The escalating legal battle arising out of Jimmy Buffett’s estate is highlighting a common issue that arises in estate litigation: feuding co-trustees.
At the heart of the dispute is a marital trust set up by the late singer for his wife, Jane Buffett. Buffett’s will left the bulk of his $275-million estate to the trust, created for Jane’s “sole benefit of her lifetime”. The remainder beneficiaries are the couple’s three children.
Jane was named trustee along with Buffett’s longtime advisor. However, both trustees have alleged improper conduct by the other; Jane has accused her co-trustee of refusing to give her details of the trust’s financials, mismanaging trust assets, and collecting excessive fees, while he has alleged that Jane has interfered with business decisions and breached her fiduciary duties.
While the dispute is based in Florida and California, in Ontario, when co-trustees are feuding, there are several mechanisms through which trustees can be removed. Anyone with a financial interest in an estate can apply to have an executor passed over or removed under s. 37(3) of the Trustee Act (for a more in-depth discussion of this, see David M. Smith’s blog here). In Jane’s case, as a beneficiary, she would have this ability.
However, the Court has noted that friction alone is not enough to remove a trustee; as the Court in Wright v. Wright, 2023 ONSC 6854 observed, it must be shown that the non-removal of the trustee will likely prevent the trust from being properly executed. The main guideline is the welfare of the beneficiaries, according to the Court in Zucker et al. v. Moore et al., 2011 ONSC 716. As a beneficiary, Jane may then have recourse here, if it is found that her co-trustee’s actions have negatively impacted her interests.
In any case, the dispute between these two co-trustees demonstrates how a testator’s choice of trustee does not always work out in practice, and other alternatives, such as a professional trustee to administer the trust, may be more prudent – especially when there is a chance of protracted litigation.
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