What to Do if an Executor Is Using Estate Money for Themselves in Ontario

Seeing an executor spend freely, move money into their own account or avoid your questions can be alarming. Before acting, it helps to separate suspicious behaviour from things executors are allowed to do.

This article explains what is permitted, what evidence to gather, and the urgent and longer-term options for a beneficiary in Ontario. It is general information, and a lawyer can assess your situation.

What executors are allowed to be paid

An estate trustee is entitled to a fair and reasonable allowance for their care, pains and trouble and time spent, as allowed by a judge of the Superior Court of Justice. The statute sets no percentage or formula.

There are exceptions. Where the will fixes the allowance, that section does not apply. Where a lawyer is the executor and has provided necessary professional services, the allowance may be increased.

An executor who believes an expense is properly incurred in carrying out the trust may pay it from estate property, or pay it personally and recover it from the estate, such as a funeral paid personally. The court may later disallow the payment or recovery.

General principles also matter. An executor should not take estate assets for themselves, or buy estate property, without the beneficiaries' consent or court approval. Confirm how this applies to your facts with a lawyer.

Warning signs and evidence to gather

• Refusal to share any information about assets, accounts or expenses.
• Estate property sold quickly, cheaply or to the executor or a friend.
• Estate money used for the executor's own bills or lifestyle.
• Large or unexplained payments, including fees paid to the executor with no explanation.
• Estate funds invested carelessly, since a trustee must use the care, skill, diligence and judgment of a prudent investor.

Estate trustees must keep accurate records of the estate's assets and transactions. Gather what you lawfully already have, such as the will, bank statements, emails, property listings and any correspondence, and keep notes of dates and conversations. Do not access accounts or documents you are not entitled to.

Urgent and practical steps

A person with a financial interest in the estate may move for an order requiring the estate trustee to file a statement of the nature and value of the estate's assets, give further particulars, or pass accounts. Such motions may generally be made without notice, except a motion for further particulars, which requires 10 days' notice to the estate trustee.

A beneficiary is an interested person who can compel accounts. Where the executor claims compensation, the accounts must include a statement of it.

Where there is a standoff, a person with a financial interest may apply for directions, and the court may direct that an estate trustee during litigation be appointed and file security. The court may also remove a personal representative and appoint another proper person in their place.

Passing accounts and recovering money

When the estate trustee applies to pass accounts, the notice of application and draft judgment must be served on every person with a contingent or vested interest at least 60 days before the hearing date, or 75 days if served outside Ontario.

A beneficiary who objects to the accounts, including the compensation claimed, must serve a Notice of Objection to Accounts (Form 74.45) at least 35 days before the hearing date. If no objection is made and the required record is filed, the court may grant judgment without a hearing.

On passing accounts, the judge may make full inquiry into the deceased's property and may order the executor, administrator or trustee to pay such sum by way of damages or otherwise as is just. This is a route to recover misused estate funds.

An executor is not always held personally liable. The court may wholly or partly relieve a trustee of liability for a breach of trust if they acted honestly and reasonably and ought fairly to be excused.

What to do next

• Write down what you have seen, with dates, amounts and who told you.
• Collect the documents you are lawfully entitled to hold.
• Ask the executor in writing for an accounting and a list of assets.
• Do not confront the executor aggressively or take estate property yourself.
• See an estate lawyer promptly about motions, directions or removal, since delay can make recovery harder.

If a beneficiary is a child under 18, the Office of the Children's Lawyer may act on their behalf in estate matters.

Frequently asked questions