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Sunday, February 3, 2019

The court decided not to remove these executors - for practical reasons

Many beneficiaries who are critical of an executor's administration of an estate (either rightly or wrongly) will sooner or later consider the idea of having the executors removed from their role. I certainly hear this suggestion frequently, and I assume that other estate litigators do as well.

Removing an executor who doesn't want to be removed isn't easy. It has to be ordered by a judge after a full hearing of the issues and allegations. Judges always start that process by acknowledging that the decision to remove an executor cannot and should not be taken lightly. This is partly because the testator who made his will named the executor(s) he wanted and the court will try to uphold the testator's wishes.

But beyond that, what does the court look at? The consideration that is first and foremost is the question of what is best for the estate and the beneficiaries. This is where a hearing gets into the details of exactly what the beneficiaries believe the executor is doing wrong, and why it's wrong. I've recently come across a newer case from my own jurisdiction called Henley Estate, in which the court looked at this very issue and gave a wonderfully practical decision.

In this case, there were four executors of an extremely complex, valuable estate. All four were the children of the deceased, and as anyone could have predicted, they could not all agree on how to administer the estate. They managed to deal with several assets, and they were four years into the estate before they gave up. There was an application made to remove all of them as executors and to put the Public Trustee in as a neutral administrator.

Nobody alleged any theft or fraud on the part of the executors. The real issue was an allegation that two of the executors were holding things up because they wanted to interpret one clause of the will in a way that favoured themselves. In other words, instead of being neutral and fair to all, as executors were supposed to do, it was alleged that they were looking out only for themselves. This ended up in a deadlock that couldn't be broken. While this can be a ground for removing an executor, in this case the court did not remove them.

Instead, the court looked at the practicalities of the situation. Changing administrators at that late stage of the estate would cause delays and extra costs. And, said the judge, with everyone still fighting, the Public Trustee would end up coming back to court for assistance and direction on issues anyway. In other words, removing the executors wouldn't help and would only hurt the estate as a whole.

The reason I like this decision is that clients often go to see their lawyers because they want someone removed as executor based on a legal principle. The executor has screwed up and now must be removed. But when I ask a client what happens after the executor is removed, there is generally silence. Nobody has thought about the practical matters, only the idea of giving someone the boot. Legal principles are essential, but they don't exist in a vacuum.


7 comments:

  1. Excellent and informative post.

    I wish the same applied to lawyers who 'get off the record' with little or no investigation. Small town justice? TBC

    Webeye

    ReplyDelete
    Replies
    1. I've seen a number of cases where a judge has refused to allow a lawyer to get off the record because it would leave a person or an estate in a bad situation. It always depends on the facts of the case. But you're right, there is generally no investigation when a lawyer asks to be taken off the record; we are officers of the court so the court expects us to tell the truth when we are explaining a situation.

      There are also provisions written into the lawyer's Code of Conduct that disallow us from even asking to get off the record if it leaves someone in jeopardy (for example, right before a client has a court appearance). We can be disciplined by our licensing body if we disregard the Code of Conduct.

      Lynne

      Delete
    2. Lynne

      This 'very' helpful. Not many lawyers would share this information. Something extra, that I can use.

      Webeye

      Delete
  2. I was booted out. The judge met with beneficiaries in absentia.O the pretense of our accounting which was never accepted and I was found in contempt. On his reasons for removal he first started with before my mother died there was hostility. I have no idea what he is talking about.
    3 lawyers later none of them put in a defense.
    New executors added their passing of accounts on our submission.
    Forensic audit which judge said was not done properly but she based her findings on it. I am now liable for everything. No lawyer will or would touch it.
    Should have been held in different region.
    Cannot afford lawyer
    Rules of civil procedure broken right from get go.
    There is no justice although judge kept saying I would be able to get my chance.
    Saved the estate over 300000. But no one cares.
    My health is ruined. But I know I did nothing wrong. I did as my Mom wanted

    ReplyDelete
  3. @curious. Who was the female judge? What city?

    ReplyDelete
  4. Quick duffrin
    Question..during probate is the executor supposed to notify beneficiaries prior to? And what if you think you haven't been given copies of the full will?..

    ReplyDelete
    Replies
    1. Prior to what? I assume you mean applying to the court for probate?

      I don't know of any jurisdiction where the executor has to notify the beneficiaries before applying. In some provinces, the executor is required to give notice to them at the time they make the application. In other provinces there are no rules at all about giving notice to beneficiaries.

      I assume by "the full will" you are saying that you received a will but a page or pages are missing. If that's the case, ask the executor for a new copy. Or wait until the will is probated and get a copy from the court.

      Keep in mind that beneficiaries who are receiving a specific gift and not a share of the residue are routinely given only the part of the will that mentions their gift. They are not entitled to see the whole will so some executors send only the page or perhaps even the one paragraph that mentions that beneficiary. That might explain why you didn't get the whole thing.

      Lynne

      Delete

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