Our estate litigation lawyers have prepared a series of posts on the issue of removing an executor appointed in a BC will. We discussed cases in which one co-executor is removed due to conflict, inaction, or delay, leaving the remaining co-executor appointed in the will to administer the estate as sole executor. In today’s post, our BC estate lawyers will answer the question of whether both co-executors can be removed or “passed over” in favour of another person such as a professional trustee.
Both co-executors removed or “passed over”
In Weisstock v. Weisstock, 2019 BCSC 517, two brothers were named as co-executors in their late mother’s last will and testament, but due to acrimonious disputes that arose, neither of the brothers believed that the other was fit to serve in that capacity, and both applied to the court to remove the other as executor. The Honourable Mr. Justice Milman concluded that the appropriate order was for both co-executors to be passed over in favour of a professional trustee.
Deadlock in Weisstock leading to both co-executors applying to remove the other
Maria Weisstock (“Maria”) passed away on December 29, 2016 at the age of 91. She was predeceased by her husband, Willy, who died in 2012. Maria and Willy had four children. During their lifetimes, Willy and Maria created a successful real estate investment and rental business operated through a corporation called Witmar Holdings Ltd. (“WHL”). The value of the business was disputed, but was estimated to be in the range of $24 million to $55 million.Willy and Maria’s wills stipulated as follows:
As a result of disagreements between Tony and Albert, the administration of Maria’s estate became deadlocked and no substantive steps were taken to administer the estate or to obtain a grant of probate in the period of more than two years that elapsed since Maria’s death. Each co-executor applied to remove the other as executor, contending that the other was in breach of trust and in an untenable conflict of interest.
Principles that guide the court when removing an executor
The principles that guide the court’s discretion in deciding whether to remove an executor or estate trustee are as follows:
(1) the court will not lightly interfere with the will-maker’s choice of executor(s) or estate trustee(s);
(2) clear evidence of necessity is required;
(3) the court’s main consideration is the welfare of the beneficiaries; and
(4) the executor or estate trustee’s acts or omissions must be of such a nature as to endanger the administration of the estate.
It has repeatedly been held that a conflict of interest may disqualify an executor from acting in that capacity. Such a conflict may arise if the executor has or may have a claim against the estate or if the estate has or may have a claim against the executor. In addition, it has been held that an impasse between co-executors that interferes with the proper administration of the estate may suffice to justify passing over one or more of them, even without a showing of wrongdoing. In all cases, the fundamental guide must be the welfare of the beneficiaries.
Removing an executor may not be enough; it may be necessary to remove both
It was apparent to Justice Milman that it was necessary to pass over at least one of the two co-executors in order for any progress to occur, and in fact, there were good reasons to pass over both of them due to untenable conflict of interest:
Who is appointed if both co-executors are removed or “passed over”?
Having concluded that both Tony and Albert should be passed over, the next question to be decided was whether to appoint an Administrator Pending Legal Proceeding (“APL”) pending the outcome of the litigation or a permanent replacement. In Weisstock, Justice Milman preferred the latter option, not being persuaded that Albert and Tony would ever be capable of cooperating effectively with one another as co-executors, even after the litigation was resolved. Even if either Tony or Albert were to resume the duties of executor alone following the conclusion of the litigation, there would still be a significant risk that the orderly administration of the estate would founder yet again over new disagreements, miscommunications or misunderstandings. Instead, it was in the best interests of the beneficiaries for both Tony and Albert to be passed over in favour of a permanent and neutral replacement. By order of the court a recently retired lawyer was appointed as sole executor of Maria’s estate.
Bottom line on removing an executor: It is possible and may be necessary to remove both
A conflict of interest, such as whether an executor has a claim against the estate or where the estate may have a claim against the executor, may disqualify an executor from acting in that capacity. In addition, where there is dissension among the co-executors themselves by which the administration of the estate grinds to a standstill or which otherwise hampers the proper administration, the courts can remove one or more of the executors. The court can appoint a temporary or permanent neutral replacement such as a professional trustee. In all cases, the court’s main consideration must be the welfare of the beneficiaries
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