What happens if an executor wastes or mismanages estate assets in Ontario?

If an executor wastes or improperly depletes estate assets through neglect, poor judgment, or dishonest conduct, they can be held personally liable for the loss. The principal legal remedy is a surcharge — a court order requiring the executor to pay compensation from their own funds equal to the loss suffered by the estate.

Examples of conduct that can lead to a surcharge include: failing to insure and maintain real property so it deteriorates in value; leaving cash sitting idle without earning interest when reasonable investment was possible; selling assets at a significant undervalue; making speculative investments that lose money; or paying unauthorized expenses from the estate.

A beneficiary who discovers mismanagement must apply to the court. The court will examine whether the executor breached their duty of care and whether that breach caused the loss. An executor who can show they acted reasonably and in good faith — even if the outcome was poor — may not be surcharged. Good documentation of every decision is the executor's best protection.