What counts as executor misconduct in Ontario?
Executor misconduct can come up when an executor does not handle the estate properly, and on a passing of accounts a judge can inquire into any complaint by an interested person, including misconduct or neglect causing loss, and may order payment to the estate.
Examples include an executor taking compensation early without the agreement of all interested persons who are sui juris, court approval or permission in the will. Another is paying expenses that were not properly incurred in carrying out the trust, which the court may disallow. Another is investing without the care, skill, diligence and judgment of a prudent investor. Failing to keep accurate records of the assets and transactions is a further example. A beneficiary who is left without answers can move for an order requiring the executor to pass accounts.
Remedies depend on the facts. A court may remove an estate trustee on any ground on which it could remove another trustee. Separately, a court may relieve a trustee from personal liability for a breach of trust if they acted honestly and reasonably and ought fairly to be excused. Because every case turns on its own facts, speak with a lawyer before you accuse anyone.
Key takeaways
- On a passing of accounts, a judge can inquire into any complaint by an interested person, including misconduct or neglect causing loss.
- Taking compensation early without agreement, court approval or permission in the will is one example of improper conduct.
- The court may disallow an expense that was not properly incurred in carrying out the trust.
- A court may remove an estate trustee on any ground on which it may remove any other trustee.