Removal of Estate Trustee

It is rare that an estate trustee would be removed because the Court is reluctant to interfere with the discretion and wishes of the testator in appointing the trustee or executor as his/her personal representative. However, the Court does have inherent jurisdiction to remove trustees who have failed to play their roles properly.

The Governing Principle of Removing an Estate Trustee
The overarching principle of removing an estate trustee is the benefit of the beneficiaries under the will. Misconduct is one of the reasons why an estate trustee may be removed. There are many other reasons for which an estate trustee can be removed:

  1. Misconduct
  2. Breach of trust and fiduciary duty
  3. Conflict of interest
  4. Bankruptcy
  5. Conviction of a crime
  6. Incapacity
  7. Mismanagement of the estate
  8. Disagreement between co-trustees

For instance, if the estate trustee takes compensation from the estate assets when the will prohibits it, the trustee is in breach of the fiduciary duty and trust. In addition, a trustee is usually vested with power to manage and invest the funds of the estate. If the trustee invests the funds in excessively high-risk investment options leading to significant loss of the estate, it may amount to mismanagement of the estate.  In situations where two co-trustees disagree with each other, the Court may also consider removing both trustees altogether and appointing somebody else as a substitute trustee. More often, when a trustee cannot act impartially like the trustee personally benefitting from the estate, the Court may remove the trustee for conflict of interest.

In Ontario, an individual who has a financial interest in the estate can apply to the Court to have the estate trustee removed, replaced or not appointed at all. Such application is one of the common types of estate litigation.

Landmark Law assists beneficiaries to challenge the estate trustee in the administration of an estate. Please feel free to book a 30-minutes consultation with us to discuss.

Disclaimer: The following information is intended as general information and not to be read as legal advice. Please seek legal advice from qualified legal professionals.

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Winnie J Luk, BA, JD, MBA, founder of Landmark Law, is a seasoned Ontario lawyer practicing in Wills and Estates, Real Estate, and Business Law and frequent speaker of free legal education seminar.