Are you now or have you ever been…

January 13, 2023

By Fhara Pottinger

…an estate trustee, an executor, an executrix, or a plain old trustee?

THE ISSUE

The modernization of legal terms to keep pace with the modernization of the English language is a good thing, but you need to be wary of unintended consequences. Some of the changes, while effective for many purposes, may create added confusion. Being a trustee, by any term, is challenging enough without adding to the situation through confusing terminology.

The terms “executor” and “executrix” are archaic language which many people have difficulty understanding. It is also better to be able to use one non-gendered term rather than the two words for the same role. From that viewpoint, replacing “executor” and “executrix” in wills and estate administration documents with the term “estate trustee” makes sense.

The difficulty is that even archaic English words often have a substantial and well-established body of law that interpret them. Perhaps this is true in the law of wills and estates more than any other area.

Unfortunately, if you find yourself in this role, you run the risk of losing sight of the different roles you might have at different stages. It is harder to get your head around the difference between an estate trustee and simply a trustee than between an “executrix” and any other sort of trustee.

Why is this important?

Even when the estate has been administered, and the estate trustee’s duties are complete, that same person may remain a trustee of some of the assets remaining to be transferred to the beneficiaries. They therefore remain subject to all the duties and liabilities of a trustee, even though they are no longer an estate trustee.

This principle is so well established that the leading case goes back to 1913 when in Attenborough & Son v. Solomon, the United Kingdom House of Lords overturned a judgment in favor of a pawnbroker who had taken the pledge of a silver plate as security for a debt; the plate had been directed to be divided equally between the deceased’s four children. One of those children, as trustee, retained possession of the silver plate, although the accounts of the estate had been passed and therefore the estate executors had been discharged from their duties. Both the pawnbroker and the wrongdoing trustee argued that once the executors duties were finished, there was no fiduciary duty owed to the beneficiaries or the estate.

The House of Lords, at that time the ultimate appeal court in the United Kingdom, reversed the Court of Appeal decision in favor of the pawnbroker. The court ruled that the silver plate had become vested in the wrongdoer as a trustee.

The fiduciary duty of a trustee prevents them from using assets of the trust for their own benefit which is what happened in this case. Although the trustee had legal title to the silver plate, he was not the true or beneficial owner of it but rather shared that ownership with his siblings. His pledge to the pawnbroker violated that duty. From the pawnbroker’s perspective, a trustee cannot transfer more property than they own in an asset. The true owners are entitled to bring in action for the recovery of the silver plate.

Although Attenborough is a United Kingdom decision, the same principles apply in Canada, including in Ontario. Despite its age, Attenborough is still relevant, having been applied in 1996 – not a long gap as you might think. Things move slowly in the law of wills and estates.

TAKEAWAYS

When we use the term “estate trustee”, we risk creating more confusion rather than less, and the person in Solomon’s shoes may be less likely to appreciate their ongoing responsibility as a trustee on behalf of the beneficiaries after they cease to be an estate trustee. It was difficult using the archaic language, but new language should make it more clear, not more confusing.

WHAT WEILERS LLP CAN DO TO HELP YOU

The wills and estates lawyers of Weilers LLP are not confused by archaic words or modern language. They will explain things clearly to people making wills, to trustees, and to beneficiaries. They will make sure that if someone does violate their duties, consequences will follow.

If it is necessary to bring an action, the litigation team at Weilers LLP is well experienced in estate litigation and becoming more experienced every day, as this area of litigation is unfortunately a growth area.

If you need your will prepared or your estate administered by experienced and knowledgeable lawyers, Weilers LLP is an excellent choice. We have the good fortune of having Brian Babcock, the instructor in the law of trusts at the Bora Laskin Faculty of Law, as counsel to the firm.

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.