People are advised to choose an estate trustee who will be “impartial”—but what does impartiality mean within a family? And what does this mean in practice when an estate trustee is dealing with a family member residing in estate property and who refuses to leave when their parent(s) die?
It is not uncommon for adult children to move back home, either because they cannot afford their own home or because they wish to support their aging parents. This situation requires considerable planning and communication to ensure a fair outcome as desired by the deceased parent. It also puts siblings who do not live in the house in an awkward position when it comes time to liquidate the estate. The will lacked specific instructions.
In a recent decision from the Superior Court, Justice Mew determined that the personal interests of the estate trustee could reasonably coincide with her responsibilities to administer an estate (even if they contradict the interests of another beneficiary) so long as the estate trustee’s actions are supported by the will and by statute. This case supports the legal standing of an estate trustee to require a beneficiary to vacate the estate property to allow for the timely administration of the estate.
This is because, as Sheffield (Estate) v Sheffield reveals, there is a significant difference in a will between what is required, and what is permissible.
The Trustee’s Role
While an estate trustee is required to act in the best interests of the estate, there are many ways to do this. Mrs. Sheffield’s Will indicated that both of her children were entitled to a share of her home. This could have meant that the siblings could sell the home and split the profit, it could have meant that they would share home ownership, or it could have meant that one or both could live in the home.
However, the Estates Administration Act, as pointed out by Justice Mew, indicates that the estate trustee, Mrs. Sheffield’s daughter, may deal with the property for the benefit of the estate “as if it were personal property” (section 2(1)). The Land Titles Act similarly gives the estate trustee discretion to manage estate property as if she herself had bought it.
This means that while it is good for an estate trustee to consider the beneficiaries in her decision making, she is not required to accommodate them outside of the provisions of the will. In this case, the estate trustee’s brother was living in the family home at the time of his mother’s death, but the sheer fact of his residence did not require his sister, the estate trustee, to enable him to continue living there if it would not benefit the estate.
Family Expectations
It is important to note that in this case, while Justice Mew ruled in favour of the estate trustee, who was acting to protect the interest of the estate, this does not mean that the brother’s desire to remain living in the house was unreasonable.
Justice Mew recognized this by ensuring that the brother did not have to cover the costs of the estate’s litigation, but only his own. This indicates that in estates where the beneficiaries disagree, there many not be a right or wrong answer, but rather, only right or wrong responses.
The brother reasonably desired to continue living in the house, but was unable, or unwilling, to purchase his sister’s share in order to ensure he could continue living there. Furthermore, he had allowed the home to deteriorate, indicating that he may not have been interested in preserving the value of the property. In this way, the conflict between brother and sister was not only about home maintenance, but about their parents’ expectations for the property.
When drafting your Will with family in mind, this indicates why it is important to specify clearly what your wishes are, and to communicate these clearly with any children or beneficiaries during your lifetime. Mrs. Sheffield’s son believed that he would continue to live in the house, but her Will did not explicitly provide for this: there was no indication that Mrs. Sheffield had discussed with her son the different possibilities regarding her home that her Will would create.
Whether writing a will, it important to ensure that all parties understand what your intentions are, and when decisions may be made in the interest of efficiency, rather than affording a beneficiary an extra benefit.
In this case, Justice Mew accepted and clarified the court’s responsibility to made decisions that support the the estate trustee in performing their duty, which is to the protect the estate in accordance with the deceased’s wishes, as well as the beneficiaries’ inheritance.
This may be one of the reasons why the law instructs the estate trustee to treat estate property as if it were their own. By putting the estate trustee in the deceased’s shoes, they can consider what choices may best preserve the past, and the future. However the best way to make ensure your estate flows the way you intend is to write a clear Will and discuss it with your beneficiaries.
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