Disputes over estate matters are another version of family law.  Estate litigation usually involves close family members who are at odds over their differing treatment by parents and relatives.  Estate cases are often stressful and emotionally draining. If you intend to dispute a Will or a trust, have concerns about decisions that an executor or guardian is making, would like a review of decisions that have been made, are concerned about an elderly relative or friend, or are otherwise involved in any dispute involving an estate, it is critical for you to consult with an estate lawyer. Such disputes require guidance from experienced estate counsel.  

 

HOW WE HELP
 

Centrepoint's lawyers are compassionate and experienced.  They work closely with their clients to understand their concerns, and offer honest, pragmatic, and practical advice, striving to achieve the most expeditious, cost-effective solution for their clients’ estate disputes. They will meet with you to explain your options and represent your interests and goals until your estate or trust dispute has been resolved.   If your issues cannot be resolved through negotiation, they will not hesitate to represent you in court.
 

Centrepoint's lawyers advise and represent trustees, executors, attorneys, and beneficiaries on various estate law and litigation matters including:

 

• Guardianship and capacity issues

• Compensation disputes

• Removal disputes

• Will challenges/Defending the will

• Challenges to the executor

• Dependant’s support claims

• Passing of accounts

• Trust variations

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CAPACITY AND GUARDIANSHIP ISSUES

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Mental capacity can diminish as we age, or as the result of an injury or other health condition. When someone starts to have trouble understanding complex information, or cannot appreciate the consequences of their decisions, they may no longer have the required capacity to manage their own finances, or to make decisions about their personal care and health. In these situations, a power of attorney may be needed to manage property or personal care.  When this happens, it would be wise to have previously drafted powers of attorney ready to give loved ones the ability to make decisions for someone who has become incapable.  If a person has not granted anyone a power of attorney and they become incapable of managing their affairs, their loved ones may have to ask the court to appoint a legal guardian to act on their behalf.

 

TRUSTEE AND EXECUTOR COMPENSATION ISSUES

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Both executors and trustees are entitled to compensation for managing an estate. Occasionally, disputes may arise as to what the amount of this compensation should be, and this can become a contentious issue between beneficiaries and the executor or trustee. Compensation disputes can be lengthy, technical, and emotionally draining for everyone involved, particularly where the executor or trustee is a close relative, other family member, colleague, or long-time advisor. 

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Where a Will does not expressly mention the compensation a trustee or executor is entitled to, or provide how that compensation should be calculated, the individual seeking compensation will have to refer to legislation and previous court decisions to resolve any potential disputes. 

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In Ontario, the relevant legislation governing compensation for executors and trustees is the Trustee Act which allows for “fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate” as determined by a judge. However, the Act does not specifically outline how compensation must be calculated. 

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For that, case law must be referenced. Previous estate decisions have created a “percentage tariff” calculation used to calculate a baseline for executor and trustee compensation. This tariff sets the baseline at 2.5% of the value of receipts and disbursements, and a care and management fee of 2/5 of 1% of the average annual value of the estate’s assets. 

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Once the baseline fee has been determined by the tariff, the court will then consider whether this sum is “fair and reasonable” based on the following five factors:

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1. The size of the trust;

2. The care and responsibility involved;

3. The time spent;

4. The skill and ability demonstrated; and

5. The success resulting from the administration.

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In some situations where an estate required excessive time to manage, or work not contemplated by the tariff was undertaken, a special fee may be allowed in addition to the above. 
 

 

TRUSTEE DISPUTES

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During the management of an estate, questions or concerns may arise about the conduct of a trustee. Sometimes, the removal of the trustee may be necessary or requested by individuals with an interest in the estate. 

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An application for removal of a trustee can be made under the Trustee Act by a co-manager, a beneficiary, or by any other person who has an interest in the estate. Generally, courts are reluctant to interfere with the wishes expressed in a will by the testator or testatrix. As a result, a person seeking a trustee’s removal will have to present clear and compelling evidence to warrant the court making an order to remove the trustee. The applicant will have to prove to the court that the trustee’s conduct puts the administration of the estate at risk.

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A court is more likely to remove a trustee where:

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• the trustee has hidden assets

• the trustee refuses to account to the beneficiaries by showing them the financial records of the estate

• the trustee has had a criminal conviction even if it was unrelated to the estate

• the trustee has declared bankruptcy

• the trustee has a medical illness which hinders the administration of the estate

• the trustee suffers an incapacity

• the trustee is in a position of conflict with the estate 

• the trustee’s conduct cannot cooperate with a co-trustee

 

 

WILL CHALLENGES

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In Ontario, there are only a few legal grounds on which a Will can be challenged. Courts are generally reluctant to set aside the wishes of the person making the will, and any Will that is validly made will be enforced. A court will not set aside a Will simply because beneficiaries believe that it is “unfair” or that they have not received a significant enough share of the assets. 

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Generally, the grounds for challenging a Will are:

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• that the Will was not signed by the testator or the signature is invalid

• that the Will was not witnessed or improperly witnessed

• that the Will was voided, for example, by a subsequent marriage

• that the person who made the Will lacked capacity

• that the Will was made under duress or undue influence 
   

Both the signature of the person making the Will and the signatures of two witnesses are critical to making a valid Will, with the exception being a holographic or handwritten Will where only the signature of the person making the Will is required.

 

 

DEPENDANT SUPPORT CLAIMS

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A person writing a Will can generally decide to whom they will leave their property, as long as they comply with any obligations they have to provide for dependants, including minor children. 

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A person who is a dependant but who has not been provided for in a Will, can file a dependant support claim and sue the estate for support. Under Ontario law, a dependant is anyone whom the drafter of the Will was providing for prior to their death, or anyone they were legally obligated to provide for. Such individuals could include:

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• a spouse, including a former spouse or a common-law spouse

• a child, including an adult child or a grandchild

• a parent, including an adoptive parent

• a sibling 

 

Such persons have the right to seek support against the estate. Individuals seeking to file a claim should be aware that there is a time limit within which to do so. A dependant support claim must be filed within six (6) months of the issuance of a Certificate of Appointment of Estate Trustee, unless a court provides a longer time frame. 

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The individual filing the claim must provide the court with evidence that shows their need for support. A court will consider all the evidence and will determine whether relief should be ordered based on the specific circumstances of each person making a claim. 

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If the court decides that an individual is entitled to support, it will determine what the appropriate amount of that support is based on several factors, including:

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• the dependant’s assets (if any) at the time of the testator’s death

• the physical and mental health of the dependant

• the ability of the dependant to contribute to their own support

• the nature and length of the dependant and testator’s relationship

 

 

PASSING OF ACCOUNTS

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There is a general legal obligation for an estate trustee (like any trustee) to keep a complete and accurate set of accounts of the assets under the estate trustee's administration. Passing of accounts refers to the process of obtaining the court's approval of the accounts.

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An estate trustee must have the estate accounts approved by the court where:

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• there are minor beneficiaries

• there are mentally incapable beneficiaries

• there are unascertained or contingent beneficiaries

• a beneficiary challenges the actions of the estate trustee, or

• a beneficiary challenges the handling of the estate accounts by the estate trustee

 

A beneficiary can force the passing of accounts by obtaining a court order or an estate trustee can voluntarily apply to court for a passing of accounts. The passing of accounts can be a complicated task. All materials must be assembled and prepared in a precise format for use in court. These documents are then provided to the beneficiaries or to the Office of the Public Guardian and Trustee or to the Office of the Children’s Lawyer in advance of the court hearing.

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During an application for a passing of accounts, there is an onus on the executor to account for the estate funds, by showing how funds were spent and for what purpose. If the executor cannot explain why funds were spent, the court will likely draw an inference adverse to the executor that such funds were not spent on the interests of the estate. In that event, the executor will need to repay these funds to the estate.

 

 

TRUST VARIATIONS

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An estate trustee may not vary the terms of the trust unless the trust document specifically empowers them to do so or unless they obtain court approval to amend the document. If the trustee acts outside the scope of their authority without court authorization, they can be sued for breach of fiduciary duty.

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There are many reasons why a trust variation may be requested, including:

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• a dependent has sought relief against the estate and the trustee wishes to settle the claim

• a spouse has made an equalization claim under the Family Law Act and the trustee wishes to settle such a claim

• new legislation has been passed since the making of the will which requires revision to the testator’s wishes

• the terms of the trust are no longer consistent with the needs of the beneficiary​

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CERTIFICATE OF APPOINTMENT (PROBATE)

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A Certificate of Appointment of Estate Trustee with a Will (or Without a Will) used to be referred to as “Letters Probate.” The Certificate of Appointment is a process where the court reviews the Will and gives the court’s stamp of approval as to the authenticity of the Will and verifies your right to act as Estate Trustee.  The Application for a Certificate of Appointment should be filed with the Superior Court of Justice located in the county or district where the deceased had his or her permanent residence. If the deceased had no permanent residence in Ontario, the application is filed at the Superior Court of Justice in the county or district where the deceased’s property is located.  The Estate Administration Tax (formerly known as Probate Fees) must be paid when the Estate Trustee files an Application with the appropriate court. 

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The nature of the deceased’s assets will determine whether it is necessary to obtain a Certificate of Appointment of Estate Trustee. Assets such as corporate shares, real property (that is not owned in joint tenancy), insurance policies naming the estate as the beneficiary, and large bank accounts can all potentially trigger the need to complete a court Application but there are other instances as well. If this is the case, it will be necessary to prepare court documents, which we can have prepared on your behalf, to provide to the beneficiaries and to the court.

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These documents often include:

1. Application;

2. Notice of Application;

3. Original Will (if there is one);

4. Death Certificate;

5. Affidavit of Witness;

6. Affidavit of Estate Trustee; and

7. A cheque payable to the Minister of Finance for the Estate Administration Tax. 

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If the court accepts the information provided, they will then issue a Certificate of Appointment and you will have full authority to administer the estate and to deal with any financial institutions, services or business as may be required.

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If you have any questions regarding the Administration of an Estate, Certificate of Appointment or Estate Administration Taxes please do not hesitate to contact us.