The Saskatchewan King’s Bench recently decided a case, Nagy v. Graves, 2022 SKKB 257, wherein the question was addressed: if a substantial portion of an estate has been distributed, why and when should an application to remove an executor be sought? The Court’s answer? When there are serious concerns about the future administration of the estate and the risks to which it may be exposed if the appointed executors continue to be in charge of administration. Anyone who has dealt with a contentious estate dispute where they felt that the executor was not performing their duties well enough may feel vindicated by this answer, but in Nagy the Court reiterated that the express wishes of a deceased testator regarding which persons should have the power to administer their estate should not be lightly interfered with.

In Nagy, the Court had found that the executors showed a past lack of diligence to their duties, and a present and continuing lack of understanding of the steps required for them to discharge those duties. There was good evidence for this finding. The executors were two children of a deceased mother with 9 children, 7 of whom were included in her will. Their mother’s Will had been executed in 1983, and she had died in 2012. The executors – one of whom was also a beneficiary – did not apply for letters probate until February of 2021. Once they had acquired letters probate, they proceeded to distribute the majority of the estate. However the remaining beneficiaries had had enough of the continued inaction.

The Court considered what constituted failure to “administer the estate in a reasonable and prudent manner” and whether the appointed executor’s “removal…would be in the best interests of those persons interested in the estate.” The Court was particularly concerned with the threat to the estate if the appointed executors were not removed. The Court said that the emphasis of an application for the removal of an executor should be on the future administration of the estate and the risks it would be exposed to if the appointed current executors continue to administer it. Removal is not meant to be a punishment for past misconduct, but an action to protect the assets of the estate and the beneficiaries’ interests therein.

The Court determined that the appointed executors failed to apply for probate within the statutorily outlined period due to a lack of attention to the administration of the estate and their duties as executors, failed to open an estate account until after they received letters probate which occurred 8 years after the testator’s death, submitted unacceptably vague and approximated accounting without receipts, failed to file estate tax returns, and lived rent free in estate property. This, in conjunction with the lack of an estate account after 9 years of revenue and expenses failed to pass the requirement that a trustee exercise the degree of care, skill, and diligence that a person of ordinary prudence would exercise, having regard to the skill, experience, and qualifications of the trustee.

The Court noted that the overarching responsibility of an executor is to safeguard the estate for the beneficiaries, and as such, the voices of the beneficiaries should be heard, especially as the surviving non-executor beneficiaries in this case had decided to sign a Renunciation and Consent in support of the application for the removal of the appointed executors. The Court reiterated that the onus of proving that the removal is necessary lies with the one seeking the removal. The Court in this case determined that the applicant had met the burden, and that the removal of the chosen executors was in the best interests of the beneficiaries.  

The expectations of a testator in Ontario are akin to those in Saskatchewan, so this case may be an illustrative example to those dealing with unreasonable executors as to when the Court will step in to remove an executor.