Written on behalf of Feigenbaum Consulting
Most people create an estate plan in order to ensure that their estate is distributed according to their wishes after they pass away. Usually, estate planning is done with the intention of avoiding infighting amongst the testator’s family. A recent decision from the Queen’s Bench for Saskatchewan shows the kind of disputes that can occur when someone dies intestate (without a will) and their surviving family members cannot agree on who is entitled to what, or in this case who should be responsible for the administration of the estate. While this decision comes from outside of Ontario, it still provides useful guidance on the importance of estate planning in order to avoid estate litigation.
One child of the deceased moves into the family home following father’s death
The deceased in the matter was the father of three children (“MW”, “PC”, and “DC”). Their father died without a will in March 2015. At the time of his death, MW and PC had a limited relationship with their father, with MW saying it was virtually non-existent. DC was also described as having had a difficult relationship with his father but told the court it had improved in the years leading up to his death.
Not long after their father died, DC and his family moved into the deceased’s home. DC said he did this for two reasons. The first was to ensure that taxes on the property were paid and that maintenance was performed on the home. The second reason was that he hoped to purchase the home and provide his siblings with their share of its equity.
After DC moved into the home, PC asked him to pay $500 per month in rent until the estate was settled. However, DC said he did not want to do that until the estate was valued. He told the court he didn’t think it was “prudent” to start paying rent without legal representation.
DC said the home was in poor condition when he moved into it and that he performed extensive maintenance on it as well as paying for insurance, utilities, and taxes. He also paid off a small mortgage on the home and attempted to settle his father’s taxes, which had not been paid in the years prior to his death.
While DC’s work and contributions to the home may have been appreciated, and perhaps even necessary, it remains that he did it all without any authority from the estate. The siblings were not able to agree on what should happen to the home or who should be named administrator of the estate.
The matter made its way before the court after MW and PC applied to become administrators of the estate, also asking that DC be made to move out of the home and provide them with an accounting of the estate’s finances in the years DC lived in the home. DC also sought to be appointed administrator of the estate.
Who should be named administrator of the estate?
The province’s Administration of Estates Act allows courts to appoint administrators of estates but is silent on what to do when there are multiple parties seeking such an appointment. However, lawyers for both sides agreed that a 2021 decision from British Columbia provided the principles to be applied. The considerations can be summarized as follows:
- The best interest of the estate and all those interested in it;
- Which administrator would be best able to convert the estate to the advantage of those interested in it;
- The support of the majority of beneficiaries; and
- The ability of an administrator to act neutrally and without animosity.
The court first looked at who would be best able to convert the estate to the advantage of the beneficiaries. It concluded that MW and PC were in the best position, stating that DC’s unwillingness to pay rent while living in the home demonstrated that he does not necessarily prioritize the financial interests of the estate. While MW and PC don’t have as much information about the finances of the estate, they are motivated to do so while DC does not seem to be.
The court then turned to the consent of the majority of beneficiaries, stating simply that MW and PC represent two-thirds of the beneficiaries. In turning to which of the parties had the ability to stay neutral, the court found that DC was in a position of conflict because he wanted to maintain possession of the home, which is the estate’s most valuable asset. While DC wants to live in the home, MW and PC want to sell it and receive occupation rent for the time DC had lived there. The court wrote that it would be impossible for DC to pursue his interests as well as that of the estate.
With the most significant weight being placed on who would be able to best maintain a neutral position in the estate, the court ruled that MW and PC would be appointed as administrators. DC was also ordered to provide his siblings with the financial information of the estate he was in possession of. The court fell short of ordering that DC move out or allowing his siblings to evict him. Instead, the estate would go through the probate process while allowing DC to obtain financing for the purchase of the home if able.
Let Feigenbaum Law in Toronto help you avoid estate litigation matters
The estates law team at Feigenbaum Law is available to assist you in effective estate planning, including those related to taxes. We understand that it is important for the beneficiaries of an estate to keep as much money within the estate as possible. Whether through planning or litigation, when necessary, we have extensive experience in helping our clients avoid the legal and financial risks involved with estate planning or disputes. Please reach out to us online or by phone at 905-695-1269 to see how we can help you today.