What happens when an estate trustee dies?
Section 2 of Ontario’s Estates Administration Act provides that upon a person’s death, all real and personal property formerly vested in him/her, with the exception of jointly owned property, will devolve to and become vested in his/her estate trustee, subject to the payment of estate liabilities, for those beneficially entitled thereto (i.e. the beneficiaries).
What happens when the estate trustee who has been actively administering an estate, and in whom the estate property has vested, dies before the administration is finalized? Will this prevent the estate from being distributed?
Section 3(2) of the Trustee Act provides, where there are multiple estate trustees and one dies then the powers and duties of the deceased estate trustee will vest in the survivor(s) unless the Will contains a provision to the contrary.
If the sole appointed estate trustee, or the sole surviving estate trustee, dies before the estate has been fully administered and an alternate estate trustee is named in the Will, then the alternate would apply to the court for a Certificate of Appointment of Succeeding Estate Trustee With a Will to obtain the authority to deal with the estate assets.
If there is no alternate estate trustee named in the Will, or the alternate named estate trustee decides to renounce his/her right to act as estate trustee, the executorship will “devolve to” (pass to) the executor named in the sole or last remaining executor’s Will (the “New Estate Trustee”). The New Estate Trustee will need to apply to the court for a Certificate of Appointment of Succeeding Estate Trustee With a Will in order to obtain the authority to deal with the estate assets.
However, only an executor who has proved a Will can transmit the executorship of the original estate. In other words, for devolution of executorship to apply, the original estate trustee must have obtained probate (i.e. a Certificate of Appointment) before she/he died.
The executorship will not devolve where the sole estate trustee, or the last surviving estate trustee:
(i) dies intestate (without a Will);
(ii) fails to appoint an estate trustee; or
(iii) fails to prove the Will (i.e. does not obtain probate).
In such circumstances the original estate must be administered as if no executor had ever been appointed. While this may delay the administration of the original estate, it should not prevent that estate from being distributed.
Thank you for reading.
Other Hull & Hull LLP Blogs & Podcasts that may be of interest to you: