- A trustee or beneficiary may apply to the court to decide whether a trustee has failed to perform a duty, and the court may order performance or remove the trustee.
- Where there are three or more trustees, a majority may remove a trustee in certain circumstances without going to court.
- Asking for reports and accounts is often a sensible first step before an application.
If you are a beneficiary and you think a trustee is not doing the job properly, you may feel stuck. Trustees hold property for others, and Alberta's Trustee Act sets out what is expected of them and what can happen if they fall short.
This article explains the usual grounds for removal, the routes available, and practical steps to take first. Every situation depends on its facts, so a lawyer can help you judge whether removal is realistic.
This article covers the law of Alberta.
What a trustee must do
A trustee must act in good faith and in accordance with the terms of the trust, the best interests of the objects of the trust, and the Act. A trustee must use the care, diligence and skill that a person of ordinary prudence would use in dealing with another person's property. A trustee with specialized or professional skill is held to a higher standard.
A trustee must also act solely in the interests of the objects of the trust and must not knowingly allow a conflict between personal interest and trust duties, unless the law or the trust instrument permits it. A trustee must invest trust funds prudently and review investments periodically.
The trust instrument, such as a will, generally prevails over a contrary provision of the Trustee Act unless the Act provides otherwise. Read the instrument first, because it may affect what the trustee was allowed to do.
Grounds and routes for removal
A trustee or beneficiary may apply to the court to determine whether a trustee has failed to perform a duty or to consider a power in good faith, and the court may order performance or remove the trustee. The court may also remove a trustee in listed circumstances, including refusal to comply with a court order under section 81(2).
| Route | Who can use it | Key point |
|---|---|---|
| Court application under section 81 | A trustee or beneficiary | The court may order performance or remove the trustee. |
| Removal by co-trustees under section 21 | A majority of three or more trustees | Applies if a trustee fails to show ordinary prudence, consistently ignores communications or will not cooperate, and that harms proper administration. |
| Removal under section 22 | The court | Listed circumstances, including refusal to comply with an order under section 81(2). |
Under the co-trustee route, removal takes effect 15 days after delivery unless the trustee requests a meeting. Disagreement alone is usually not enough, so be ready to point to specific conduct.
Steps to take before applying
Many disputes can be narrowed or resolved before a court application. Information is the usual starting point.
- Ask for the report: a trustee must deliver a report for each fiscal period to qualified beneficiaries within 2 months after the end of the fiscal period, and on written request beneficiaries may inspect the source documents. A qualified beneficiary is one with a vested beneficial interest, or one who has given written notice that they want to be one and has not withdrawn it.
- Expect limits: a trustee need not disclose certain information, for example information the trustee considers detrimental, burdensome or confidential. A qualified beneficiary, or a beneficiary who requested information, can apply to the court for disclosure.
- Accounts: if informal requests do not work, the court may order on application that a trustee's accounts be passed, once or at set intervals.
- Check pay and expenses: a trustee is entitled to fair and reasonable compensation, and the court may fix it on application. A trustee who took more than the court later allows must restore the difference.
Keep copies of letters, emails and statements. A clear written record helps a lawyer assess your position quickly.
The court application and what can follow
An application under section 81 asks the court to decide whether the trustee has failed in a duty or in considering a power in good faith. The court has choices, from ordering the trustee to perform the duty to removing the trustee. Removal is not automatic.
A trustee can also ask the court for directions, and following the directions discharges the duty unless they were obtained by fraud, wilful concealment or misrepresentation.
Trustees have possible defences. The court may relieve a trustee wholly or partly from personal liability for a breach if the trustee acted honestly and reasonably and ought fairly to be excused. An exemption clause in a trust instrument generally relieves a trustee of liability according to its terms, but the court may declare it ineffective where the conduct was so unreasonable, irresponsible or incompetent that the trustee ought not to be relieved. A trustee is also not liable for a co-trustee's breach unless the trustee participated in it through the trustee's own acts or omissions.
A former trustee remains liable for breaches committed while in office. Time limits may apply to claims, so do not wait to get advice.
What to do next
- Read the will or trust deed and note any terms about the trustee's powers and removal.
- Write down specific concerns, with dates, and gather supporting documents.
- Request the trustee's reports and, if needed, the source documents in writing.
- Find out whether there are three or more trustees and whether a majority might act.
- Speak to a lawyer promptly about whether to apply to the court and what outcome is realistic.
Frequently asked questions
Can a beneficiary ask the court to remove a trustee in Alberta?
A trustee or beneficiary may apply to the court to determine whether a trustee has failed to perform a duty or to consider a power in good faith. The court may order performance or remove the trustee.
Can the other trustees remove a trustee without court?
Where there are three or more trustees, a majority may remove a trustee who fails to show ordinary prudence, consistently ignores communications or will not cooperate, if that harms proper administration. It takes effect 15 days after delivery unless the trustee requests a meeting.
What if the trustee will not give me information?
A trustee must report to qualified beneficiaries for each fiscal period, but some information need not be disclosed. A qualified beneficiary can apply to the court for disclosure.
Is a removed trustee still responsible for past mistakes?
Yes. A former trustee remains liable for breaches committed while in office. The court may still relieve a trustee who acted honestly and reasonably and ought fairly to be excused.
Sources
- Trustee Act, SA 2022, c T-8.1, ss. 3, 84(6) — kings-printer.alberta.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
This is a wills & estates question
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