What is a conflict of interest for an executor in Ontario and how should it be handled?

A conflict of interest arises when an executor's personal interests diverge from their duty to act in the best interests of all beneficiaries. Common examples include: an executor who is also a creditor of the estate and wants to be repaid before other creditors; an executor who wants to purchase an estate asset from themselves at a self-set price; or an executor who has a personal dispute with one of the beneficiaries and uses administrative delays as leverage.

Ontario courts have consistently held that an executor must not place themselves in a position where personal interest conflicts with fiduciary duty. If a conflict cannot be avoided, the executor has an obligation to disclose it to all beneficiaries and, ideally, to obtain their informed consent or step aside from the conflicted decision.

Failing to disclose a conflict, or acting on one secretly, is a serious breach of fiduciary duty. It can lead to the court setting aside the executor's decision, ordering a surcharge, or removing the executor entirely. An executor who discovers a potential conflict should immediately consult a lawyer before proceeding.