Estate Litigation: Disputes Between Co-Administrators

Estate Litigation

Administering an estate can be a difficult and time consuming task.  When a co-administrator is unreasonable, it can result in litigation.  The recent decision in Estate of Forbes McTavish (2015 BCSC 774) is one example of an estate dispute that ended up in court.  In 2012 the testator died intestate leaving three children: Robert, Lauren and James. Letters of administration were granted which made all three siblings co-administrators of the estate.  The estate was fairly modest consisting of a property valued at $380,000 and personal property with a value of approximately $61,000. 

Complications arose when the administrators discovered that the documents attaching the mortgage (valued at over $170,000) to the property appeared to be fraudulent and that $175,000 had been removed from the testator’s bank account the day before he died. It was believed that the testator’s caregiver arranged the mortgage and absconded with the money. In addition, several vehicles were transferred into the name of the caregiver and were missing. At the time of the hearing, no arrests had been made and the insurance proceeds on the stolen vehicles had been paid.

The siblings had different views on how to handle the estate. Lauren and Robert wished to move forward with passing accounts and distributing what remained in the estate.  James refused to do so. It was alleged that James had taken up residence in the home and was selling some of the testator’s personal property without depositing the funds into the estate bank account (among many other allegations).  When Lauren and Robert attempted (through counsel) to initiate a dialogue with James, he responded by claiming that he would only respond if he was paid $300 for receiving emails, $500 for receiving phone calls, and $1500 for receiving letters. In addition, James refused to take any additional steps in administering the estate until he was paid $80,000 from his co-administrators.

Robert and Lauren brought an application to remove James as an administrator on the basis that the estate was paralyzed by his refusal to take any steps fulfilling his duties.  In addition, it was alleged that he preferred his own interests to those of the estate by living in the testator’s home without paying rent for over two years.  In representing himself, James raised unsupported allegations that his siblings were complicit in the theft from the estate. At the hearing he produced an envelope which he claimed contained evidence against his siblings, but insisted he would only reveal its contents to the Judge (who refused, unless the contents were shown to all parties). James refused and the dramatic moment passed with the contents of the envelope remaining hidden.  

Section 158(3)(f) of the Wills, Estates and Succession Act permits the court to remove an administrator where the individual is unable to make decisions, is unresponsive, or is otherwise unwilling, unable or unreasonably refusing to carry out the duties of an administrator.  In this case, James’ insistence on being paid large sums of money before he would even communicate with his co-administrators meant that the Court had no difficulty finding that the requirements of that section had been met and that James should be removed as a co-administrator.  In addition, he was ordered to pay special costs of the application due to his behaviour during the hearing. The Court hoped this would “...serve as a warning to others entrusted with the important duties of administering estates: trustees who engage in this sort of nonsense will pay a high price.”

Estate administrators and their advisors should be aware of their legal options in the face of obstructionist behaviour. Sometimes a difficult administrator can only be dealt with in court. Those wishing to stay up to date with the latest developments in estate litigation and planning techniques should attend PBLI’s upcoming program Most Litigated Estate Issues: Proactive and Reactive Solutions on September 29th, 2015

 

To view all upcoming PBLI programs click here.

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Posted on March 30, 2020  |  Comments (0)


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