Disclosure Requirements of a Corporate Estate Trustee
A testator may decide to appoint a corporate estate trustee were:
- an estate is complex and he or she feels a trustee with special expertise or competence in financial matters is required to administer the estate;
- he or she is concerned there might be conflicts or disputes between the beneficiaries of his or her estate; or
- he or she simply does not want to burden family members with the responsibility of having to administer his or her estate.
A corporate trustee may also be appointed by the court to act as an Estate Trustee During Litigation where there is a dispute or litigation between the appointed Estate Trustees, or between the appointed Estate Trustees and other interested parties, such as the beneficiaries of an estate.
A recent decision of the Supreme Court of Nova Scotia, Re Creighton Estate, 2016 NSSC 136, highlights the obligation of a corporate trustee to provide co-trustees with copies of their internal notes, emails and working papers.
In this case, the deceased died leaving a Last Will and Testament (the “Will”) appointing three Estate Trustees, namely, two of the deceased’s children (the “Creightons”), and a private trust company (the “Trust Company”).
The terms of the Will stated that the Trust Company was to “assume the burden of the administration” of the Estate. However, following the deceased’s death, the Creightons advised the Trust Company that they wanted to participate in the administration of the Estate.
During the course of its administration of the Estate, the Trust Company sought a legal opinion from the Estate’s solicitor. The Creightons were not allowed input as to the facts that would form the basis of the opinion nor were they provided a copy of the opinion once obtained. The Creightons subsequently requested document disclosure, namely production of the Trust Company’s complete file.
While the Trust Company produced some documents, it claimed that its notes, working papers, internal emails, both in paper form or created electronically, which had been created in the furtherance of decision making of the Trust Company, were not subject to disclosure to the Creightons as co-trustees.
Justice Arnold disagreed, and held that the Corporate Trustee was required to provide the Creightons with copies of its notes, working papers and internal emails. At paragraphs 15 and 16 of his decision Justice Arnold states:
“It would be impossible for the Creightons to fulfill their obligations as co trustees without being fully informed by the Trust Company. Clearly, in relation to all aspects of the administration of the estate, the Creightons have a right to know how and why the Trust Company did what it did. Only full and complete disclosure by the Trust Company would allow this to occur. Co-executors … have a duty to oversee and correct each other’s conduct. This duty cannot be abdicated by a natural trustee in favour of a professional corporate trust company. Therefore, it is necessary for co-trustees to have all information that relates to the administration of the estate. This may include internal correspondence and memoranda, emails and other electronically stored information.”
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