In Aber Estate, a Trustee applied to pass her accounts.1 Her only sister raised countless issues with respect to the accounts. A Notice of Objections was filed and the matter proceeded to a hearing.
With one minor exception, the court found that all of the objections lacked merit and that they delayed and complicated the administration of the estate.
The costs decision has yet to be published, but it will be difficult for the objecting sister to argue that the Trustee should not be indemnified. This decision should serve as a caution to those who may be tempted to pursue judgment based on objections that are inconsequential or without merit.
Facts
Erna was the attorney for property and subsequently the estate trustees for her parents. Erna was the primary caregiver for her parents as they aged. She paid their bills, filed their tax returns, invested their savings, maintained their home, did their shopping, and took them to their medical appointments. Erna’s only sister, Hilda, lived in the US and visited her parents two or three times a year.
Prior to the death of their parents, Hilda brought an application for an Order directing Erna to pass her attorney accounts, claiming that their parents were upset with Erna’s management of their assets. However, their father swore in an affidavit that he was aware of Hilda’s application and did not want Hilda to receive any of his financial information or see a copy of his Will before he died. Hilda’s application was dismissed and she was ordered to pay her father’s and Erna’s costs, which she elected not to do.
After both parents had died, Erna retained the assistance of a professional to prepare the estate accounts and applied to pass her attorney and estate accounts. Hilda took issue with Erna’s management of the estate investments, Erna’s executor compensation, and Erna’s fees as attorney for property. Hilda continued to request additional details, information and accounting over a period of 14 months, and then filed the Notice of Objection.
The Court found that the delays in the passing of accounts were attributable to:
(a) numerous requests by [Hilda] for additional details, information and documentation regarding the account statements prepared by counsel for the estate in the format required by this Court;
(b) subsequent requests by [Hilda] that the estate trustee accounts be prepared by a certified accountant pursuant to standard accounting practices rather than in the form required by the Court in order that they could be submitted for audit, if [Hilda] deemed necessary;
(c) delays from the time that the estate trustee accounts prepared by the accountant were provided to [Hilda] in March 2009 until [Hilda] retained counsel, attended in Toronto to review all accounts and supporting documentation, requested additional documentation and ultimately filed the Notice of Objection in April 2011.2
Issues
The matter proceeded to a hearing before Justice Carole Brown regarding the following issues:
1. The compensation claimed by [Erna] as power of attorney and estate trustee. The objector, [Hilda], submits that it is not fair and reasonable given that it was a simple estate that was managed by [Erna] as attorney and subsequently as trustee.
2. Cash transactions which appear in the accounts as capital disbursements (CDs), which [Hilda] claims are not accounted for; these comprise, in greatest part, groceries, household expenses, supplies and medications.
3. The valuation of the house as it appeared in the power of attorney accounts (original assessment in 2002) and subsequently in the estate trustee accounts (as at 2008), which [Hilda] argues is overstated by $100,000.
4. Costs of roofing repairs in 2004 and 2006, which [Hilda] argues should be deducted from the estate trustee’s compensation, as she argues that the trustee received a personal benefit related to the roofing repairs when she inherited the home.
5. Legal fees which [Hilda] says were awarded to [Erna] personally, but paid out of the estate, and which should be deducted from the compensation awarded to her.3
With respect to the attorney and trustee compensation claimed by Erna, the court found that the amounts claimed were fair and reasonable. In addition, Justice Brown observed:
While the estate was not complicated, it was time-consuming due to the delays occasioned by the numerous demands by the objector for more and more detailed explanations of expenditures, much of which had been provided previously. [Erna] spent considerable amounts of time from February of 2011 onward dealing with [Hilda]’s demands to provide further information with breakdowns of the accounting and backup documentation. [Erna] displayed skill and ability in performing her duties. I do not find [Hilda]’s arguments that [Erna] mismanaged the administration of the estate, nor that her administration of the estate was unsuccessful, to be persuasive, and reject those arguments.4
With respect to the cash transactions which Hilda claimed were unaccounted for, the court found that Erna kept careful records and was forthright and candid in her evidence. Justice Brown rejected Hilda’s various assertions that Erna spent too much money on groceries, used the grocery money for her own benefit, failed to account for miscellaneous purchases, and mismanaged their father’s pension cheques by giving him small amounts of PIN money for his own use despite his lack of capacity.
Decision
The only adjustment made by Justice Brown to the accounts was the reduction of the reported value of the property from $890,000 (as reported for the purpose of probate) to $820,000.5
The court found that all other objections raised by Hilda to be without merit.
Commentary
No decision as to costs has been published yet. Given the multiple objections and demands made by Hilda, Erna’s costs must be considerable. We look forward to reading the costs decision in the event that the parties are unable to settle the matter.
These reasons should serve as a reminder to beneficiaries that objections can sometimes be a gamble. To proceed to a hearing on a long list of objections that are insignificant, or without merit, can be costly.
—
1. Aber Estate, 2013 ONSC 6363 (CanLII) http://canlii.ca/t/g2g19.
2. Ibid ¶ 16.
3. Ibid ¶ 30.
4. Ibid ¶ 42.
5. Ibid ¶ 67.
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Written by: WEL Partners
Posted on: January 10, 2014
Categories: Commentary
In Aber Estate, a Trustee applied to pass her accounts.1 Her only sister raised countless issues with respect to the accounts. A Notice of Objections was filed and the matter proceeded to a hearing.
With one minor exception, the court found that all of the objections lacked merit and that they delayed and complicated the administration of the estate.
The costs decision has yet to be published, but it will be difficult for the objecting sister to argue that the Trustee should not be indemnified. This decision should serve as a caution to those who may be tempted to pursue judgment based on objections that are inconsequential or without merit.
Facts
Erna was the attorney for property and subsequently the estate trustees for her parents. Erna was the primary caregiver for her parents as they aged. She paid their bills, filed their tax returns, invested their savings, maintained their home, did their shopping, and took them to their medical appointments. Erna’s only sister, Hilda, lived in the US and visited her parents two or three times a year.
Prior to the death of their parents, Hilda brought an application for an Order directing Erna to pass her attorney accounts, claiming that their parents were upset with Erna’s management of their assets. However, their father swore in an affidavit that he was aware of Hilda’s application and did not want Hilda to receive any of his financial information or see a copy of his Will before he died. Hilda’s application was dismissed and she was ordered to pay her father’s and Erna’s costs, which she elected not to do.
After both parents had died, Erna retained the assistance of a professional to prepare the estate accounts and applied to pass her attorney and estate accounts. Hilda took issue with Erna’s management of the estate investments, Erna’s executor compensation, and Erna’s fees as attorney for property. Hilda continued to request additional details, information and accounting over a period of 14 months, and then filed the Notice of Objection.
The Court found that the delays in the passing of accounts were attributable to:
(a) numerous requests by [Hilda] for additional details, information and documentation regarding the account statements prepared by counsel for the estate in the format required by this Court;
(b) subsequent requests by [Hilda] that the estate trustee accounts be prepared by a certified accountant pursuant to standard accounting practices rather than in the form required by the Court in order that they could be submitted for audit, if [Hilda] deemed necessary;
(c) delays from the time that the estate trustee accounts prepared by the accountant were provided to [Hilda] in March 2009 until [Hilda] retained counsel, attended in Toronto to review all accounts and supporting documentation, requested additional documentation and ultimately filed the Notice of Objection in April 2011.2
Issues
The matter proceeded to a hearing before Justice Carole Brown regarding the following issues:
1. The compensation claimed by [Erna] as power of attorney and estate trustee. The objector, [Hilda], submits that it is not fair and reasonable given that it was a simple estate that was managed by [Erna] as attorney and subsequently as trustee.
2. Cash transactions which appear in the accounts as capital disbursements (CDs), which [Hilda] claims are not accounted for; these comprise, in greatest part, groceries, household expenses, supplies and medications.
3. The valuation of the house as it appeared in the power of attorney accounts (original assessment in 2002) and subsequently in the estate trustee accounts (as at 2008), which [Hilda] argues is overstated by $100,000.
4. Costs of roofing repairs in 2004 and 2006, which [Hilda] argues should be deducted from the estate trustee’s compensation, as she argues that the trustee received a personal benefit related to the roofing repairs when she inherited the home.
5. Legal fees which [Hilda] says were awarded to [Erna] personally, but paid out of the estate, and which should be deducted from the compensation awarded to her.3
With respect to the attorney and trustee compensation claimed by Erna, the court found that the amounts claimed were fair and reasonable. In addition, Justice Brown observed:
While the estate was not complicated, it was time-consuming due to the delays occasioned by the numerous demands by the objector for more and more detailed explanations of expenditures, much of which had been provided previously. [Erna] spent considerable amounts of time from February of 2011 onward dealing with [Hilda]’s demands to provide further information with breakdowns of the accounting and backup documentation. [Erna] displayed skill and ability in performing her duties. I do not find [Hilda]’s arguments that [Erna] mismanaged the administration of the estate, nor that her administration of the estate was unsuccessful, to be persuasive, and reject those arguments.4
With respect to the cash transactions which Hilda claimed were unaccounted for, the court found that Erna kept careful records and was forthright and candid in her evidence. Justice Brown rejected Hilda’s various assertions that Erna spent too much money on groceries, used the grocery money for her own benefit, failed to account for miscellaneous purchases, and mismanaged their father’s pension cheques by giving him small amounts of PIN money for his own use despite his lack of capacity.
Decision
The only adjustment made by Justice Brown to the accounts was the reduction of the reported value of the property from $890,000 (as reported for the purpose of probate) to $820,000.5
The court found that all other objections raised by Hilda to be without merit.
Commentary
No decision as to costs has been published yet. Given the multiple objections and demands made by Hilda, Erna’s costs must be considerable. We look forward to reading the costs decision in the event that the parties are unable to settle the matter.
These reasons should serve as a reminder to beneficiaries that objections can sometimes be a gamble. To proceed to a hearing on a long list of objections that are insignificant, or without merit, can be costly.
—
1. Aber Estate, 2013 ONSC 6363 (CanLII) http://canlii.ca/t/g2g19.
2. Ibid ¶ 16.
3. Ibid ¶ 30.
4. Ibid ¶ 42.
5. Ibid ¶ 67.
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