What Is an Estate Trustee in Ontario and What Do They Do?

You may have seen the term estate trustee in a will, on a court form or in a letter from a bank. It can sound technical, but the idea is simple: it is the person who takes charge of a deceased person's property and sees that it ends up in the right hands.

This article explains the role in plain words, who can take it on, what authority comes with it and where that authority stops. It is general information about Ontario, not advice on your own situation.

What an estate trustee is

An estate trustee is also called a personal representative. You will often hear the word executor for someone named in a will. The duties include finding the will, winding up the deceased's affairs, paying taxes, bills and other debts, and distributing what remains to those entitled.

Think of the role as a bridge between the person who died and the people who inherit. Until the estate is settled, someone has to deal with banks, creditors, the tax authorities and the beneficiaries. That is the estate trustee.

A continuing power of attorney for property ends when the grantor dies. From the date of death, the estate trustee named in the will, not the attorney, deals with the deceased's property.

Who can act, and who can say no

A person named as estate trustee in a will does not have to act. If the named person declines or cannot act, the beneficiaries may nominate another person. When a named executor renounces probate, their rights as executor wholly cease, and administration proceeds as if they had never been appointed.

If several people are named and some do not want to act, a probate application must include a renunciation (Form 74G) from every living person named in the will as estate trustee who has not joined the application.

If you have a financial interest in the estate and the named person is stalling, you can move for an order requiring them to accept or refuse the appointment.

Where the deceased had Ontario property but did not live in Ontario, the Ontario government says to contact the courthouse in the location where they owned the property. Letters probate may not be granted to a person who lives outside Ontario and outside the Commonwealth unless they give the same security (bond) an administrator would, or a judge dispenses with or reduces it in special circumstances. Ontario.ca states that a bond is needed for a named executor only when the applicant does not live in Ontario, another province or territory, or a Commonwealth country.

Authority and limits

An estate trustee can deal with the estate property so the estate can be wound up, but the role comes with duties. These are some of the main ones:

• Keep accurate records of the assets and transactions in the estate.
• Invest estate property with the care, skill, diligence and judgment of a prudent investor.
• Pay expenses only if you believe they are properly incurred in carrying out the trust. You may pay them from trust property or pay personally and recover the same amount from trust property.
• Expect that the Superior Court of Justice may later disallow a payment or reimbursement if it finds the expense was not properly incurred.

If an estate trustee makes a mistake, the court may relieve them from personal liability for a breach of trust if they acted honestly and reasonably and ought fairly to be excused. That is a decision for a judge, not something a trustee can assume.

On a passing of accounts, the judge can inquire into complaints by people interested, including misconduct or neglect causing loss, and may order payment to the estate.

Stepping down, removal and disagreements

Once an executor has started acting, the Trustee Act's out-of-court retirement procedure does not apply to executors or administrators. An estate trustee who wants to step down generally needs a court order, for example to appoint new trustees or to remove and replace them.

The Superior Court of Justice may remove an estate trustee on any ground on which it may remove any other trustee, and appoint another proper person in their place.

Co-executors who disagree can apply to the court, without starting an action, for its opinion, advice or direction on managing the estate. A trustee who follows that direction is treated as having discharged their duty, unless there was fraud, wilful concealment or misrepresentation.

Any person who appears to have a financial interest may also apply for directions. The court may set the issues to be decided and may appoint an estate trustee during litigation. Joint powers given to two or more trustees may be exercised by the survivor or survivors for the time being.

What to do next

Whether you were named or are a beneficiary, a few early steps keep things orderly:

• Locate the original will and confirm who is named as estate trustee.
• If you are named, decide whether you want to act before you take any steps on the estate.
• Start a simple record of every asset, bill and payment from day one.
• Ask whether the estate needs probate. If you apply, the Estate Information Return is due within 180 calendar days of receiving the certificate of appointment.
• Check the Estate Administration Tax. No tax is payable if the estate is $50,000 or less, and above that it is $15 for each $1,000 (or part) over $50,000.
• Speak with a lawyer if there is a dispute, a non-resident trustee or a question about tax.

Frequently asked questions