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Monday, December 17, 2012

Weak claim against the estate could cost you big time

"Gone are the days when the costs of all parties are so routinely ordered payable out of the estate that people perceive there is nothing to be lost in pursuing estate litigation". So said Ontario's Court of Appeal in the case of Smith Estate v. Rotstein earlier this year.

In that case, a woman challenged her mother's will on the basis that the deceased lacked testamentary capacity (i.e. didn't know what she was signing) and was unduly influenced into making the will. The woman's brother was the executor and was forced to defend the will. By the time the case made it through two levels of court, his legal bills were over $700,000.

The judge said that there was so little evidence supporting the woman's claim that she should never have brought the case in the first place. And if she had brought the case in good faith, she should have dropped it early on once she saw all of the evidence. However, the woman stubbornly carried on with the lawsuit, apparently thinking that the costs wouldn't matter because the estate would pay them.

She had a nasty surprise. The judge made her responsible for the brother's costs of $700,000, as well as $30,000 in disbursements. Ouch!

This should be a major heads-up to anyone who is thinking about bringing a weak lawsuit against an estate for emotional reasons. Yes, it's tempting to make the executor stop and pay attention to your issues. Yes, it's tempting to vent your emotions this way. And yes, you may even have heard that when estates end up in court, the estate pays all the lawyers. But this case makes it clear that pointless litigation just for spite won't be tolerated. The free ride for will contests is over. Unless there is strong evidence to back up your claim, don't count on the estate paying your lawyer.

1 comment:

  1. Here is a question about a person who chose to self litigate on behalf of the estate.
    A beneficiary brings an action to the court to have the accounts passed by the revoked agents and attorney. He goes to court twice. The judge orders a complete accounting to chartered accounting standards. The testator dies. The named executor, by second choice proceeds to probate the will.
    The self litigating beneficiary again goes to court to caveat the estate to protect it since all of the accounting ordered by the judge had not been provided. The revoked agents appoint a defense lawyer to come to court to argue that the caveat should be lifted but he judge ruled another three month caveat extension. This also was ignored so the self repreented beneficiary brought an application for another extension for six months and an application for contempt. The self represented beneficiary applied to have the executor removed. The judge ordered a full day in court for the contempt issue and the matter of removing the executor and installing the self represented beneficiary.
    All of the five times in court were on behalf of the estate. Can the beneficiary who appeared in court charge the estate for the time representing the estate?


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