July 4, 2023
In a recent article, we focused on how terminology can confuse even sophisticated people as to the difference between various sorts of trustees. That article emphasized the importance of understanding your role.
THE ISSUE
But should you agree to act?
THE CASE
If you are named as an estate trustee, you do not have to act but once you start to act, you have duties that may create liabilities. In a 2016 decision, Cahill v. Cahill, the Ontario Court of Appeal confirmed that this responsibility extends to an “inactive trustee”. In that case, there were two trustees, a brother and a sister, who owed duties to another brother. The sister allowed her brother trustee to manage the estate but when he mismanaged the estate, she was found equally responsible and had to pay the beneficiary brother for his losses since the trustee brother was insolvent.
TAKEAWAYS
If you decide to act as a trustee, you need to be aware of this risk and your responsibilities. If you attempt to resolve the estate without obtaining legal advice, thinking that you were saving money, you will miss out on value of legal advice. And it truly is a great value in this time of estate litigation.
One of the first things that an experienced estates lawyer will do with a new trustee client is make sure that you understand your rights, powers, and especially your responsibilities.
They will also walk you through the steps required to administer the estate, customizing the advice to the particular circumstances. Relying upon generic advice from the Internet, financial advisors, or family friends can leave you with knowledge gaps. In addition, internet advice is not always accurate, timely, or applicable in our jurisdiction.
Since 2016, there has been an enormous explosion in the amount of estate litigation seen by most Thunder Bay lawyers active in the field, including our law firm. Though some of these disputes are strictly between beneficiaries arguing over their entitlements, a significant number involved claims against trustees for failure to properly fulfill their responsibilities. Our article on “sibling rivalry” touches upon just a few of the issues that may arise.
Even if you perform your duties properly, you may become an “attractive target” of disappointed claimants. This may even include people who you count as friends or close relatives. They may be so impacted by the way the estate affects them that they are encouraged to sue you because they see no other road to recovery.
A FEW WORDS ABOUT PREPARING YOUR OWN WILL
One of the factors that you must consider when choosing your executor or trustee if you are doing your will or establishing a trust is whether that person is both capable and willing to act. You should always provide for an alternative executor or trustee but the same considerations apply in terms of their ability, availability, and willingness to perform the duties.
If finding one reliable trustee is difficult, finding a suitable alternate can be even harder.
This is just one of the many reasons why having a lawyer prepare your will has good value. Wills and estate lawyers have the experience and will take the time to assist you in considering your options to fit your particular needs. You cannot count on the same quality of personalized advice from a “will kit” or online form.
WHAT WEILERS LLP CAN DO TO HELP YOU
The wills and estates lawyers of Weilers LLP will explain things clearly to people making wills, to trustees, and to beneficiaries. They will help with:
- Selecting the right trustee who will carry out your wishes in a way that will not endanger your estate;
- Advising the trustee whether to act;
- Explaining the trustees’ duties; and
- If someone violates their duties, seeing that consequences will follow.
Selection of an estate trustee is an important aspect of estate planning. The experienced estate planning lawyers at Weilers LLP can assist you in making a wise choice.
In the event that the choice of estate trustee proves to be a problem, the estates lawyers at Weilers LLP work closely with our litigation team to find a solution, whether it is done on consent, an application to replace the trustee is required, or pursuing other legal or equitable remedies.
As an added bonus, Weilers LLP conducts a walk-in wills clinic on many Saturdays, where you can get assistance with wills and estates at your convenience. We understand that life is not 9 to 5.
Whether it is the preparation of a will, the administration of an estate, or estate litigation, if you need legal advice, give Weilers LLP a call and see if we are the right lawyers for you.