Assisting you with the important responsibility of carrying out the terms of a trust.
A trustee has the important responsibility of carrying out the terms of a trust. We routinely advise both institutional and individual trustees in estate cases and many other matters involving all kinds of trust agreements.
Estate Trustee Disputes
Must You Assume The Position?
An executor named in a will is not required to assume that position, however, once he or she has begun to fulfill those duties then that person is obligated to fulfill all of the duties arising from the appointment. If you have been appointed to act as the personal representative of an estate and do not wish to assume that duty, you may renounce your entitlement to act as the personal representative and file that renunciation with the court. However, once a Certificate of Appointment has been issued by the Court, a personal representative may only be discharged of his or her duties by court order.
Disputes Regarding Distribution of Assets/Estate
Questions can arise over how a personal representative or trustee disburses assets and manages the estate. These disputes typically occur over issues of appropriate compensation. The compensation of an executor or trustee for the services and management they provide can seem excessive to the beneficiaries. Alternatively, because of long-time family tensions, beneficiaries may be unwilling to accept that a portion of the estate assets will be paid out to the personal representative of the estate as compensation. Such disputes can be costly and contentious. A careful balance between appropriate and excessive compensation is often difficult to negotiate, especially where it is not specifically addressed in the will.
Discharging a Personal Representative or Trustee
Less frequently, beneficiaries of wills and trusts may seek to have the personal representative or trustee discharged of duties and removed from office by reason that the estate or trust has been grossly mismanaged. Moreover, a removal order may be sought by a trustee who is unable to work with a co-trustee or cannot resolve a fundamental disagreement about the management of the estate.
Varying a Trust
A trustee is responsible for carrying out the terms of a trust as they are laid out in the trust document. However, circumstances may arise where it is advisable to vary the terms of a trust. Often a trust document does not grant the trustee authority to do this.
In Ontario, where all persons who are absolutely entitled to the trust assets, have requisite capacity, are 18 years of age or older, and agree, the trust can be varied or concluded. Otherwise, a trust may be varied in several other ways.
Where beneficiaries of a trust are not able to provide consent to a variation or termination of a trust themselves, as a result of being minor, or other legal disability, the court may approve a variation of the trust on behalf of the minor or person under legal disability. The court will only vary the trust in accordance with Ontario law where there is a benefit to all persons on whose behalf the court is being asked to provide consent.
In Ontario, the Office of the Children’s Lawyer represents the interests of minors and unborn potential beneficiaries of a trust. A variation order requires the support of the Office of the Children’s Lawyer.
The court has jurisdiction to aid in the preservation of the trust and to support the administration of the trust assets by trustees. Consequently, where questions arise about the administration of a trust, a trustee may make an application to the court at any time for the advice and direction of the court.
For assistance with your trust litigation enquiry, please contact Terri Garrett by email or 613.544.0211, ext. 8058.