During estate planning, a testator takes care in appointing a trusted individual to be the executor or trustee of their estate. However, some executors fail to perform their duties in accordance with the Will or trust. As a beneficiary, it can be frustrating to watch and wait as the executor fails to administer the estate as directed. While certain processes or incompetence in an estate’s administration may prolong the distribution, other times, executors may intentionally create delays or abuse their power.
Estate administration delays can impact beneficiaries as assets may change in value over time, maintenance costs can accumulate, and the estate’s overall value can drop significantly. Asset distribution may also not be performed fairly and efficiently.
In certain circumstances, the courts in Alberta may consider removing the executor of an estate if there is evidence that the executor has failed to fulfil their duties or has not acted in the estate’s best interest. The court will not take the decision to interfere with the deceased’s choice of trustee lightly but will act to protect the best interests of the estate and its beneficiaries.
Circumstances Giving Rise to Removal
An executor of an estate could be removed for a variety of reasons. In Broder Estate (Re), the Court of Queen’s Bench for Alberta set out the following examples of misconduct which could result in an executor or trustee’s removal:
- breach of trust or fiduciary duty to the beneficiaries or the estate/trust;
- the inability to act impartially;
- personally benefitting from the trust/estate (conflict of interest);
- mismanaging estate/trust assets; or
- showing unwillingness to carry out the specified terms of the estate/trust.
Duties of an Executor or Trustee
In Warren Estate (Re), the Court summarized the “canons of trusteeship” as:
- The trustee shall obey the directions of the settlement or trust instrument unless the Court authorizes changes or the beneficiaries consent to them;
- The trustee shall act impartially between beneficiaries;
- The trustee must exercise ordinary care and prudence;
- The trustee shall be loyal to her trust by not trafficking with her trust and shall not profit by her administration or permit her interest to conflict with that of the trust; and
- The trustee shall be ready with her accounts.
The Court went on to state that:
“Troubling conduct includes failure to take steps that concern the assets comprising the estate… Such conduct may lead the court to conclude that the executor will be unable to fairly and even-handedly administer the estate, as it demonstrates a want of proper capacity to execute the duties, or a want of reasonable fidelity justifying removal.”
Applications Under the Estate Administration Act
Under the Estate Administration Act of Alberta, a beneficiary may apply to the court to remove an estate executor if the court is satisfied that the executor has failed to, or has refused to, perform a duty or core task in the administration of an estate.
Section 8 of the Estate Administration Act provides the Court with a variety of remedies, including:
- ordering the personal representative to provide the notice or to perform the duty or core task;
- imposing conditions on the personal representative;
- removing the personal representative;
- revoking a grant; and
- making any other order that the Court deems to be appropriate.
The case of MacDonald Estate (Re) confirmed that the Court of Queen’s Bench has both a statutory power to remove an executor and, as a Court of Equity, an inherent power to remove and replace a trustee.
Decision to Override Testator’s Choice of Trustee Not Taken Lightly
Overriding a testator’s choice of executor is a sensitive matter and is not exercised lightly by the courts. For a court to order the removal of an executor, there must be evidence of serious maladministration by the executor.
In considering an application to remove an executor or trustee, courts must determine whether allowing the executor/trustee to remain in their role would jeopardize estate assets and put the welfare of the beneficiaries at risk.
Executor Failed to Comply With Court-Imposed Deadlines
In Schnurerer Estate (Re), the beneficiaries of an estate believed that the executor was taking too long to complete the administration of the estate. As a result, they applied to the Court of Queen’s Bench of Alberta on October 4, 2019, seeking the removal of the executor from their duties. The Court ultimately chose not to remove the executor. However, it instead imposed strict deadlines for completing various estate administration steps. Justice Lema also gave the applicants leave to re-apply to the Court for the executor’s removal if the executor did not comply with the deadlines.
On October 22, 2019, the beneficiaries reapplied to the Court, asking that the executor be removed due to missed deadlines. The executor claimed she had a family emergency and sought a deadline extension. The Court noted that the executor took almost 16 months to prepare and file the application for probate and delayed selling the house, resulting in lost value to the estate. Further, the Court considered that the executor was expressly cautioned about these delays through the October 4, 2019 order. Justice Lema ultimately found that the executor was deficient in her duties and ordered that the executor be removed to ensure future efficient administration of the estate.
Contact DBH Law Estate Lawyers in Calgary For Assistance With Estate Litigation
The knowledgeable estate lawyers at DBH Law have extensive experience advising clients on estate planning. We also provide skilled advocacy for clients involved in estate litigation, including matters involving an executor’s removal. We advise beneficiaries and executors on their options and take swift action to protect their rights.
Conveniently located in downtown Calgary, DBH Law serves clients throughout Alberta. To speak with a member of our team, call 403-252-9937 or reach out online.