Executor Conflict of Interest in Ontario: Examples and Remedies

Many executors are also family members and beneficiaries. That is normal, but it can leave you wondering whether the person running the estate is looking after the estate or after themselves.

This article explains, in general terms, what a conflict of interest looks like for an estate trustee in Ontario, how it can show up in practice, and what a beneficiary can do about it. Every estate is different, so a lawyer can tell you how this applies to yours.

What a conflict of interest means for an executor

An executor holds the estate's property as a trustee for the people entitled to it and for the payment of the deceased's debts. A conflict arises when the executor has a personal stake in a decision that should be made only for the benefit of the estate.

Having an interest is not automatically wrong. Someone named in the will can also be a beneficiary. The concern is how the executor handles decisions where their own gain and the estate's interest do not line up.

Common examples

• Taking fees. An estate trustee is entitled to a fair and reasonable allowance for care, pains, trouble and time spent, and the statute sets no percentage or formula. A conflict can arise because the executor is deciding how much to pay themselves. The exception is where the will itself fixes the allowance.
• Buying or selling the house. The personal representative may sell real property to pay debts and to distribute the estate. A sale made only to distribute the estate needs the approval of the majority of the persons beneficially entitled, with the Children's Lawyer approving for minors and the Public Guardian and Trustee for mentally incapable persons, though a judge may dispense with the beneficiaries' concurrence. An executor who wants to buy the property themselves should expect close scrutiny and should not do it quietly.
• Paying expenses. An estate trustee who believes an expense is properly incurred may pay it from the estate or pay it personally and recover it from the estate, but the court may later disallow it. Mixing personal and estate spending is a common source of disputes.
• Investing. In investing estate property, a trustee must use the care, skill, diligence and judgment of a prudent investor. Using estate money in a way that helps the executor rather than the estate raises concern.
• Deadlock and delay. Disputes between co-executors, or an executor who stalls the estate, can be taken to court for directions.

Some of these points, such as an executor buying estate property without consent, are principles developed by courts rather than rules written in a statute. A lawyer can explain how they would apply to your facts.

Remedies available to a beneficiary

A beneficiary is an interested person who can compel accounts. Accounts filed with the court must include assets at the date of death, all money received, all liabilities, and a statement of the compensation the estate trustee claims.

When a court may excuse the executor

The court may wholly or partly relieve a trustee of personal liability for a breach of trust if they acted honestly and reasonably and ought fairly to be excused. Good records, open communication and consent from beneficiaries all help show that an executor acted properly.

What to do next

• Write down what concerns you and when each event happened.
• Ask the executor in writing for information about the assets, debts and any fees they plan to take.
• Keep copies of all letters, emails and statements you receive.
• Do not sign a release or consent to a sale until you understand what you are giving up.
• Speak to a lawyer before starting a motion or application, because notice requirements and deadlines apply.

Frequently asked questions