Being appointed, and serving as, Estate Trustee is often seen as a final act of devotion, but the reality of the role extends far beyond sentimental legacy. The role is defined by the uncompromising weight of its fiduciary duties. When one accepts this position, they assume a heavy professional burden wherein every decision must consider a variety of fiduciary duties/ obligations.
Introduction – The Nature of the Fiduciary Relationship
While the terms of “fiduciary”, “fiduciary duties”, and/ or “fiduciary obligations” are frequently thrown around by legal practitioners without a second thought these terms denote a specific type of relationship that brings with it a set of significant responsibilities and obligations.
This post will examine the specific duties and high-level obligations imposed on any individual who steps into the role of a “fiduciary”.
The opening paragraph discusses an Estate Trustee (also known as an executor)[1] as this is perhaps the most common example of a fiduciary that people will encounter. As discussed in the previous Fiduciary Relationships post,[2] Estate Trustees are an example of a per se fiduciary relationship. Nonetheless, whether you are acting as a trustee, a corporate director, a legal guardian, or determined to have been acting as an ad hoc fiduciary, the law imposes specific duties to ensure the protection of the vulnerable.[3]
Core Fiduciary Duties
As a starting point, the fiduciary relationship requires every fiduciary to act with the utmost loyalty, good faith, and without conflict of interest. These are not separate ideas; rather, they are complementary dimensions of a single overarching obligation to serve the vulnerable’s best interests.
Broadly, in the context of a trustee-beneficiary fiduciary relationship, the Supreme Court of Canada in their decision of Valard Construction Ltd. v Bird Construction Co.,[4] has identified three duties as fundamental to all fiduciary relationships:
- A fiduciary must act honestly and with the level of skill and prudence expected of a reasonable person of business managing their own affairs;
- A fiduciary cannot delegate their office to another; and
- A fiduciary cannot profit personally from their dealings with the trust property or with the beneficiaries.[5]
A high-level overview of each of these duties is provided below.
- The Duty to Act Honestly with Reasonable Skill and Prudence:
The duty to act honestly and with the level of skill and prudence expected of a reasonable person of business managing their own affairs does not impose a standard of perfection, nor does it impose a standard of a trained legal or financial professional.[6]
The law requires diligent, informed, and careful judgment that a sensible person would bring to bear on their own financial affairs when those affairs genuinely matter to them.[7]
In an Estates context, this means that an Estate Trustee must actively inform themselves about the assets they are administering, seek professional advice where a reasonable person would do so, invest estate funds prudently.[8] As the Supreme Court of Canada confirmed in Norberg v Wynrib, a fiduciary must exercise the power entrusted to them exclusively for the beneficiary’s benefit, and a trustee who allows estate assets to languish, misses tax deadlines, or fails to obtain proper valuations before disposing of property cannot simply plead inexperience.[9]
Acceptance of the role is acceptance of the standard.
- The Non-Delegation Rule:
The obligations imposed on a fiduciary are specific to that individual, and the law generally does not permit the fiduciary to simply hand off their responsibilities to someone else without proper authorization.[10] In practice, this means that an Estate Trustee cannot appoint someone to make decisions in their place and wash their hands of the responsibility.
The non-delegation rule does come with an important caveat/ distinction: A trustee may engage professionals such as accountants, lawyers, investment advisors, or real estate agents to assist with specific tasks; however, the fiduciary must remain personally responsible for the decisions made and cannot use the involvement of a professional as an absolute shield against liability for their own breach.[11]
In short, even where delegation is authorized, the fiduciary typically retains a supervisory duty and must act prudently in selecting and overseeing the delegate.
- The Duty of Loyalty, Even-Handedness, & the No-Profit Rule
In many ways, the duty of loyalty is the underlying principle to the other duties discussed so far. It requires the fiduciary to always subordinate their own interests to those of the beneficiary.[12] Critically, however, this duty is not limited to one-on-one loyalty: it also requires a fiduciary to act with even-handedness where multiple beneficiaries are involved.[13]
Generally, a fiduciary must act impartially when dealing with different classes of beneficiaries, and must not exercise their powers in a way that favours the interests of one beneficiary, or one class of beneficiaries, over another.[14]
While the duty of loyalty and rule of even-handedness concerns who the fiduciary serves, the no-profit rule concerns what the fiduciary may personally gain from that service.
The foundational authority is Keech v. Sandford,[15] where the Court explicitly held that the trustee was required to account for unauthorized profits even though the beneficiary suffered no loss and even though the trustee had first attempted in good faith to secure the lease for the infant’s benefit.
This strict application was reaffirmed and applied in the Canadian context in Strother v. 3464920 Canada Inc.[16] where the Supreme Court of Canada ordered an account of profits against a solicitor who exploited a tax loophole for personal gain after advising a client that no such loophole existed.
Final Remarks
In sum, the law of fiduciary obligations imposes a strict and unified standard of conduct on all fiduciaries. Fiduciaries must act with diligence, honesty, and sound judgment, they must remain personally accountable for the administration of their office,[17] and must demonstrate unwavering loyalty.
Breach of one’s fiduciary duty,[18] tends not to depend on bad faith or loss, but on deviation from the strict standards Equity demands. Accordingly, acceptance of a fiduciary role is, in effect, acceptance of personal exposure to liability where these core duties.
—
[1] For more about basic Estate terminology, check out my blog all about probate – found here.
[2] Found here.
[3] Vulnerable within the meaning of the fiduciary relationship caselaw, see Frame v. Smith, 1987 CarswellOnt 347 at para 45 or Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261 at paras 27-29.
[4] Valard Construction Ltd. v Bird Construction Co 2018 SCC 8.
[5] Ibid., at para 17.
[6] Baran v Cranston, 2022 ONSC 6636 (CanLII), at para 14 citing Fales v. Canada Permanent Trust Co., 1976 CanLII 14 (SCC), [1977] 2 S.C.R. 302 at p. 315 (“Fales”)
[7] Fales, at p. 267.
[8] Ibid., at p 271-272; and in Ontario, the Trustee Act, RSO 1990, c T.23, at section 27, imposes a statutory standard of care codifying this obligation.
[9] Norberg v Wynrib, 1992 CarswellBC 155, at para 98.
[10] Guerin v The Queen, 1984 CanLII 25 (SCC), [1984] 2 SCR 335, at p 384.
[11] Fales, at 317 and 319.
[12] Hodgkinson v Simms, [1994] 3 SCR 377, at pp 405-406.
[13] Wewaykum Indian Band v Canada, 2002 SCC 79, at para 94.
[14] Ontario (Public Trustee) v TD Bank (1993), 13 O.R. (3d) 725, at para 35.
[15] Keech v Sandford, [1726] EWHC Ch J76, 10.
[16] Strother v 3464920 Canada Inc., 2007 SCC 24, at paras 74-77.
[17] Notwithstanding the permissible use of professional assistance.
[18] To be discussed further in another entry.
Written by: Grant Swedak
Posted on: April 17, 2026
Categories: Commentary, Fiduciary Relationships Series
Being appointed, and serving as, Estate Trustee is often seen as a final act of devotion, but the reality of the role extends far beyond sentimental legacy. The role is defined by the uncompromising weight of its fiduciary duties. When one accepts this position, they assume a heavy professional burden wherein every decision must consider a variety of fiduciary duties/ obligations.
Introduction – The Nature of the Fiduciary Relationship
While the terms of “fiduciary”, “fiduciary duties”, and/ or “fiduciary obligations” are frequently thrown around by legal practitioners without a second thought these terms denote a specific type of relationship that brings with it a set of significant responsibilities and obligations.
This post will examine the specific duties and high-level obligations imposed on any individual who steps into the role of a “fiduciary”.
The opening paragraph discusses an Estate Trustee (also known as an executor)[1] as this is perhaps the most common example of a fiduciary that people will encounter. As discussed in the previous Fiduciary Relationships post,[2] Estate Trustees are an example of a per se fiduciary relationship. Nonetheless, whether you are acting as a trustee, a corporate director, a legal guardian, or determined to have been acting as an ad hoc fiduciary, the law imposes specific duties to ensure the protection of the vulnerable.[3]
Core Fiduciary Duties
As a starting point, the fiduciary relationship requires every fiduciary to act with the utmost loyalty, good faith, and without conflict of interest. These are not separate ideas; rather, they are complementary dimensions of a single overarching obligation to serve the vulnerable’s best interests.
Broadly, in the context of a trustee-beneficiary fiduciary relationship, the Supreme Court of Canada in their decision of Valard Construction Ltd. v Bird Construction Co.,[4] has identified three duties as fundamental to all fiduciary relationships:
A high-level overview of each of these duties is provided below.
The duty to act honestly and with the level of skill and prudence expected of a reasonable person of business managing their own affairs does not impose a standard of perfection, nor does it impose a standard of a trained legal or financial professional.[6]
The law requires diligent, informed, and careful judgment that a sensible person would bring to bear on their own financial affairs when those affairs genuinely matter to them.[7]
In an Estates context, this means that an Estate Trustee must actively inform themselves about the assets they are administering, seek professional advice where a reasonable person would do so, invest estate funds prudently.[8] As the Supreme Court of Canada confirmed in Norberg v Wynrib, a fiduciary must exercise the power entrusted to them exclusively for the beneficiary’s benefit, and a trustee who allows estate assets to languish, misses tax deadlines, or fails to obtain proper valuations before disposing of property cannot simply plead inexperience.[9]
Acceptance of the role is acceptance of the standard.
The obligations imposed on a fiduciary are specific to that individual, and the law generally does not permit the fiduciary to simply hand off their responsibilities to someone else without proper authorization.[10] In practice, this means that an Estate Trustee cannot appoint someone to make decisions in their place and wash their hands of the responsibility.
The non-delegation rule does come with an important caveat/ distinction: A trustee may engage professionals such as accountants, lawyers, investment advisors, or real estate agents to assist with specific tasks; however, the fiduciary must remain personally responsible for the decisions made and cannot use the involvement of a professional as an absolute shield against liability for their own breach.[11]
In short, even where delegation is authorized, the fiduciary typically retains a supervisory duty and must act prudently in selecting and overseeing the delegate.
In many ways, the duty of loyalty is the underlying principle to the other duties discussed so far. It requires the fiduciary to always subordinate their own interests to those of the beneficiary.[12] Critically, however, this duty is not limited to one-on-one loyalty: it also requires a fiduciary to act with even-handedness where multiple beneficiaries are involved.[13]
Generally, a fiduciary must act impartially when dealing with different classes of beneficiaries, and must not exercise their powers in a way that favours the interests of one beneficiary, or one class of beneficiaries, over another.[14]
While the duty of loyalty and rule of even-handedness concerns who the fiduciary serves, the no-profit rule concerns what the fiduciary may personally gain from that service.
The foundational authority is Keech v. Sandford,[15] where the Court explicitly held that the trustee was required to account for unauthorized profits even though the beneficiary suffered no loss and even though the trustee had first attempted in good faith to secure the lease for the infant’s benefit.
This strict application was reaffirmed and applied in the Canadian context in Strother v. 3464920 Canada Inc.[16] where the Supreme Court of Canada ordered an account of profits against a solicitor who exploited a tax loophole for personal gain after advising a client that no such loophole existed.
Final Remarks
In sum, the law of fiduciary obligations imposes a strict and unified standard of conduct on all fiduciaries. Fiduciaries must act with diligence, honesty, and sound judgment, they must remain personally accountable for the administration of their office,[17] and must demonstrate unwavering loyalty.
Breach of one’s fiduciary duty,[18] tends not to depend on bad faith or loss, but on deviation from the strict standards Equity demands. Accordingly, acceptance of a fiduciary role is, in effect, acceptance of personal exposure to liability where these core duties.
—
[1] For more about basic Estate terminology, check out my blog all about probate – found here.
[2] Found here.
[3] Vulnerable within the meaning of the fiduciary relationship caselaw, see Frame v. Smith, 1987 CarswellOnt 347 at para 45 or Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24 (CanLII), [2011] 2 SCR 261 at paras 27-29.
[4] Valard Construction Ltd. v Bird Construction Co 2018 SCC 8.
[5] Ibid., at para 17.
[6] Baran v Cranston, 2022 ONSC 6636 (CanLII), at para 14 citing Fales v. Canada Permanent Trust Co., 1976 CanLII 14 (SCC), [1977] 2 S.C.R. 302 at p. 315 (“Fales”)
[7] Fales, at p. 267.
[8] Ibid., at p 271-272; and in Ontario, the Trustee Act, RSO 1990, c T.23, at section 27, imposes a statutory standard of care codifying this obligation.
[9] Norberg v Wynrib, 1992 CarswellBC 155, at para 98.
[10] Guerin v The Queen, 1984 CanLII 25 (SCC), [1984] 2 SCR 335, at p 384.
[11] Fales, at 317 and 319.
[12] Hodgkinson v Simms, [1994] 3 SCR 377, at pp 405-406.
[13] Wewaykum Indian Band v Canada, 2002 SCC 79, at para 94.
[14] Ontario (Public Trustee) v TD Bank (1993), 13 O.R. (3d) 725, at para 35.
[15] Keech v Sandford, [1726] EWHC Ch J76, 10.
[16] Strother v 3464920 Canada Inc., 2007 SCC 24, at paras 74-77.
[17] Notwithstanding the permissible use of professional assistance.
[18] To be discussed further in another entry.
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