Party On: Claims By or Against Estates and Trusts
When a claim is being brought by or against an estate or a trust, who are the proper parties?
Rule 9.01 of the Rules of Civil Procedure provides that a proceeding may be brought by or against an executor, administrator or trustee as representing an estate or trust and its beneficiaries without joining the beneficiaries as parties.
There are exceptions to this Rule. Beneficiaries must be included as parties where the claim is:
- to establish or contest the validity of a will
- for the interpretation of a will;
- the removal or replacement of an executor, administrator or trustee;
- against an executor, administrator or trustee for fraud or misconduct; or
- for the administration of an estate or the execution of a trust by the court (ie, under Rule 65).
Where beneficiaries must be named as parties, the failure to do so may be “fatal” to the proceeding. In Blum v. The Queen, 1998 CanLii 425 (TCC), the applicant challenged the validity of a trust. The beneficiaries were not named. Applying similar rules under Alberta’s Queen’s Bench Rules, the court stated “The failure to do so [to name the beneficiaries] is fatal to the wife’s attach on the trust.” It should be noted that under the Alberta rules, beneficiaries to a trust must be named as parties to a proceeding to establish or contest the validity of “a will or trust”. Ontario Rules do not require that the beneficiaries of a trust be named as parties (as opposed to beneficiaries under a Will). However, applying the logic in Blum, it may be advisable to do so. In Blum, the court stated that it would be reluctant to rule on the validity of a trust without the beneficiaries being represented in the proceeding.
Thus, the executor, administrator or trustee is a necessary party to a proceeding by or against an estate or trust. Under Rule 9.01(3), if any executor, administrator or trustee does not consent to be joined as a plaintiff or applicant, they are to be made a defendant or respondent.
The beneficiaries, however, except in the limited exceptions noted, are not necessary parties. However, while certain proceedings may be brought without naming the beneficiaries as parties, there is nothing that prevents them from being named. In Milner Investors Inc. v. Eisen, 2019 ONSC 5911 (CanLII), the court held that while they do not need to be named as parties, “There is nothing that precludes the pleading from naming the beneficiaries as plaintiffs.”
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