Can a Beneficiary Remove a Trustee of a Family Trust in Ontario?

You are a beneficiary of a family trust and you are worried about how the trustee is behaving. Perhaps you are not getting information, payments are delayed, or you suspect the trustee is putting their own interests first. You want to know whether you can have the trustee replaced.

This article explains the general picture in Ontario: the practical steps that usually come first, what a court can be asked to do, and alternatives to removal. Whether removal is realistic in your case depends on the trust document and the facts, so a lawyer should confirm.

What a trustee is expected to do

A trustee is the person who holds and looks after trust property for the benefit of others. For an estate, the estate trustee must collect assets, pay taxes and debts and distribute the remainder according to the will and the law.

Family trusts set up during someone's life, called inter vivos trusts, are any trusts that are not testamentary trusts. A testamentary trust is generally created on and as a result of a person's death. The type of trust can affect which steps are open to you, so find out which one you are dealing with.

Start with information and records

Before thinking about removal, most people first try to understand what has actually happened. Asking politely and in writing for the trust document, financial statements and account records is a sensible start, and it creates a record if the dispute goes further.

Where a child or unborn person has an interest, the Office of the Children's Lawyer can ask an estate trustee for accounts and supporting records. If the trustee does not respond or the accounts raise concerns, it may ask the court for an order requiring the trustee to bring an application to pass accounts. Passing accounts is a court process in which the trustee's accounts are reviewed, and the Office of the Children's Lawyer must be served on an application to pass estate accounts where a minor or unborn or unascertained person has an interest.

Can the court replace a trustee?

Whether a court can be asked to replace a trustee in your situation depends on the facts and the trust document. The legal test, what you must prove, and what the court considers when deciding between removal and other remedies are worth confirming with a lawyer.

A court may also appoint an estate trustee where there is no will, no trustee named, or the named trustee asks for confirmation. That is a different situation from removing a trustee who is already acting, but it shows the court's role in making sure someone is in place to administer an estate.

• Complaints that may be raised: not providing information, not keeping proper accounts, mixing trust money with personal money, or favouring oneself over other beneficiaries.
• The trust document may name who can replace a trustee, which can be quicker than going to court.

Alternatives to removal

A sole competent adult who is absolutely entitled can collapse the trust. If some beneficiaries have only contingent interests, or are minors, this route is generally not available.

What to do next

Cost and family relationships are real factors. A court process can be slow and expensive, and an unsuccessful challenge can leave you worse off, so have a lawyer assess the strength of your concerns early. Time limits can apply to legal claims, so do not wait too long to get advice.

• Get a copy of the trust document and any amendments.
• List your specific concerns with dates and amounts.
• Request accounts and records in writing and keep copies.
• Save emails, letters and bank statements.
• Do not take trust property or confront the trustee in ways that could hurt your position.
• Book advice from a lawyer who handles trust disputes before filing anything.

Frequently asked questions