The Executor’s Duties and Powers Under a Will

 

executors dutiesReznik v Matty 2013 BCSC 1346, a wills variation action in BC, has a very succinct summary of the executor’s duties and powers of under a will.

 

 

The trial in Reznik was inter alia related to a Wills Variation action where 4 beneficiaries applied  for and were awarded an interim distribution of the estate assets of $10,000 each.

 

The executor argued that there was no such authority, and the Court, as per yesterday’s blog, found it had general jurisdiction to make such an order.

 

In a nutshell, the Court concluded:  ” In short, the power given under the Will to the respondent to retain any portion of the estate in the form in which it may have been at the time of the deceased’s death does not displace the executor’s duty to distribute. As Middleton J. observed, such a power “must not be converted into a trust to hold”

 

The Executor’s Duties and Power Under the Will

[29]    An executor has a duty to settle the affairs of the estate and to distribute in accordance with the terms of the Will. A power granted to an executor exists within the context of the executor’s duty to settle the affairs of the estate and to distribute.

[30]    Feeney’s The Canadian Law of Wills, 4th ed. (Markham: LexisNexis, 2000) at 8.17 states:

The executor must not unreasonably delay in getting the assets and settling the affairs of the estate and he will be personally responsible for any loss occasioned by undue delay. There is no hard and fast rule as to what constitutes undue or unreasonable delay, but it is the practice to speak of the executor’s or administrator’s year and the courts attach importance to the question whether the alleged failure to convert or realize assets that resulted in the loss to the estate occurred within or beyond a year. Therefore, all investments that are not proper to retain should be realized within a year of the testator’s death or, in the case of an administration, within a year of the date of the grant. Normally, too, other residuary property should be liquidated and distribution made within the year.

[31]    A power to retain an asset does not override the executor’s duty to settle the affairs of the estate and to distribute. Justice Middleton in Re Sievert (1922), 61 D.L.R. 199 (O.N.S.C. App. Div.) stated at 200:

No case determines that, when trustees are given property with instructions to realise and distribute at such time as the executors think fit, any one beneficiary may demand an immediate realisation if the executors or trustees bona fide think that realisation should, in the interest of all, be delayed.

All such trustees must understand that the trust is a trust for sale and must not be converted into a trust to hold; but, so long as this is kept in mind and good faith is shewn, the Court cannot interfere and take from the trustees the power the testator has given them.

[32]    In short, the power given under the Will to the respondent to retain any portion of the estate in the form in which it may have been at the time of the deceased’s death does not displace the executor’s duty to distribute. As Middleton J. observed, such a power “must not be converted into a trust to hold”. Despite the passing of over ten years, I do not have evidence before me to show that the respondent has not acted in good faith. That said, it is apparent that the Estate holds assets of significant value (assuming the Passage Island lots have value).

Executor Must Renounce In Order to Contest the Estate

Executors fees

Executor Must Renounce to contest the will

It is fairly common in estate disputes that the executor of the will is also dissatisfied with the same will that the executor is by office bound to carry out and enforce. Since in estate claims it is necessary to sue all parties who have an interest in the estate, it then follows that the executor must be named as a defendant in any estate proceeding, and it is a rule of law that an executor cannot also be a plaintiff in his or her personal capacity. This follows from the legal concept that a party cannot be a plaintiff and the defendant in the same court action – one cannot sue oneself.

Further authority for this is Harrison v Harrison ( 1982) 12 ETR 246
It is established that a person cannot sue himself, even in a different capacity. In Pub. Trustee v. Guar. Trust Co., [1980] 2 S.C.R. 931, 19 C.P.C. 157, 7 E.T.R. 287, 115 D.L.R. (3d) 513, (sub nom. Guar. Trust Co. of Can. v. Berry Estate) 33 N.R. 271, it was held that this principle does not mean that a writ issued by an executor against himself is a nullity; rather it only means that he cannot recover judgment against himself. The majority of the Supreme Court, per Estey J., held that the writ in that case was a mere irregularity which was capable of being corrected by substitution of the Public Trustee for the executor as plaintiff. But it was agreed by counsel and accepted by the court that the matter could not have proceeded to trial and judgment had the executor remained on record as both plaintiff and defendant.