Defending estate litigation in Ontario is never fun to deal with. You have recently taken on the role of estate trustee or executor and are concerned with what challenges lie ahead.

Estate litigation in Ontario presents a complex set of challenges, from the subtle intricacies of legal interpretation to the heightened emotional context of disputes involving family and loved ones. Being a party to such litigation can be an overwhelming experience, but equipped with the right knowledge, understanding, and legal advice, a defence can be built effectively.

To start with, understanding the common grounds for estate litigation is essential. These often include disagreements about the validity of a will, its interpretation, the conduct of trustees, or the rightful beneficiaries. The defence’s strategy should take into account the specific circumstances of the dispute, the assets involved, and the legal framework governing estate law in Ontario.

Claims of undue influence

At the crux of many disputes is the validity of the will. Defending against claims of undue influence, testamentary capacity, or improper execution requires marshalling persuasive evidence and making strong legal arguments. Understanding the basics of these legal concepts is a starting point.

Testamentary capacity refers to the testator’s mental ability to understand and appreciate the consequences of their will when it was executed. Improper execution could mean the will doesn’t meet the formal requirements laid out in Ontario’s Succession Law Reform Act. Undue influence involves coercive behaviour that overpowers the testator’s free will.

Consider a situation where the validity of a will is challenged due to alleged undue influence. The defence should focus on demonstrating that the testator acted of their own free will. This can be achieved by presenting evidence such as statements from witnesses present at the time the will was signed, or professional assessments of the testator’s mental state.

Testamentary capacity

Should the will’s validity be challenged on the grounds of testamentary capacity, it is important to present evidence that demonstrates the testator understood the nature and extent of their assets, the beneficiaries of those assets, and the legal implications of their decisions at the time of making the will.

In cases where a trustee’s conduct is under dispute, a solid defence would typically involve showing that the trustee acted reasonably, responsibly, and in the best interests of the beneficiaries. This often necessitates a deep dive into fiduciary duties and the specifics of trust law.

Documentary evidence showcasing how the trustee managed the estate assets and made distributions in accordance with the will or trust instrument can be critical. Demonstrating transparency in dealings and due diligence in asset management can greatly strengthen a trustee’s position.

Rules of Civil Procedure in Ontario

A unique aspect of estate litigation in Ontario is the possibility of mediation as a resolution tool. The Rules of Civil Procedure mandate mediation for estate disputes in certain regions. Mediation can be a less confrontational and more cost-effective method to resolve estate disputes.

As a defence strategy, it’s important to consider the potential benefits of mediation, which can lead to a mutually agreeable resolution and preserve family relationships.

Finally, defending estate litigation demands the careful selection of legal counsel. A competent lawyer experienced in Ontario’s estate law can guide you through the complex legal landscape, providing advice on the best strategies tailored to individual circumstances. From managing the early stages of the dispute to representation in court or at mediation, the role of a good lawyer cannot be overstated.

Defending Estate Litigation Ontario

Aside from worrying about the necessary steps to administer the estate, you suspect that certain individuals are not content with their entitlements under the will, or lack thereof.

As much as you would like to avoid a legal dispute, the potential for estate litigation may be looming in the near future and there may be many questions that you would like answered.

For example, you may be wondering: “Under what circumstances will I have to defend the estate during litigation?”

Or perhaps, “Will the costs of litigation exhaust the estate? Will I be indemnified by the estate for my efforts?”

We hope to ease these concerns by providing a simplified overview of the common challenges that arise and the general principles that govern costs in the context of estate litigation.

What are common grounds for challenging a will?

A common ground on which wills are disputed is testamentary capacity. An individual may be concerned that the testator lacked mental capacity while making their will.

For example, perhaps the testator had dementia at the time the will was created, and could not appreciate the legal effects of their actions.

Mental capacity is a requirement for granting probate, so if the issue is raised the executor will have to demonstrate that the testator was of sound mind.

A second situation that may lead to litigation is where there were suspicious circumstances in the preparation of a will.

For example, maybe a caregiver accompanied the testator to appointments with their solicitor or communicated instructions for drafting the will and received a share in the estate.

The court will want evidence from the executor that the testator knew and approved of the will’s contents.

Suspicious circumstances

Related to suspicious circumstances, perhaps a family member was pressuring the testator to leave them a certain gift, and there are accusations that the requests rose to a level of coercion.

Such a situation could mean there was undue influence involved. The court will need to be satisfied that the decision to grant the gift or a share in the estate was a result of the testator’s own free will.

Finally, a third potential issue that may be raised is whether proper formalities were observed in the execution of a will.

It could be alleged that a will was not properly witnessed or that there was a problem with the testator’s signature. Formalities are laid out by statute and must be strictly complied with. If this is a point of contention, the estate trustee will need to provide evidence that the formalities were adhered to.

While there are other issues that may be raised, these account for some of the main challenges that can be expected in defending estate litigation.

How are costs awarded at the end of litigation?

You may be worried that litigation will drain the estate and leave nothing behind for the beneficiaries.

This fear might be due to the common misconception that the estate has to bear the legal costs of all parties involved in the litigation.

Although this was the rule historically, costs today are usually awarded in accordance with the “loser pays” principle.

In the past, the estate was responsible for bearing the costs of all parties. The rationale was that a testator should bear the costs of the dispute where their will created the difficulties or ambiguities that gave rise to the conflict.

Defending Estate Litigation Ontario

However, this approach placed a heavy burden on the testator’s estate as it risked being depleted by unnecessary and prolonged court battles.

There was a growing recognition over time that it would be unfair for beneficiaries to lose their gift and for testators’ wishes to go unfulfilled because litigation had diminished the size of the estate.

Today, the court generally applies the same cost rules that apply in civil litigation—namely, the “loser pays” principle.

Legal costs of the successful party

This means that the losing party is typically obligated to pay part of the legal costs of the successful party.

Costs are at the discretion of the court, and when determining whether to award costs and the amount the court will consider what is fair and reasonable in the circumstances, including the reasonable expectations of the parties.

That being said, a few limited circumstances remain where the court has the discretion to order the estate to pay the costs of all parties.

These exceptions include situations such as where there are reasonable grounds for questioning the execution of the will or the testator’s capacity, or where the ambiguities giving rise to the litigation were caused by the testator themselves.

These are issues that the court considers to be in the public interest, and therefore deviating from the loser pays principle can be justified by public policy.

The application of the loser pays principle and its limited exceptions mean that parties should carefully consider the risks before commencing litigation.

Parties can no longer rely on the estate automatically funding their dispute. Defending estate litigation is complex and stressful.

Will I be indemnified for defending the estate?

The “long-held” principle is that estate trustees and executors are to be indemnified by the estate for legal costs that are reasonably incurred in defending an action.

Costs will be covered by the estate to the extent that they were not recoverable from the other party. The logic behind this principle is that failing to provide indemnification would discourage individuals from agreeing to assume such a critical role.

Furthermore, it could risk discouraging executors or estate trustees from bringing proceedings that are necessary to properly administer the estate.

However, estate trustees and executors should be aware that the availability of indemnification is not unlimited.

If you act unreasonably or in your own self-interest, you will not be entitled to indemnification from the estate.

Defending Ontario Estate Litigation

For example, if a judge finds that you are truly litigating in your personal capacity as a beneficiary, and not as a concerned estate trustee, then you will have to bear your own costs.

It is therefore recommended that you carefully evaluate your reason for commencing litigation and the capacity in which you are doing so.

For more information on will challenges and defending estates please reach out to our litigation team. We understand the stresses involved in assuming this critical role and are happy to assist you further.

Defending estate litigation is stressful, so get an expert on your team.

Ontario’s Succession Law Reform Act

Ontario’s Succession Law Reform Act, enacted in 1977, is a piece of legislation that addresses the complex matters of estate planning, testamentary disposition, and how wealth and assets are distributed after an individual’s death. Often, understanding the intricacies of this legislation can be a daunting task, but let me break it down in simpler terms.

The essence of the Succession Law Reform Act, or SLRA as it’s often referred to, lies in its role in managing the distribution of a deceased person’s assets. When an individual passes away, their worldly goods don’t merely vanish into thin air. There is, in fact, an intricate web of rules and regulations dictating how these assets are divided among surviving family members, beneficiaries, and other parties as per the will if it exists, or provincial law in its absence.

Requirements for drafting a valid will

The SLRA notably facilitates the execution of a will. As you might already know, a will is a legal document expressing a person’s wishes about their property after their death. The SLRA outlines the legal requirements for drafting a valid will, such as the person’s age (at least 18 years), mental capacity, and the document’s execution (it must be in writing, and signed by the testator in the presence of two witnesses who are not beneficiaries or spouses of beneficiaries).

However, what if there is no will? This situation, known as dying ‘intestate’, is also covered by the SLRA. The act stipulates a prescribed manner of distribution for the deceased’s estate when a valid will is not present.

If the deceased is survived by a spouse and children, the spouse receives a preferential share (as of my knowledge cutoff in September 2021, it was $200,000), with the remaining estate divided between the spouse and children according to specified proportions. If there are no immediate family members, the estate is distributed to other relatives following a detailed hierarchy.

Defending Estate Litigation Ontario

Let’s not forget the vital role of the estate trustee, often termed the executor. Under the SLRA, the trustee holds the responsibility for administering the estate, including paying off debts and taxes, distributing the remaining assets, and often, making difficult decisions to honour the deceased’s wishes while adhering to the law.

A point of interest in the SLRA is its recognition of dependents’ claims. Dependents, not adequately provided for in the will, have the right to claim support from the estate. A dependent can be a spouse, parent, sibling, or child of the deceased. This provision showcases how the Act does not solely focus on the testator’s wishes but considers the larger societal picture by ensuring that dependents are not left destitute.

However, the Act is not without its controversies and has been the subject of reform discussions. For instance, there’s been an ongoing debate regarding the rigid requirements for a valid will. In our rapidly digitalizing world, there is an increasing call for the recognition of electronic wills, and some critics argue the Act is overdue for a revamp to accommodate these changes.

We hope you found this guide on defending estate litigation in Ontario useful.

Author: Barbara Green, a lawyer in Toronto