Executor Removed For Conflict of Interest
Re Thomasson Estate 2011 BCSC 481 is a classic conflict of interest situation that required the court to passover one executor ,where another co executor questioned a certain transfer of property that involved the executor.
The 2 parents had 4 children and they operated a farm through a company.
The parents made a will in 1997 which named all 4 children as executors.
They made codicils in 2001 that named only 2 of the children as executors. (Child A and B)
Prior to the parents deaths, they transferred their most significant assets to child A .
Upon the death of the last parent in 2010, child B wished to make inquiries into the transfer of the various properties to child A.
Child B wished to determine what, if any, interest the estate had in those properties, and what further actions needed to be taken.
Child B applied to court for an order that child A be passed over as executor, and that probate be granted only to child B
The court grant the order based on a preceived conflict of interest between child A in his role as executor, and his interest in his personal capacity.
Accordingly the court granted probate naming child B as the sole executor and trustee.
While courts are hesitant to interfere with the testator’s right to nominate his or her executor, the court has statutory power under section 31 of the Trustee act, and an inherent power to remove or passover a trustee or executor.
The main test for removal of the trustee is the welfare of the beneficiaries.
Child A was not a beneficiary under either of his parents will and hihs only interest in the estate was as executor.
If the executor was to institute an action as a result of the transfer of the property, it would be against child A
But in his capacity as executor, A could not attack the transfer of the property to himself ,while at the same time maintaining, in his personal capacity, that the transfer of property to himself was proper.
It is the experience of disinherited.com that there are many such perceived conflicts of interest involving executors and previous transactions that may have occurred prior to the death of the testator.