Most executors perform their duties with integrity and dedication.
But when an executor doesn’t uphold his duties, a beneficiary may want to remove him. We detail the criteria to do so, and the likelihood of his efforts succeeding.
Neither easy nor quick
Allison McDonald, associate at Brownlee LLP in Edmonton, Alta., says removing an executor doesn’t happen often. “The courts generally don’t want to interfere with the testator’s choice as to who the executor is.”
But when the issue comes up, McDonald says, it’s typically part of a broader conflict; for instance, beneficiaries may be contesting an estate.
She acknowledges that the removal process is difficult and can take months. Beneficiaries need to file formal legal documents to the court, along with accompanying affidavits outlining the reasons for removal. The executor’s counsel will respond to those documents, with lawyers questioning the affidavits of various parties. The issue is then argued in front of a judge, who will review evidence and determine whether the executor should be removed. “It could be months [or] years before an estate is fully resolved or an executor is actually removed,” McDonald says.
If the court decides in favour of removal, it will appoint someone else to act as executor. “It could be the person making the application, or the [beneficiaries] may agree to an independent party, like a trust company, to finalize the administration,” McDonald says, adding it’s usually the latter since, in these situations, beneficiaries may already be at odds.
Randy Sandbeck, a partner with Olive Waller Zinkhan & Waller LLP in Regina, Sask., says that when a beneficiary threatens to remove an executor, he’s often expressing frustration at how the current executor is performing the job.
“I’ve seen it threatened when the beneficiaries just aren’t happy with the speed [of distribution],” Sandbeck says. “They’re saying, ‘This administrator is not acting quickly enough, they’re not getting me my things, they’re not responding quickly enough.’ ”
But courts typically take a dim view of such arguments. “There has to be some sufficient cause. And that isn’t just some mistake or delay. It has to be something that really would impair the trust, frustrate the administration or put the beneficiaries at risk. Those are the elements that a court is going to look at.”
Sandbeck has noticed an increase in allegations of conflict of interest against executors. Such allegations typically revolve around Supreme Court decisions (e.g., Madsen Estate v. Saylor; Pecore v. Pecore) that establish the presumption that parental assets held jointly with adult children are actually held in trust, rather than being an outright gift. Such a presumption may force executors to choose between their personal interests and their duty to the estate.
“If the executor is one of the adult children and had some property jointly with mom or dad, there’s a presumption of a resulting trust in favour of the estate,” Sandbeck explains. “If they [the executor] don’t accept that and they try to disprove it, they’re in an awkward position.”
It’s unclear whether courts would consider such a conflict to be sufficient cause to automatically remove an executor. Sandbeck says the issue is a relatively recent one, and precedent is still developing.
Because of the complex nature of trying to remove an executor, Sandbeck stresses that beneficiaries need to know what they’re getting into before taking the issue to trial.
“It’s fairly serious litigation,” he admits. “Sometimes costs get very significant. It’s hard for any lawyer to tell you up front because you don’t know exactly what it’s going to take. Is the removal of the executor combined with an attack on the will? And if so, is there medical evidence that has to be called?”
McDonald says beneficiaries should avoid bringing the issue to trial. “I would recommend trying to mediate, or trying to resolve any conflict,” she says. While mediation is by no means free—she says mediators are often senior lawyers who charge around $450/hour—the process can often be much faster than litigation.
“I advise clients that if they’re going to court, there’s no guarantee what the outcome will be,” she says. “It’s better [to] work together to come to some sort of resolution. You may not be completely happy, but at least you were part of the decision.”
Reasons for a court to remove an executor
- Fraud or gross misconduct
Beneficiaries are typically required to provide extensive evidence and documentation.
- Endangering estate assets
Evidence will need to be persuasive and well documented.
- Failure to maintain an “even hand”
This is where executors have shown deliberate bias for or against certain beneficiaries.
Beneficiaries would have to show there’s been a danger to estate property.
An executor would have to be bankrupt at the time the job starts, or become bankrupt during the estate’s administration.
- Failure to distribute assets
If the executor fails to distribute estate assets within two or three years, this could constitute grounds for removal.
Originally published in Advisor's Edge
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