*See the glossary below
Estate trustees are generally supposed to pay an estate’s debts, sell estate property, and finally distribute estate assets to beneficiaries according to a will and the law. But what if they don’t? Sometimes, trustees make the mistake of treating estate assets as theirs, rather than funds to be carefully administered for the benefit of others. An estate administration lawyer will not be able to help; they receive instructions from the trustee. Co-trustees and beneficiaries may have no choice but to hire their own lawyer to preserve estate assets, enforce compliance with a will or the law, or simply push a slow-moving trustee into action. In the right circumstances, the removal of the trustee may be the answer to an estate’s problems.
Often, estate trustees are not professional money managers. They are typically relatives of the deceased without financial experience or sophistication. It is not surprising that many estate trustees are not right for the job. Signs that a trustee may need to step down or be removed arise when they:
- fail to follow a will’s instructions;
- delay in selling assets or distributing funds;
- incompetently administer business assets;
- misappropriate estate funds; or
- fail to keep proper records.
Conflict of Interest
A conflict of interest means that the goals of two different parties are incompatible. In estate law, an estate trustee should not continue to act if they are in a serious conflict. Examples of estate trustee conflicts include when:
- the trustee is also a beneficiary and there is a dispute over whether a will applies, how to interpret a will, or whether someone was a dependent of the deceased;
- the trustee lives in a property owned by the estate, or uses it for storage;
- the trustee wants to buy estate property or has already done so;
- the trustee pays themselves or their friends;
- the trustee uses estate property for personal reasons, like driving the estate’s vehicle; or
- any situation in which the estate trustee may favour their own interests above the beneficiaries.
You will need a litigation lawyer to do something about an estate trustee’s conflict of interest or poor performance. A lawyer can use the court to force the trustee into action or potentially remove and replace the trustee. If a dispute will take several months to resolve, the parties may need a temporary trustee to administer the estate until the dispute is resolved.
- Beneficiary: persons interested in the estate or trust property.
- Estate: a person’s money and property in its entirety at the time of their death.
- Estate Trustee (Executor): the representative designated to carry out the terms of a will or manage estate funds pursuant to intestacy procedures.
- Intestate (Intestacy): when a person dies without a valid will.