It is not uncommon for an executor named in a will to by-pass applying for a certificate of appointment of estate trustee if the bulk of the deceased’s property passes outside of probate. This may occur if the deceased’s property was held jointly, for example, or if the deceased used beneficiary designations to dispose of assets. Regardless of whether an estate trustee is formally appointed, if a person intermeddles by administering the estate, they will owe fiduciary duties to the estate beneficiaries, including a duty of disclosure. The Court of King’s Bench of Alberta recently discussed the scope of this duty in Syryda Estate v Rathwell, 2025 ABKB 285, including whether it includes a duty to disclose jointly held assets that may pass outside of probate.
In Syryda Estate, the deceased’s will directed the estate residue to be divided between her children, including a daughter named as the personal representative of the estate, and her grandchildren. The deceased also held most of her financial assets jointly with her personal representative, including a chequing account and investments.
After the deceased passed away, the personal representative did not apply for probate. She also did not advise the beneficiaries about the assets that she held jointly with the deceased, including GICs worth more than $248,000, a chequing account worth $9,349, and TFSAs and RRIFs totalling about $65,000. Instead, the personal representative told the beneficiaries about two assets – the estate account, which was worth less than $1,000, and another GIC worth $158,000. The personal representative also asked the beneficiaries to sign a release before she distributed the estate. One beneficiary asked the personal representative to disclose the total assets left by the deceased, noting that she was aware that the deceased had everything in joint accounts with the personal representative. When the personal representative replied to this inquiry, she did not disclose the other assets that the deceased held jointly with her.
Years later, after the beneficiaries had signed the release and the estate had been administered, the beneficiary commenced proceedings regarding the estate, seeking full disclosure of the accounts that the personal representative held jointly with the deceased. The personal representative eventually complied, disclosing all of the assets through affidavit evidence and during questioning. In response, the beneficiary claimed that she was entitled to share in the deceased’s joint accounts, notwithstanding the fact that the personal representative had taken the funds from the joint accounts, in addition to inheriting the RRIFs and TFSAs through beneficiary designations.
The Court of King’s Bench of Alberta confirmed that the presumption of resulting trust applied to the jointly held GICs and chequing account, and that they should have been included in the deceased’s estate. However, before addressing this point, Justice Poelman discussed the duty of disclosure, confirming that the personal representative, as a fiduciary, owed a duty to the estate beneficiaries to provide an accounting that included the assets that the deceased held jointly with the personal representative. More specifically, there is a duty on fiduciaries to disclose jointly held assets subject to a rebuttable presumption which are presumed to belong to an estate. Such assets must be included in an initial estate accounting, as estate beneficiaries must be fully informed of estate assets before releases are executed. A beneficiary also cannot seek a determination of whether or not an affected asset is part of the estate if they are unaware of its existence.
Because the beneficiaries received insufficient disclosure, the court did not allow the personal representative to rely on the signed release, noting that “[i]t would be against equity and good conscience to permit a fiduciary to protect herself regarding discharge of a duty by means of a release obtained without fully disclosing information she was required to provide”.
The presumption of resulting trust was also not rebutted in this case. The deceased’s lawyer gave evidence that she had told him that the personal representative was only holding the jointly held assets as a trustee. Moreover, the deceased had contributed all of the funds in the joint accounts. While the deceased’s son gave evidence that their mother had told him that she intended the personal representative to have a right of survivorship with respect to the joint accounts, this evidence was insufficient to rebut the presumption of resulting trust, as it lacked corroboration and was vague. The strength and closeness of the deceased’s relationship with the personal representative also did not rebut the presumption – there was no evidence confirming that their relationship was so close that the deceased would have wanted the joint accounts and investments to pass to the personal representative.
This case ought to allay any doubts that an estate trustee may have regarding the duty to account for assets that may pass outside of probate. If an asset is subject to the presumption of resulting trust, it ought to be included in an initial estate accounting.
I hope you enjoy the rest of your day,
Suzana.