THE BLOG

Picking the Right Estate Trustee Today Saves You Trouble Later

04/08/2015 05:36 EDT | Updated 06/08/2015 05:59 EDT
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A senior citizen signing a document.
Removing an estate trustee from office can be an onerous task.  It requires the involvement of a court, even if it is not contested.  This can be costly, time-consuming, and disruptive to the administration of an estate and to the beneficiaries. 

It is best to avoid this process altogether by picking the right person for the job at the planning stage. By choosing an appropriate individual who is prepared to take on the role, a testator can prevent issues with the estate trustee in the future. Estate planning professionals are responsible for advising testators to choose estate trustees that are ready and willing to act.

Where the need for the removal of an estate trustee cannot be avoided, proceedings can be contentious -- brought by interested parties dissatisfied with the estate trustee's conduct -- or non-contentious, brought by the estate trustee for his or her own removal. In a non-contentious situation, an estate trustee is often willing to step aside and the reason(s) provoking removal may be no fault of their own. An example is if an estate trustee is tasked with dealing with a deceased person’s exotic and valuable collection. It may be something that they have no expertise in and do not feel comfortable dealing with. Another common example is where the estate trustee's health becomes an issue.

In these non-contentious situations a court order is still required. The removal of personal representatives is dealt with under section 37 of the Trustee Act, which in subparagraph (1) states:

The Superior Court of Justice may remove a personal representative upon any ground upon which the court may remove any other trustee, and may appoint some other proper person or persons to act in the place of the executor or administrator so removed.

If the estate trustee is appointed solely, there must be a replacement or alternative arrangement put in place by the court. When the estate trustee is willing to walk away, the proceedings can be quite straightforward and the beneficiaries will often provide the estate trustee with a release.

The situation is more complicated when a proceeding for a removal is contentious. Usually a beneficiary or co-estate trustee will ask the court to remove the trustee, who does not want to renounce the position and opposes removal. In this situation, the individual seeking the trustee's removal again will usually nominate a replacement for the estate trustee.

Generally there is a bias on the part of the court to respect a testator’s choice of trustee. Even so, judges are always tasked with reacting to the facts at hand in any given situation. Anyone requesting removal of a trustee is required to show why he or she is not appropriate for the job.

The process of having estate trustees removed involves having affidavits sworn which truthfully and in detail set out any disruptive or disturbing behaviour by the trustee that threatens the administration of the trust. Detailed affidavits help the court and the parties hone in on the issues at stake and any contentious aspects. Of course, examples of prior cases in which estate trustees have been removed should be presented to the court if they bear similarity to the case at hand.

In contentious proceedings, the estate trustee may refrain from backing down and often reacts to affidavits with denial or explanation. They may also place blame on the conduct of the beneficiary, rather than accepting responsibility for issues that have arisen.  Mere friction or disagreement between estate trustee and beneficiary will not always be enough grounds for the trustee's removal.

As a whole, litigation involving the removal of an estate trustee can be very personal.  In particular, nasty conduct by a trustee towards a dissatisfied beneficiary may lend credibility to the argument for his or her removal.  Parties would be wise to control emotional reactions throughout the process.

The best strategy for an estate trustee who is being asked to step aside, is often to simply accede to the demand.  A drawn-out battle over the removal of an estate trustee does little good for any of the parties involved.

*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.

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