Estate Trustee with a Will Empowered to Deal with Estate Assets without a Certificate of Appointment
In the recent decision of Kulyk v. Kulyk, an Estate Trustee with a Will was empowered to, amongst other things, deal with estate assets, including real property, despite a Certificate of Appointment of Estate Trustee (“CAET”) never having been obtained.[1]
Background
A deceased died testate, dividing the residue of his estate equally amongst his two sons, Roman and Andrew, with Roman holding Andrew’s share of residue in trust.
Roman, the Applicant, was named as Estate Trustee. He did not obtain a CAET (the “Applicant” or “Estate Trustee”).
Andrew and his children were the respondents (the “Respondents”).
The estate assets included real property (the “Properties”). The Deceased’s will did not contain language providing beneficiaries with a right to reside in the Properties.
At the time the Deceased’s death, Andrew and his children had been making use of and residing in the Properties. Following the Deceased’s death, Roman allowed Andrew and his then minor children to continue making use of the Properties.
Position of the Parties
Roman sought to have the Properties sold. He claimed that estate funds had been used to cover expenses related to the Respondents’ use of the Properties, with Roman subsequently using his own funds for expenses once a shortfall arose; that the Respondents were causing nuisance and contributing to deterioration of the Properties; and, that the Respondents were independently renting out portions of the Properties without accounting for rental income.
Being that a CAET had not been obtained, Roman sought an Order from the court that, amongst other things:
- vested the Properties in him as Estate Trustee with a Will;
- provided him authority to obtain vacant possession of and sell the Properties; and
- required the respondents to account for any rental revenue received in respect of the Properties.
The Respondents did not respond to the application.
Analysis
On the issue of whether Roman’s failure to obtain a CAET was fatal to the relief being sought, the Honourable Justice Faieta cited our colleague, Albert Oosterhoof for the position that Estate Trustees derive their authority from the terms of a will itself, while the CAET primarily serves to authenticate, rather than vest, those powers in the estate trustee:
The question is often asked: Is it necessary to obtain probate [certificate of appointment of estate trustee] in every case? The answer is, no. This is because executors derive their authority from the will rather than from the probate process. As a result, executors have the lawful authority to deal with estate property even if they do not obtain probate. Likewise, courts have jurisdiction over wills (and the executors appointed thereunder) regardless of whether they are submitted for probate. … The primary function served by probate [certificate of appointment of estate trustee] is therefore not to vest named executors with authority to deal with estate property but to authenticate to third parties that the persons presenting themselves as the executors are indeed the persons (more specifically, the only persons) with that authority. See Albert R. Oosterhoff et al. Oosterhoff on Wills, 9th ed (Toronto: Thomson Reuters Canada Limited, 2021) at page 33.[2]
Accordingly, there was no need for an Order vesting, providing possession of, or permitting sale of the Properties as Roman already held legal title in trust for the Estate and derived the authority to sell the Properties from the terms of the will itself, despite a CAET not having been obtained.
Concluding Comments
The within decision affirms that the issuance of a CAET is not a necessary precondition to an Estate Truste with a Will exercising their authority. Instead, such authority is derived from the terms of a will itself, while the CAET serves to authenticate those powers already vested in the Estate Trustee.
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[1] Kulyk v. Kulyk, 2024 ONSC 4213.
[2] Ibid at para 10; Albert R. Oosterhoff et al. Oosterhoff on Wills, 9th ed (Toronto: Thomson Reuters Canada Limited, 2021) at page 33
Written by: WEL Partners
Posted on: August 21, 2024
Categories: Commentary, Estate Trustees, Trusts, WEL Newsletter
In the recent decision of Kulyk v. Kulyk, an Estate Trustee with a Will was empowered to, amongst other things, deal with estate assets, including real property, despite a Certificate of Appointment of Estate Trustee (“CAET”) never having been obtained.[1]
Background
A deceased died testate, dividing the residue of his estate equally amongst his two sons, Roman and Andrew, with Roman holding Andrew’s share of residue in trust.
Roman, the Applicant, was named as Estate Trustee. He did not obtain a CAET (the “Applicant” or “Estate Trustee”).
Andrew and his children were the respondents (the “Respondents”).
The estate assets included real property (the “Properties”). The Deceased’s will did not contain language providing beneficiaries with a right to reside in the Properties.
At the time the Deceased’s death, Andrew and his children had been making use of and residing in the Properties. Following the Deceased’s death, Roman allowed Andrew and his then minor children to continue making use of the Properties.
Position of the Parties
Roman sought to have the Properties sold. He claimed that estate funds had been used to cover expenses related to the Respondents’ use of the Properties, with Roman subsequently using his own funds for expenses once a shortfall arose; that the Respondents were causing nuisance and contributing to deterioration of the Properties; and, that the Respondents were independently renting out portions of the Properties without accounting for rental income.
Being that a CAET had not been obtained, Roman sought an Order from the court that, amongst other things:
The Respondents did not respond to the application.
Analysis
On the issue of whether Roman’s failure to obtain a CAET was fatal to the relief being sought, the Honourable Justice Faieta cited our colleague, Albert Oosterhoof for the position that Estate Trustees derive their authority from the terms of a will itself, while the CAET primarily serves to authenticate, rather than vest, those powers in the estate trustee:
The question is often asked: Is it necessary to obtain probate [certificate of appointment of estate trustee] in every case? The answer is, no. This is because executors derive their authority from the will rather than from the probate process. As a result, executors have the lawful authority to deal with estate property even if they do not obtain probate. Likewise, courts have jurisdiction over wills (and the executors appointed thereunder) regardless of whether they are submitted for probate. … The primary function served by probate [certificate of appointment of estate trustee] is therefore not to vest named executors with authority to deal with estate property but to authenticate to third parties that the persons presenting themselves as the executors are indeed the persons (more specifically, the only persons) with that authority. See Albert R. Oosterhoff et al. Oosterhoff on Wills, 9th ed (Toronto: Thomson Reuters Canada Limited, 2021) at page 33.[2]
Accordingly, there was no need for an Order vesting, providing possession of, or permitting sale of the Properties as Roman already held legal title in trust for the Estate and derived the authority to sell the Properties from the terms of the will itself, despite a CAET not having been obtained.
Concluding Comments
The within decision affirms that the issuance of a CAET is not a necessary precondition to an Estate Truste with a Will exercising their authority. Instead, such authority is derived from the terms of a will itself, while the CAET serves to authenticate those powers already vested in the Estate Trustee.
—
[1] Kulyk v. Kulyk, 2024 ONSC 4213.
[2] Ibid at para 10; Albert R. Oosterhoff et al. Oosterhoff on Wills, 9th ed (Toronto: Thomson Reuters Canada Limited, 2021) at page 33
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