Are you wondering how to remove an estate trustee?

The role of an estate executor is no small task. Tasked with managing and dispersing an individual’s assets after their death, the executor plays a pivotal role in the process of estate settlement. They’re typically selected with a great deal of thought, often a trusted friend or family member, nominated in the decedent’s will.

However, there may come a time when the executor’s performance is called into question. The question then arises: how do you remove an estate executor who is not fulfilling their duties? Let’s delve into this intricate process.

Firstly, we must understand that removing an estate executor is no easy feat. The courts place significant importance on respecting the wishes of the deceased, which often includes their choice of executor. However, if an executor is genuinely not performing their duties, there are legal avenues you can pursue to ensure the estate is properly managed.

A personal disagreement with the executor

The first step in this process is to gather evidence of the executor’s wrongdoing or incapacity. Remember, it’s not enough to have a personal disagreement with the executor; you must be able to demonstrate to the court that they have violated their fiduciary duties.

This could include a range of behaviours, from neglecting to pay taxes or bills related to the estate, stealing or mismanaging assets, not distributing assets according to the will, or displaying a significant lack of transparency in their dealings.

Next, you should consult with a probate or estate lawyer to help guide you through the complex legal landscape. An experienced attorney will provide a professional perspective, help you understand whether your evidence is substantial enough, and advise you on the next steps to take.

The executor’s removal is warranted

If your lawyer concurs that the executor’s removal is warranted, the next step is filing a petition with the probate court. This petition typically contains the grounds for removal and supporting evidence. It’s vital that your petition be thoroughly researched and meticulously prepared, as it forms the basis of your case.

The exact procedures may vary depending on your jurisdiction, but generally, all interested parties, such as beneficiaries and other executors (if any), must be notified of the petition.

The court will then schedule a hearing to consider your petition. Here, you will have an opportunity to present your case. It’s crucial to have your attorney by your side during this stage, as they can provide a robust argument for your case and counter any defences the executor might present.

The judge will make a decision

After hearing both sides, the judge will make a decision. If the court rules in your favour, they will order the removal of the executor. It’s important to note that the removed executor must submit an accounting of their activities up to the point of removal. If the court finds any mismanagement, it can hold the executor personally liable.

Once the existing executor is removed, the court will appoint a new executor. This can be a co-executor if one was named in the will, or a neutral third-party, such as a bank or a professional estate executor. The newly appointed executor will then assume the duties of managing and distributing the estate.

While this process can be complicated and emotionally charged, it’s important to remember that the ultimate goal is to respect the wishes of the deceased and ensure their estate is handled correctly. If you find yourself needing to remove an executor, always consult with a legal professional to ensure you navigate this complex process appropriately.

Removal of an estate trustee

An estate trustee is appointed by a testator as their personal representative after their death.

The estate trustee’s role is to apply for probate (if required), gather the assets of the estate, pay the debts of the deceased, maintain the accounts of the estate and distribute the assets of the estate.

There is testamentary freedom, meaning an individual can dispose of their assets in any manner in which they choose upon their death.

Because of testamentary freedom, the testator’s choice of an estate trustee is not interfered with lightly. However, certain circumstances necessitate the removal of an estate trustee, either voluntarily or involuntarily.

Voluntary Renunciation

If an estate trustee is not able or does not wish to act, the trustee may simply renounce his or her appointment as long as the Certificate of Appointment has not been issued and no steps have been taken to administer the estate.

In order to renounce his or her role, the estate trustee must file Form 74.11 with the Court.

Voluntary Resignation

If the estate trustee wishes to renounce his or her role after commencing administration of the estate, he or she must resign. In order to resign, the estate trustee must make an application to the court under section 37(1) of the Trustee Act to be discharged from his or her duties.

Involuntary Removal

The estate trustee is a fiduciary of the estate. As a fiduciary, there is a heightened duty to act honestly, in good faith and in the interests of the beneficiaries.

If the estate trustee is not fulfilling his or her duties and is not acting in the best interest of the estate, anyone with a financial interest in the estate can apply to the Court to have the estate trustee removed pursuant to section 37(3) of the Trustee Act.

The onus is on the applicant to persuade the court that the trustee should be removed. Some reasons for the removal of an estate trustee include:

• putting their interests ahead of the estate;
• making a profit from their position (beyond compensation for acting as trustee);
• mismanaging estate assets;
• engaging in misconduct that endangers the estate;
• unable to act impartially (due to a personal interest in the estate or marked hostility between the estate trustee and a beneficiary); and
• the estate trustee is bankrupt, has been convicted of a crime, is removed from the jurisdiction, or is incapable.

Certificate of Appointment of Estate Trustee

A certificate of appointment of an estate trustee means that your promotion application was accepted.

Minor issues such as friction between the trustee and the beneficiaries or a conflict of interest will likely not be sufficient to warrant the removal of the trustee.

The court’s principal consideration is the welfare of the beneficiaries. Removing an estate trustee is primarily about protecting the beneficiaries and not about punishing the trustee.

There must be clear evidence of the necessity for the removal of the estate trustee; the estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the estate.

Each determination will depend on the facts of the case. If the estate trustee is removed, a new estate trustee will be appointed in his or her place.

Estate Trustee Vs Power of Attorney

If you want to decide between an estate trustee and power of attorney when planning, contact us. We can connect you with an estate lawyer in Vancouver or Toronto.

Libman v. Feldberg is an example of a case in which the estate trustee was removed involuntarily. In this case, Ms. Libman was the sole residuary beneficiary of her mother’s estate. The Will stated that the deceased’s personal effects were to be divided amongst Ms. Libman and the deceased’s grandchildren at Ms. Libman‘s absolute discretion.

The estate trustee ignored this direction and told the deceased’s niece to take whatever she wanted from the deceased’s apartment.

Ms. Libman discovered that many of her mother’s belongings were missing including a candelabra, family photos, a fur coat, a diamond engagement ring and a gold bracelet. Ms. Libman accordingly brought an application to remove the estate trustee.

The Court found that the estate trustee acted in bad faith toward Ms. Libman, which resulted in such a strong degree of hostility and distrust that the estate trustee could not continue to carry out his duties in an impartial manner. As a result, the court removed the estate trustee.

Remove an Estate Trustee

Regardless of whether the estate trustee is removed voluntarily or involuntarily if he or she has commenced administration of the estate, the trustee must pass his or her accounts before stepping down. A passing of accounts refers to the formal process of obtaining the court’s approval of the estate accounts.

Frustrated beneficiaries should speak with a lawyer to determine whether bringing an application to have an estate trustee removed is a viable option in their case.

You should reach out to us if you want to remove an estate trustee or defend against that happening.