An estate trustee owes a fiduciary duty to the beneficiaries of an estate. Beneficiaries have the ability to force the estate trustee to perform their duties and obligations according to the law in Ontario.
Duties
As a fiduciary, the estate trustee, is held to a high standard. Some of the key duties of an executor include:
- avoid conflicts of interest;
- treat the beneficiaries equally and fairly (the ‘even-handed rule’);
- administer the estate properly; and,
- administer the estate in a timely manner (generally one year, referred to as the ‘executor’s year’).
Disclosure
The general rule is that trustees must make available all documents related to the trust upon request by the beneficiaries because the beneficiaries have a right in the trust and have a right to maintain oversight of the trustee. However, there is a limit to disclosure and the courts have denied disclosure requests where it suspects that a beneficiary is going on a “fishing expedition”. Broad requests for disclosure suggest that a beneficiary is creating problems for the estate trustee. The court will often limit disclosure obligations only to “reasonable requests”.
Estate Accounting
One of the most important responsibilities of an estate trustee is to keep detailed records and receipts of all transactions involving the estate including a detailed list of the assets of the deceased and the values of those assets on the date of death.
A residual beneficiary is entitled to know full details of the administration of the estate. If information is not provided voluntarily or is inadequate, an estate trustee can be required to answer to a judge on a passing of accounts.
It should be noted that an estate trustee does not have a duty to provide accounts (or detailed expenses and receipts) to beneficiaries at each step of the estate administration. Beneficiaries do not have the right to control the administration of the estate or the estate trustee, and the estate trustee does not have an obligation to provide estate accounts within the first year after the death, nor do they have an obligation to consult with beneficiaries or get their approval or provide beneficiaries with copies of expenses on a real time basis.
Failure to Perform Duties – What Next?
Ultimately, the only way to force an executor to perform properly is to go to court. Generally, it is relatively straightforward to commence proceedings on behalf of beneficiaries to force the executor to act and fulfill their duties; however, much depends on how the executor responds to the proceedings. In the majority of cases, executors suddenly become much more active when they are confronted with a reasonable court proceedings by the beneficiaries to enforce their rights.
If you are facing difficulties with an executor – we can help! Please contact us for a free initial consultation.