Hill v. Hill 2024 ONSC 3023

Estate trustees are fiduciaries who owe a duty to the beneficiaries’. This decision exemplifies the court’s deliberation on permitting an estate trustee’s resignation as well as insight into the process of an estate trustee’s removal/resignation without a replacement estate trustee.

The Deceased owned several properties spread throughout multiple countries during his lifetime. Upon his death in 2009, the Deceased appointed his brother (the “Respondent”) to act as his estate trustee. The Respondent was tasked in 2011 with the laborious job of administering the Deceased’s estate, (the “Estate”) while facing one major obstacle: a Dependant Support claim under the Succession Law Reform Act (the “Claim”) against the Estate by his common law spouse (the “Spouse”). The court ordered, payable out of the estate, the sum of $62,000 to the Deceased’s Spouse in a settlement of the support claim. Unfortunately, the Estate had insufficient assets to pay this sum.

The Deceased’s Will provided the Deceased’s Spouse with a life interest in a property located in Markham, Ontario, (the “Markham Property”). Despite being the Estate’s biggest asset, the Respondent was unable to sell such property to assist in the Estate’s shortage due to the life interest. This forced the Respondent to sell one of the Deceased’s properties in Middlesex, England to satisfy the Estate’s debts. The Deceased’s Will had allocated this property as a bequest to the Deceased’s son, however, due to the sale of the property the bequest adeemed. Ademption occurs when a testamentary gift is no longer able to pass to the beneficiary because the assets are no longer available to the testator.[1]

In 2024, an application was brought by the estate trustee for his own removal (the “Applicant”), as well as the court’s direction regarding his informal accounting. The Applicant provided the court with a medical note stating that his role as estate trustee has caused him “severe emotional distress and he was diagnosed with severe anxiety and severe depression”.[2] Pleading his removal, the Applicant asserted that a professional estate trustee was unwilling to act based on the complexity of the Estate, as well as its modest size. Additionally, the Applicant contended that the spouse’s life interest in the Markham property would add another significant delay in the administration of the Estate. Moreover, it was likely that the spouse would outlive the Applicant, and the need for the replacement of an estate trustee would then be required regardless. The Applicant stated that continuing in his position as estate trustee would compromise the effective administration of the estate.

Removal of Estate Trustee:

Citing Gonder v Gonder Estate[3], the court has inherent jurisdiction to remove an estate trustee without a replacement, in exceptional circumstances where equity demands such.[4] This action may only be exercised in the following circumstances:

“Where an alternative mode of administration can be put in place that secures the best interests of the beneficiaries and ensures that the estate’s assets are properly maintained”.[5]

However, where exceptional circumstances are not present, the court stated the following:

“When a trustee wishes to resign, it will ordinarily fall to that person to locate a replacement trustee. The modern reality is that the court is ill suited to locate -replacements.”[6]

To reiterate the words of the court, absent extraordinary circumstances, a resigning estate trustee must find their own replacement. In the rare instances, a court will allow for an estate trustees resignation without a replacement which has been described by the courts as “an extreme remedy and inappropriate in most cases”.[7]

In Hill v Hill[8], the court ruled that the Applicant may resign, effective September 2024, on the basis that he finds a replacement estate trustee. The court ordered that the beneficiaries must assist in this duty. The rationale for the court’s decision in allowing the Applicant to resign was as follows:

1. The administration of the Estate has been stalled for many years;
2. The Applicant did not create the difficult, if not unworkable, financial circumstances in which the Estate finds itself; and
3. The Applicant is not required to sacrifice his health to administer this Estate.[9]

Hill v Hill also outlined the challenges that the Estate had found itself in, mainly due to the dependant support claim, as well as the Estate’s lack of funds. The court stated that the Applicant had been fulfilling his position as estate trustee for over 12 years and such complexities were not his burden to bear.

Hill v Hill demonstrates the court’s understanding of an estate trustee’s resignation upon complex circumstances that create a significant challenge in the estate administration.

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[1] https://www.law.cornell.edu/wex/ademption

[2] ibid at para 7

[3] Ibid at para 18

[4] Ibid at para 34

[5] Ibid at para 18.

[6] Ibid at para 18.

[7] Ibid at para 18.

[8] Ibid at para

[9] Ibid at para 22.