How to Change an Estate Trustee in Three Easy Steps
Published on 29 August 2022, 07:22:56 AM
Before Frankie died, he appointed his older brother Ted as his estate trustee. Their sister Cait was dumbfounded. Ted liked to drink and play the tables in Vegas. Settling Frankie’s estate has been dragging on for two years now. Ted brags about spending Frankie’s money. Cait wonders how much is actually left. She plans to ask the court to make a switch.
Appointing the Right Person as Trustee
No question about it, being an estate trustee is complicated. The trustee must be reliable, communicate well and be financially savvy to wind down the deceased’s personal and business affairs. Trust is paramount.
Can the Estate Trustee Handle Responsibility?
The more complex an estate is, the more likely the trustee will need to hire other professionals like lawyers or tax accountants to assist. They will have to go to probate court and keep accurate records. They may be called upon to invest the deceased’s money wisely while the estate is in probate. Estates can take months or years to conclude. Is Ted up for it?
There Will be Consequences
With great responsibility go consequences. Estate trustees can be legally liable for poor decisions or sued by heirs unless they act in good faith and with integrity. Ted owes a duty of care not only to Frankie, but to Cait and other beneficiaries.
Grounds for Changing an Estate Trustee
Courts may remove a trustee who is:
- bankrupt or insolvent
- commits a crime
- incapable because of age or illness
- can’t produce records or accounts
- benefits personally or has a conflict of interest
- takes compensation too soon
- isn’t impartial or objective.
Cait Goes to Court
Cait knew Ted hadn’t paid Frankie’s debts and didn’t know how much his estate was worth. GICs in Frankie’s bank account had been cashed. Where was the money? In court, Cait provided evidence Ted:
- failed to provide a proper accounting, by not getting a timely valuation of Frankie’s assets
- failed to act in the estate’s best interests, by taking too long to wind up Frankie’s affairs (a year is average)
- was in a conflict of interest, by paying himself fees to manage the estate before it was concluded
- and breached the beneficiaries’ trust, by not acting in good faith and with integrity. The GICs sealed the deal.
The court agreed Ted’s actions (or inaction) clearly endangered Frankie’s estate. He simply lacked the proper capacity, skill or integrity to be trustee.
Three Easy Steps to a New Trustee
Cait replaced Ted by:
- Applying to Ontario Superior Court of Justice. Section 5 of the Ontario Trustee Act allows anyone with a financial interest to request an estate trustee be removed, replaced or not appointed.
- Having the accounts passed to the court. Ted had to produce all of Frankie’s financial accounts and records showing his actions as trustee.
- Asking the court to appoint her. Ted still inherits, but first Cait is having what’s left of Frankie’s assets tallied up.
Legal Advice on Removing a Trustee
Courts don’t act lightly. Ask Axess Law’s wills and estates lawyers for advice before you proceed. Call toll free to 1-877-552-9377 or 647-479-0118 in Toronto or use our online booking form to make an appointment. Lawyers are available 7 days a week, at times convenient for you. We can meet in person, by phone, email or remote video call.
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