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As co-Estate Trustee, can I be held responsible for the other Estate Trustee’s actions?

2 minute read

The short answer is yes, you can.

Joint liability exists for the trustees where a person’s will appoints more than one person as Estate Trustee, such as where a parent appoints her two (or more) children jointly as trustees.

In some wills, the testator will appoint more than one person as Estate Trustee “jointly and severally”, which technically permits the Estate Trustees to act independently of each other. However, this language is problematic as the courts have held that Estate Trustees are required to act and make decisions unanimously. This stems from the fiduciary obligations of the Estate Trustees towards the Estate, which require the Estate Trustees to administer the Estate prudently, impartially, and in good faith. If a will empowers one co-Estate Trustee to act “severally”, s/he may be in a position to create new liabilities for the other co-Estate Trustee without his/her knowledge or consent. For these reasons, the Law Society of Ontario has cautioned its lawyers against drafting wills that appoint Estate Trustees jointly and severally.

You can choose to renounce your appointment if you are not prepared to fulfill your duties as Estate Trustee or if you are concerned about the risk of being held responsible for the actions of the other Estate Trustee. However, you cannot simply take a backseat or assume a more passive role in favour of the other Estate Trustee as there can be serious consequences for doing so.

For example, in the case of Cahill v Cahill (2016 ONCA 962) the Court of Appeal for Ontario was critical of a co-Estate Trustee who simply “abdicated her duties” in favour of her brother, the other co-Estate Trustee, who then proceeded to use misappropriate funds which under the will were to be placed in trust for another brother. Although the will provided the brother with the responsibility of setting up the trust fund, the sister was not absolved from her responsibility to ensure that the trust was properly created. Further, the will had directed that the trust fund be divided between the beneficiary brother’s children, should he die. This obligation, according to the Court of Appeal, was a continuing one and bound both brother and sister. The sister was not absolved of responsibility or liability by taking a backseat or passive role.

If you have not renounced your appointment and your co-Estate Trustee has taken steps that you believe adversely impacts the administration of the Estate, then you may have grounds to bring an application for his/her removal. See the blog written by my colleague, David G. Waites, on this issue here.

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Kimberly A. F. Cura

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