Tag: Application for Directions
A testator appointed you as Estate Trustee of an Estate and a beneficiary filed a Notice of Objection to your appointment. What to do?
Typically, a Notice of Objection to an appointment of an Estate Trustee means that their authority is challenged such that before the administration of the Estate can be addressed, the Notice of Objection must be resolved, first and foremost.
Whereas in the case of a Notice of Objection, the party having filed it, is likely to commence a court proceeding to substantiate his or her claims, that is not always the case. As such, there are a couple of things that an Estate Trustee can do to force the Objector to move forward, in order to ultimately address the resolution of the objection.
- File a Notice to Objector
In accordance with Rule 75.03(4), an Estate Trustee can serve a Notice to Objector and file it with proof of service with the Court.
If the Objector does not serve and file a Notice of Appearance within 20 days of being served with a Notice to Objector, the Estate Trustee’s Application for a Certificate of Appointment is to proceed as if the Notice of Objection had not been filed.
If a Notice of Appearance is served on the Estate Trustee, they have 30 days to bring a motion for directions before the Court and if they do not do so, the Objector may seek directions, as well.
Essentially, the effect of a Notice to Objector is forcing the Objector to commence a claim or else abandon his or her objections.
- Commence an Application or Motion to propound the testator’s Will
Another option that exists for an Estate Trustee is simply skipping the steps that would follow the service of a Notice to Objector and seeking the directions of the Court, in accordance with Rules 14.05 and 75.06 of the Rules of Civil Procedure.
In this case, the Estate Trustee becomes the party commencing a court proceeding such that the costs associated with such a step ought to be considered, before proceeding. It is important to note, however, that proceeding with the first option will not necessarily save on legal costs to be incurred, if the Objector ultimately proceeds with a claim.
The option that is selected by an Estate Trustee will depend on the circumstances of each individual case such that it is important to consult with a lawyer as to which option is best.
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Being a trustee of a trust can be perilous, with trustees facing potential personal liability should they make the wrong decision. As a safeguard against such potential liability, when issues arise in the administration of a trust, trustees may consider commencing an Application for the opinion, advice or direction of the court in accordance with the Trustee Act. Section 60(1) of the Trustee Act provides:
“A trustee, guardian or personal representative may, without the institution of an action, apply to the Superior Court of Justice for the opinion, advice or direction of the court on any question respecting the management or administration of the trust property or the asserts of a ward or a testator or intestate.”
Should the court accept such an Application, and provide the trustees with directions regarding the issue, the trustees are insulated from liability as it relates to the beneficiaries regarding such an issue so long as they act in accordance with the directions of the court. This is made clear by section 60(2) of the Trustee Act, which provides:
“The trustee, guardian or personal representative acting upon the opinion, advice or direction given shall be deemed, so far as regards that person’s responsibility, to have discharged that person’s duty as such trustee, guardian or personal representative, in the subject-matter of the application, unless that person has been guilty of some fraud, wilful concealment or misrepresentation in obtaining such opinion, advice or direction.”
Notably, while section 60(1) of the Trustee Act allows trustees to direct a specific issue for the “opinion, advice or direction” of the court, the court has been clear that on such an Application the court will not exercise discretionary decisions on behalf of the trustees. Such a point was recently made clear by Justice Broad in Keller v. Wilson, where at paragraph 25 the court states:
“The fact that trustees are expressly permitted by the Trustee Act to apply for the opinion advice or direction of the Court does not authorize the court to exercise discretionary powers on behalf of trustees, thereby shifting responsibility from the trustees, on whom the settlor of the trust placed such responsibility, to the court. This is so even though subsection 60(2) of the Trustee Act provides a specific indemnification to trustees who act upon the opinion, advice or direction of the court.” [emphasis added]
Cases like Keller v. Wilson make it clear that on an Application for opinion, advice, or direction, the court will not exercise discretionary decisions on behalf of the trustee, with their jurisdiction to provide directions being limited to questions of a “legal” nature relating to the discharging of the trustees’ duties. To this effect, the court’s direction can be thought of the court advising whether the trustee “can” not “should” do a particular action. While the court will advise whether the trustee has the legal authority to do a particular action, they will not make such a discretionary decision on behalf of the trustee.
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Being an Attorney for Property is often a thankless job. You are often required to make difficult decisions on behalf of an incapable person regarding their ongoing financial wellbeing, in doing so opening yourself up to potential liability not only to the incapable person themselves, but also potentially to the beneficiaries of the incapable person’s estate. As a result of the difficult decisions which Attorneys for Property often have to make, and the risk of liability that comes with the job, it should come as no surprise that some Attorneys for Property turn to the court for guidance.
Section 39(1) of the Substitute Decisions Act (the “SDA“) provides the statutory framework under which an Attorney for Property may apply to the court for directions, providing:
“If an incapable person has a guardian of property or an attorney under a continuing power of attorney, the court may give directions on any question arising in connection with the guardianship or power of attorney.”
In Keller v. Wilson, 2015 ONSC 6962, the Ontario Superior Court of Justice was faced with an Application for directions brought by two Attorneys for Property under section 39(1) of the SDA, whereby the Attorneys asked for the assistance of the court with respect to whether they should comply with the request of the incapable person’s son that the Attorneys provide him with funds from the incapable’s property, and that the Attorneys should sell certain real property owned by the incapable to finance such a transfer.
In determining whether it could make such a decision for the Attorneys, the court looked to sections 37(1) and 37(3) of the SDA which authorize the Attorneys to make expenditures to support the incapable person’s dependants, as well as to make gifts or loans to the incapable person’s friends and relatives. The court also looked to the evidence on hand that the incapable had specifically advised her lawyers that she did not want to provide her son with an allowance, and about the difficult relationship which the incapable had previously had with her son.
The court ultimately refused to exercise the discretionary decision on behalf of the Attorneys, looking to the 1903 decision of Re Fulford, 29 O.L.R. 375, wherein the court provided the following:
“The executors cannot come to the Court and ask whether the present is a good time or a bad time to sell stock or anything else, or ask whether a price offered is sufficient or insufficient. The advice which the Court is authorized to give is not of that kind; it is advice as to legal matters or legal difficulties arising from the discharge of the duties of the executors, not advice with regard to matters concerning which the executors’ judgment and discretion must govern.” [emphasis added]
Keller v. Wilson makes it clear that discretionary decisions ultimately rest with the Attorneys alone, and the court will not exercise their discretion for them. While the court will provide direction with respect to legal issues which arise within the management of an incapable person’s property, they will not exercise discretionary decisions for the Attorney for Property. Such discretionary decisions ultimately rest with the Attorney for Property alone.