Estate disputes can tear families apart and leave valuable assets in limbo. When tensions rise and estate administration becomes impossible, there is a powerful legal solution that many people do not know about: an Estate Trustee During Litigation (ETDL).
What happens when estate management falls apart?
Imagine inheriting a family property or significant assets, only to find yourself trapped in a nightmare of:
- Feuding with family members who are blocking the administration of an estate;
- Suspicious mismanagement of an existing executor;
- Complete communication breakdown between trustees; and/or
- Disputes over the validity of the will.
The benefits of having an ETDL
A court-appointed ETDL can be seen as a neutral third-party, independent of the estate, who steps in to:
- Temporarily take control of estate management;
- Protect all beneficiaries' interest;
- Ensure estate assets are preserved and properly managed; and/or
- Continue essential administrative tasks during legal disputes.
When is an ETDL appointed?
In Ontario, courts consider several factors when determining whether an ETDL is necessary, as outlined in the case of Baran v. Cranston (2020 ONSC 589). This includes:
- Whether a trustee may be a witness in the litigation;
- Potential for conflict of interest;
- Conflict between the interests of the trustees and/or beneficiaries;
- Hostility between the trustees and/or beneficiaries;
- Lack of communication between the parties; and
- Evidence of settlement discussions that exclude some of the parties.
What can an ETDL do?
Once an ETDL is appointed, they will generally have all of the authority and powers of an estate trustee, aside from distributing the residue of the estate to the beneficiaries. The tasks which an ETDL would carry out may include:
- cleaning out and selling the deceased's home or other real estate;
- arranging for the sale or distribution of the deceased's household contents and personal items;
- liquidating other estate assets such as investment accounts, or else managing these if they are not being liquidated;
- filing income tax returns;
- reporting to stakeholders on the status of the ongoing administration of the estate; and/or
- potentially gathering documentation and information necessary to resolve the estate dispute (such as the deceased's medical and financial records).
At times, the parties can also agree to certain directions or restrictions as to how the ETDL is to carry out their duties, depending on the specific circumstances of the estate.
The duties and responsibilities of an ETDL cease following the termination of the litigation, unless otherwise ordered by the court or agreed to between the parties. The estate lawyers at Miller Thomson have vast experience and knowledge in dealing with disputes regarding large and complex estates.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
