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Thursday, January 3, 2013

Executor who helped himself to estate must pay punitive damages

One of the issues I hear about frequently from readers of this blog is out-of-control executors and trustees who don't seem to know or care about the rules they are supposed to follow. Sometimes the beneficiaries choose not to take action against these executors and other times they take the executors to court.

I've just read a case review that I'm going to share with you. It's a new case from Ontario where a man named his brother as executor of his estate, to look after the estate for the deceased's sons aged 12 and 16. The estate was not large, but the uncle squandered it and spent it. He didn't give the boys the personal belongings the father left behind. The boys ended up getting nothing of their father's. Instead of having their education paid for as their father intended, they had to take on debt to get through school. They sued their uncle.

This case is interesting because it goes beyond the usual remedies that are available against executors and trustees. Usually when an executor is behaving badly, he or she can be removed from the job, made to give up any executor fee, and made to pay legal costs. If things are really bad, the executor may end up paying for damages or losses out of his or her own pocket.

But in this case, the judge awarded punitive damages against the uncle. As the name implies, punitive damages are assessed against someone to punish them, much like a fine. They are relatively rare in estate litigation. In fact, the judge was so annoyed at the uncle's behaviour that he awarded double what the sons asked for (which was also more than double the full amount of the estate)! Click here to read the case of Walling v Walling.

I am so pleased with this case (and thanks to for bringing it to my attention). I'm glad that the courts are taking a hard line with executors who cause not only financial problems for the very people they are supposed to protect, but heartache and frustration as well.

Executors and trustees, listen up. Do the job you were named to do, or you too could end up on the hook for thousands of dollars.

1 comment:

  1. Critics of punitive damages believe that large monetary awards are unfair, unreasonable, and not productive for society. One of their central criticisms goes to the idea of punitive damages as "quasi-criminal" punishments. Noting that proponents talk of retribution and deterrence, these critics argue that it is unfair to impose these "criminal" fines on defendants who do not have the usual safeguards of Criminal Procedure.


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