In a recent Ontario decision, the court explained the purpose of and criteria for the appointment of an “estate trustee during litigation” in a family dispute over a large estate.
Testator Leaves Several Wills
The testator died at age 74 of heart failure. The last few years of her life had been marked by serious and debilitating medical problems and she had required daily care and assistance, much of which was provided by her husband of 50 years. The couple had a son and a daughter together.
The testator had inherited millions of dollars from her parents in the years prior to her death.
In 2008, the testator and her husband had made what are commonly referred to as “mirror wills”, which are virtually identical wills in which one person in a couple leaves their estate to the other in the event of their death.
However, while the husband had believed that the mirror will was his wife’s last will, in June 2020, their son told him that she had made two other wills in 2018 which reduced the husband’s entitlement to a bequest of $250,000 and a life estate in the matrimonial home on condition that he pay all the carrying costs. Additionally, the 2018 wills disinherited their daughter.
The son had applied for a certificate of appointment of estate trustee with a will.
The husband and daughter went to court claiming that the testator had made the 2018 wills at a time when she lacked testamentary capacity, that she did not have knowledge or approve of their contents, that they were made under suspicious circumstances, and were procured by undue influence. They also sought the appointment of an “estate trustee during litigation” (“ETDL”) in place of the son in anticipation of a resolution of the dispute.
In turn, the son claimed that the husband and daughter’s objections should be dismissed because they had not met the necessary evidentiary threshold to support their request. Additionally, the son contended that there was no need to appoint an ETDL.
Court Appoints “Estate Trustee During Litigation”
At the outset, the court found that the son’s evidence seemed to support his position that the 2018 wills were legally valid. However, the court noted that his evidence was not determinative and, as such, the court was not willing to end the husband and daughter’s challenge to the wills at the preliminary stage of the litigation.
Turning to the appointment of an ETDL, the court set out the criteria to be considered in making such a determination as follows:
- Whether a trustee may be a witness in the litigation;
- Potential for conflict of interest;
- Conflict between the interests of the trustees and/or beneficiaries;
- Hostility between the trustees and/or beneficiaries;
- Lack of communication between the parties; and
- Evidence of settlement discussions that exclude some of the parties.
Noting that the appointment of an ETDL is a discretionary decision, the court observed:
“[The son] has not been forthcoming with information about the estate’s assets, refusing even to disclose the entire limited will. It is also unknown what, if anything, he has done with the estate assets. Instead of transparency, there is opaqueness. I am not implying that he has acted improperly but, to ensure fairness to all parties, I have concluded that [an ETDL] should be appointed on an interim basis….
It is my expectation that [the ETDL] will be able to make the necessary inquiries and receive comprehensive information about the financial circumstances within a short period of time. He will report to the parties and they can, if so advised, bring a motion for further directions which would include a more fulsome evidentiary record. In my view, a judge will need this information in order to determine whether [the ETDL] should remain as estate trustee during litigation and what steps are necessary to preserve the assets of the estate pending a final resolution of the litigation.”
As such, the court ordered the appointment of an ETDL to manage the estate in anticipation of further litigation.
Estate disputes combine the complexity of significant financial assets with the emotional impact of the legacy of a loved one. At Campbell Litigation, our Waterloo-based estate disputes lawyers represent clients who seek to challenge or enforce a will, trust or estate, as well as those making or defending against claims for support from an estate where inadequate provision has been set up for a spouse, child or other dependent.
Launching a competency challenge or disputing the terms of an estate is often a matter that requires thorough investigation and testimony from independent experts in regards to the ability of the testator to make certain choices, as well as the legitimacy of the challenger to the estate. At Campbell Litigation, we help our clients understand the legal process involved in an estate dispute and the complex legal issues that may arise.
To obtain legal counsel in regards to your estates or trust issue, get in touch with a member of our team. You can call us at 519-886-1204 or contact us online.