Control from beyond the grave is often intolerable for beneficiaries unable to access their inheritance. Those appointed to ensure the responsible administration of an estate may or may not have done anything wrong. Nevertheless, the beneficiaries’ resentment often stirs controversy and their frustration, mistrust and hostility can result in their asking the court to remove Estate Trustees.
Historically, Courts needed to see evidence of misconduct in order to remove trustees. In Libman v. Feldberg , Mrs. Libman left some money to charities, but the bulk of the estate was left to her daughter. Mrs. Libman’s Will stated that her personal effects were to be given to her daughter, who in her absolute discretion, could decide how they should be divided between herself and Mrs. Libman’s grandchildren. Feldberg, her Estate Trustee, ignored this provision of the Will. He told Mrs. Libman’s niece that she should take whatever she wanted. The daughter found that her mother’s gold bracelet, diamond ring, candelabra and fur coat were gone. Enter the lawyers. Through their efforts, Feldberg was removed as an Estate Trustee, the missing personal effects were retrieved and they recovered $50,000 worth of bonds and valuable coins that had disappeared.
Was the Court’s decision based on the hostility between the beneficiary and Feldberg? The Judge hearing the case relied on Re Davis , a decision of the Ontario Court of Appeal. In that case, Mrs. Davis appointed her friend to be the executrix (the person in charge of administering her estate). The three judges on the Court of Appeal found that ” … the present situation is not any more the fault of the executrix than it is of the beneficiaries….Regardless of what has brought about the present situation,….it is no longer possible for the executrix to exercise (her duties) in a completely impartial and objective manner”. For the Court of Appeal, misconduct was not the issue. What mattered most was the presence of hostility and the inability of an Estate Trustee to be completely impartial and objective in the administration of the estate. In Libman v Feldberg, it was clear that the Court found Feldberg’s administration of the estate wanting. The Court found that he did not carry out his duties ” in a completely impartial and objective manner” which resulted in “. a degree of hostility and distrust is so strong, as to make it impossible for the beneficiary to accept Feldberg’s actions…” Apparently, for Ontario Courts, removal of Estate Trustees may no longer only be limited to instances where a Trustee is guilty of misconduct. They key factor seems to be an ability to carry out his/her duties impartially and objectively.
Going to court to remove an Estate Trustee may be a very serious and expensive matter. Despite the temptation to jump to conclusions, it would be a mistake to treat this case review as substantive legal advice. For those considering this option, there is no substitute for hiring a competent solicitor whose own research, analysis and judgment should be canvassed prior to going to court.
2004 CarswellOnt 5161; additional reasons see Libman v. Feldberg (2002), 2002 CarswellOnt 4289, [2002] O.J. No. 4868 (Ont. S.C.J.)
