright hostility between the friend and the nieces.
As an aside, the friend/executor was eventually ordered to pay the legal fees of the nieces of almost $30,000.00 out of her own pocket. The case is not finished and there still remains to be a formal passing of accounts, a process that is discussed elsewhere in this blog.
It is fair warning to all involved, firstly that it is not simple and is clearly extremely expensive to remove an executor. One can well imagine that nieces’ legal fees probably far exceeded the almost $30,000.00 they received in costs. For a judge to have made such a decision would have only come after a number of lengthy and expensive steps had been undertaken.