Power of Attorney Creates Fiduciary Relationship

Power of Attorney Creates Fiduciary Relationship

Wang v Wang 20120 BCCA 15 followed the appeal court’s previous decision in Houston v. Houston, 2012 BCCA 300 finding that the grant of power from the donor to the attorney created a fiduciary duty and is a type of agency.

The court referred to the three conditions of the fiduciary duty, as determined by the Supreme Court of Canada in Frame v Smith (1987)2 SCR 99, namely:

1) that the person, here, the attorney, has scope to exercise some discretion of power;
2) the person can unilaterally exercise this discretion or power to affect the legal or personal interests of the beneficiary , here the donor;
3) and the beneficiary is peculiarly vulnerable or at the mercy of the person.

The appeal court stated that with respect to a power of attorney, the three Frame characteristics will always exist, even if the discretionary power is narrowly circumscribed by the instrument.

The court stated that the correct question to ask in considering whether fiduciary duty was created by the power of attorney, in the narrow scope of activity authorized by the instrument, the court is not concerned with the foundation of the parties relationship, which assuredly was contractual, but rather, the question is whether, in respect to authorizing the attorney to create a mortgage over the donor’s interest, the attorney was bound by a fiduciary duty not to prefer himself over the donor. If it is a question of law, the attorney was bound, through the power of attorney, to a fiduciary duty to the donor.

The court then asked what is the content of that fiduciary duty?

The standard content of the fiduciary duty was stated in Strotyher v 3464920 Canada Inc 2007 SCC 24:

“the other (the beneficiary) is entitled to expect that the fiduciary will be concerned solely for the beneficiaries interests, never the fiduciary’s own”

In Egli v Egli 2004 BCSC 529 the court stated it is the attorneys duty to use the power only for the benefit of the donor or and not for the attorney’s own profit, benefit or advantage. The attorney can only use the power for his or her own benefit when it is done with the full knowledge and consent of the donor.

BC Estate Lawyer-Power of Attorney is a Fiduciary

Power of Attorney is a Fiduciary - Disinherited

Trevor Todd and Jackson todd have handled contested estates for over sixty combined years, including breach of fiduciary duties of powers of attorney.


Meng Estate v Liem 2019 BCCA 127 confirmed that a person acting under a power of attorney is an agent held to the standard of conduct to which equity holds a fiduciary.

Those obligations involved, at least, that even where the attorney asked gratuitously, he or she has a duty to account, to exercise reasonable care, as would a typically prudent person managing his or her own affairs, and not to act contrary to the interests of the donor McMullen v Webber 2006 BCSC 1656 at para.52.

A claim for breach of fiduciary duty carries with it the staunch of dishonesty, if not of deceit, then of constructive fraud. Nocton v Lord Ashburton (1914) AC 932(HL)

The appeal court overturned a finding of a breach of fiduciary duty by the acting attorney and stated that even though Mr.Liem was in a fiduciary relationship with the opposing party, not every potential breach of duty is a breach of fiduciary duty. The court found

A fiduciary may breach duties owed in contract or negligence without those breaches being transformed into breaches of fiduciary duty. Girardet v Crease & Co. (1987) 11 BCLR (2d) 361 .

At paragraph 35 the appeal court stated “typically, a breach of fiduciary duty captures circumstances in which there is a breach of the duty of loyalty owed by the fiduciary and include circumstances involving acting in the face of a conflict, preferring a personal interest, taking a secret profit, acting dishonestly or in bad faith, or a variety of similar or related circumstances. This is not an exhaustive list.”
But there are criteria for distinguishing a breach of fiduciary duty from negligence by the attorney .
The court found that there was no basis in evidence to find that the appellant acted dishonestly or in the face of a conflict of interest, forwarded the wishes of the opposing party, preferred his interest to theirs, or in any way benefited from signing the contract. The court found that he attempted to fulfill his duty of loyalty.

The court determined that the real complaint was that the attorney failed to exercise the care, diligence and skill of a reasonably prudent person by negligently failing to ascertain and thereby take into account the opposing parties current wishes, resulting in the sale that was not in their best interest because they changed their minds and then disagreed with the price.

The claim was really one of negligence, not of breach of fiduciary duty.

The duties of an attorney are codified in section 19 of the Power of Attorney act:

1) an attorney must:
a) act honestly and in good faith
b) exercise the care, diligence and skill of a reasonably prudent person,
c) act within the authority given in the enduring power of attorney and under any an enactment, and
d) keep prescribed records and produce the prescribed records for inspection and copying at the request of the adult.

2) When managing and making decisions about the adults financial affairs, an attorney must act in the adult’s best interests, taking into account the adults current wishes, no one beliefs and values, and any directions to the attorney said out in the enduring power of attorney.

Fiduciary Must Account For Breach of Duty

The law is clear that a fiduciary who has breached a duty must account, but only for what the fiduciary acquired in consequence of the breach of duty.

The High Court of Australia in Warman International v Dwyer (1995) 128 ALR 201 (HCA) at 214 stated:

“ In determining the proper basis for an account of profits, it is of first importance in this, as in other cases, to ascertain precisely what it was that was acquired in consequence of the fiduciary’s breach of duty. And in some situation, it may also be relevant to ascertain what was lost by the plaintiff.

That passage was quoted with approval in 346-4920 Canada Inc. v Strother 2007 SCC 24.

The Supreme Court of Canada reiterated that there must be a causal connection between a breach of fiduciary duty and any benefits obtained by the wrongdoer before the court can order an accounting or disgorgement of the benefits.

There must be a causal relationship between the breach of fiduciary duty and the profits before an order for an accounting should be ordered.

The court also reiterated that equitable doctrined should not be used to impose awards out of proportion to the fiduciary’s behavior.

An accounting for profits is an equitable remedy and is not so rigid as to be susceptible to being used as a vehicle for punishing defendants with harsh damage awards out of all proportion to their actual behavior.

To the same affect the High Court of Australia noted in the Warman decision from at paragraphs 211 – 12 that the stringent rule requiring a fiduciary to account for profits can be carried to extremes and in cases outside the realm of specific assets, the liability of the fiduciary should not be transferred into a vehicle for the unjust enrichment of the plaintiff.

In the Strother case, the court rejected Mr. Struthers argument that most of the amount of profit he earned came from his own skill and ability as a lawyer. The majority of the Supreme Court held that Strother must account for the profits he earned from the new vehicles up to a certain point in time, but not thereafter.

The majority was of the view that the purpose of deterring a lack of faithfulness was adequately addressed by requiring Strother to disgorge the profits he earned from the new venture during the time that he or his law firm continued to have a solicitor client relationship with the client.

Common Types of Financial Abuse by Caregivers

Common Types of Financial Abuse by Caregivers

A British Columbia nurse was fined by the College of registered nurses in the amount of $17,500, plus ordered to pay investigation costs of $16,500 for financial abuse of an elderly couple, now deceased.

The nurses misdeeds included being the couple’s power of attorney, putting her name on title to their mobile home, paying for her dentistry, vision care and $1600 a month medications, all on top of her monthly salary.

The nurses college rather understatedly reported that she “failed to maintain appropriate boundaries in her seeking of substantial financial benefits from an informed client.”

One of the concerns expressed by the nurses college was that with an aging population with many having significant assets, there is a healthcare worker staff shortage and caregivers may be hired that are somewhat “circumspect”.

Many of our aging population have both the desire and the financial means to remain living in their homes for as long as physically or mentally possible, which gives more opportunity for financial abuse or physical neglect by a devious caregiver.

The convicted nurse raised the somewhat laughable defence that she was merely providing personal care, as opposed to nursing care to the couple. The college of nurses however found that helping the couple with their daily bowel functions and dressings for wound care is indeed part of nursing care.

A caregiver can be loosely defined as anyone who cares for a person who cannot care for him or herself.

The caregiver typically assist the patient or dependent person with activities in daily life.

Every experienced estate litigation lawyer has come across situations of financial abuse undertaken by caregivers who invariably become personally involved, even romantically, with their much older and typically infirmed patients.

The elderly, infirmed and disabled members of our society make up the majority of those who need, use, and depend on caregiving services. They are vulnerable and typically frail and elderly, and the caregivers knowingly take advantage of their weakness and infiltrate their lives and seek and obtain financial gain.

The more informed and dependent the elderly patient is, the more likely the caregiver will have access to and utilize the elderly person’s financial information, records and accounts.

2 Types of financial abuse committed by caregivers:

1. Financial theft, forgery and embezzlement

These are probably the most common forms of caregiver financial abuse. The caregiver typically has access to and opportunity to review financial documents and records, and to undertake financial transactions, such as banking and the payment of bills.

The financial abuse may start by simply taking a few dollars in cash here and there and progress to forging signatures on cheques or manipulating the elderly person into signing cheques or agreements that benefit the fraudulent caregiver at the expense of the patient.

From a legal perspective, it would be very unwise to grant a caregiver a power of attorney or to allow them to control their financial investments- this should be left to a trusted family member or professional fiduciary.

All to often an unscrupulous caregiver preys upon the trusted nature of elders to gain access to financial information and then use fraud to commit financial abuse.


2. Property theft

It is not uncommon for family members to start noticing that certain personal effects go missing from the elderly person’s residence. This may start off with things such as coin collections and range up to the theft of valuable goods or even the misappropriation of real property.

Elders who live in relative isolation from close family members or loved ones are most vulnerable to such theft. The family member may notice for example that the car is still in the driveway, but not know that registration of the car has been transferred to the caregiver.

Fraudulent caregivers will work hard to create the illusion to the family and the patient of earned trust and competence.

I have come across more than one caregiver who has made a good living out of fleecing elderly and unsuspecting patients.


Caregiver financial fraud: 13 red flags to watch for

1. Any attempt to isolate or prevent the patient from speaking to family or third parties;

2. becoming too friendly and/or romantically involved with the elderly patient;

3. asking for legal authority such as banking privileges or a power of attorney;

4. accessing personal documents such as a will, financial accounts, investment accounts and the like;

5. withholding medical information from the family;

6. withholding financial information from the family;

7. overstepping normal expected boundaries of a caregiver;

8. suggesting opening new financial accounts or the transfer of existing ones

9. receiving “gifts” more than token value;

10. asking for donations to their favourite charity

11. participating in identity theft, such as obtaining social insurance numbers or credit card pin numbers;

12. asking to be joint holder on a bank account;

13. words or actions to the effect that the caregiver makes the older adult believe that he or she is special or lucky to be chosen by the caregiver to receive their care

BC Lawyer -Power of Attorney Abuse

Power of Attorney Abuse | Disinherited | Estate Litigation

Trevor Todd and Jackson Todd have practiced contested estate law for over sixty combined years, including financial abuse by a power of attorney.


Goyal v. Estate of Maisie Meng 2017 BCSC 2474 involved an abuse of a power of attorney who were sued by the estate representatives for breach of fiduciary duty.

Mr. Liem and Mr. Tuan acted as powers of attorney for Mr. and Mrs. Meng prior to their deaths.

In 2012 the Mengs entered into a listing agreement for the sale of their home. The wife signed the listing agreement, but the powers of attorney never communicated with the husband to determine his wishes.

The attorneys were also directly involved in signing the necessary documents to reduce the listing price without contacting either the husband or the wife to discuss their wishes.

Both attorneys, then committed the Mengs to selling their property for $1.4 million, which was below even the reduced listing price. They did so without consulting the wife, who disagreed with the sale price when she learned about it.

Mr. and Mrs. Meng revoked the powers of attorney and refused to complete the sale.

The prospective purchaser then sued the Mengs for specific performance and the Mengs defended on the basis that the powers of attorney were void and the contract of purchase and sale was void due to lack of capacity.

The court action was settled after the Mengs had both died, and the property was ultimately transferred to the purchaser for $1.65 million

The estate representative of the Mengs then sued the attorneys for breach of fiduciary duty, and the action was allowed.

The court held that an acting as he did in the sale of the property, the attorney Liem failed to act in their best interest, and breached the duty that he owed to them as their attorney.

As a result , the attorney breached his fiduciary duty, the husband and wife were sued ,and incurred legal expenses to defend themselves.

The court concluded that the Meng’s estates were entitled to be indemnified for the legal expenses and costs that were incurred.

The court followed the decision Egli v Egli 2004 BC SC 529, at paragraph 76 – 79.

The evidence established in respect of the powers of attorney, the three indicators of a fiduciary relationship or present, namely:

a) the fiduciary has scope for the exercise of some discretion or power;

b) the fiduciary can unilaterally exercise this discretion or power to affect the beneficiaries legal or personal interest; and

c) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary.

The court held that given the age and circumstances of Mengs they were particularly vulnerable to their attorneys.

The court ordered that the legal fees incurred by the legal counsel in relation to the action be submitted to the registrar for review, for an assessment of costs and review the bills incurred on behalf of counsel for the Mengs.

Removal of a Committee or Litigation Guardian

Removal of a Committee or Litigation Guardian

The applicable case law and test for the appointment and removal of committee or litigation guardian of a patient’s estate is the Supreme Court of Canada decision of Gronnerud v Gronnerud (2002) 2 SCR 417, which essentially was a useful statement of the parens patriae jurisdiction of the court in the best interests of the patient.

In that decision, the litigation guardians were removed on the basis that the guardians were in a conflict of interest towards the dependent adult. There was also an added element of acrimony or a high level of conflict between the guardians in the opposite parties in the litigation, which was found to amount to a conflict of interest.

In Gronnerud , the court stated evidence must demonstrate that the litigation Guardian is both qualified and prepared to act, and in addition is indifferent as to the outcome of the proceedings.

The third criterion, that of indifference to the result of the legal proceedings, essentially means that the litigation Guardian cannot possess a conflict of interest with respect to the interests of the disabled person.

Indifference by a litigation Guardian requires that the Guardian be capable of providing a neutral, unbiased assessment of the legal situation of the dependent adult and offering an unclouded opinion as to the appropriate course of action.

In essence the requirement of indifference on the part of a litigation Guardian is a prerequisite for ensuring the protection of the best interests of the dependent adult. A litigation Guardian who does not have a personal interest in the outcome of the litigation will be able to keep the best interests of the dependent adult front and center, while making decisions on his or her behalf. Given the primary of protecting the best interests of disabled persons, it is appropriate to require such disinterest on the part of a litigation Guardian.

It is acceptable in most cases, and perhaps desirable and some cases, to have a trusted family member or a person with close ties to the dependent adult act as litigation Guardian.

There are, however, exceptions, such as in the situation where there is a particularly acrimonious and long-standing dispute among the children concerning their dead parent’s estate. In such cases, the indifference required to be litigation Guardian is clearly absence.

Essentially the same criteria for the removal of a litigation Guardian is the same as in the case of removal of a committee. See Re Poon 2005 BCSC 254.

The requirement that the property Guardian not be in conflict of interest is a proxy for ensuring that the property Guardian protect the best interests of the dependent adult. Similar to the requirement the litigation Guardian be indifferent, at minimum, a property guardian must be able to handle the finances of the represented party in a disinterest, unbiased manner.

Although the statute is clear in stating that being a family member or potential beneficiary is insufficient by itself to prove a disqualifying conflict, in some cases, a family members or potential beneficiaries, there is evidence of other factors indicating a lack of objectivity. It is the unusual case where a family member or potential beneficiary in a troubled estate can demonstrate an absence of conflict and bus act as property Guardian.

What to Expect as an Executor of Estate in BC

What to Expect as an Executor of Estate in BC - Disinherited

Everything to Know About Being an Executor

It is perhaps trite to state that the role of the drafting notary or solicitor is simply not to fill in the blanks and record the testator’s instructions, including his or her choice of executor, but instead to actively advise and draw to the testator’s attention all of the considerations relevant to his or her decision. Frequently the amount of discussion pertaining to the choice of the executor or administrator, is simply a discussion as to “who do you want your executor to be”? Prudent practice would dictate that any discussions pertaining as to who the appropriate executor or administrator might be, should perhaps be left to the end of the consultation, so that the drafting solicitor or notary is aware of all of the necessary personal and financial information relating to the testator’s intentions, or alternatively, to the estate. There is a huge responsibility to be undertaken on the part of the personal representative. Where so far as possible, the potential complexity and responsibility of the executor or administrator’s role should be impressed upon all concerned.

1. In General – The Office of Executor/Administrator

An executor derives the title from the will of the deceased, and does not have to wait for a grant of probate from the court before acting on behalf of the estate. An administrator on the other hand, derives his or her power by appointment from the court. The administrator may be appointed in the situation where the deceased dies intestate (without a will) or alternatively, dies with a will but there is no living named executor. In such instance, it is incumbent on someone to come forth and apply to the court to be appointed administrator.

The executor/administrator is the legal representative of the deceased and is often referred to as the personal representative. The office of the personal representative continues for life, so that if after completing the administration with regard to the assets discovered on the death of the testator, other assets fall into the estate, then the personal representative must reopen the administration and proceed with the distribution of the new assets in accordance with the terms of the will or intestacy.

An executor may be appointed expressly in a will or by implication. Sometimes the deceased fails to expressly name an executor, and upon a reasonable construction of the will being conducted, the court may conclude that the deceased did in fact grant to a named person, the essential duties of an executor. In such a case that person is said to be appointed “according to the tenor of the will”.

2. Should the Executor Agree to Act?

No one can be forced to e an executor, and an executor always has the option of renouncing, but this must be done before the executor “inter-meddles with assets of the estate”. Any prospective personal representative should give serious consideration as to whether or not he or she  is  prepared to act as the personal representative. Under no circumstances should the prospective personal representative deal with the assets or otherwise intermeddle in the estate, until he or she has in fact decided to act as the personal representative.

Some of the preliminary considerations for the prospective personal representative to consider are:

(a) the potential for personal liability which may arise under many circumstances;

(b) the possibility for conflict of interest, such as where the executor is also a business partner of the deceased;

(c) the nature of the deceased’s assets, including the complexity of the estate;

(d) the personal relationship of the prospective personal representative with the beneficiaries or intestate successors;

(e) the time, stress and hassle of being an executor and dealing with lawyers, beneficiaries and the like;

(f) the time involved versus the potential remuneration available;

(g) the actual terms of the will and such factors as whether there will be ongoing lengthy trusts.

Once a personal representative accepts an appointment, he or she becomes a trustee for the estate, and he or she must exercise the powers bestowed upon the office, with diligence and care. A personal representative may become personally liable if their office is carried out in a negligent or improvident manner.

There is a technical difference between the personal representative and the trustee, and that is why in most wills, the personal representative is appointed as the executor and trustee. One important difference is that a trustee can appoint other trustees and can also retire from the trust. An executor however cannot appoint someone to act as co-executor, and nor can he or she retire from the office once the will has been proved.


3. Intermeddling

An executor may also be appointed other than by a will, where the executor intermeddles in the assets of the estate, to the extent that the intermeddling makes that person an executor de son tort. This arises where the intermeddler has assumed the authority and office of the personal representative, and has dealt with the assets of the estate. It has arisen in such instances where the executor de son tort has arranged the burial of the deceased, gathered in assets and paid the debts. Once an executor has in fact intermeddled, he or she loses the right to renounce executorship, and may incur personal liability for any loss or damage that has resulted from any improper administration of the estate. However slight acts of intermeddling are not enough to make a person an executor de son tort.


4. Who May be Appointed?

Almost anyone can act as an executor, and generally speaking a testator may appoint whoever he or she likes to be his or her executor. Generally speaking the courts are very hesitant to interfere with the appointment of the executor as chosen by the testator.
However, persons of unsound mind are incapable of acting as personal representatives, and when the personal representative is or becomes insane, the court will grant administration to someone else. An infant may be appointed to be a personal representative, but the infant cannot act as personal representative during his or her minority. Accordingly if an infant is named sole executor, administration is granted with the will annexed to the guardian of the infant or to such other person as the court shall think fit, until the infant attains the age of majority.

In many instances, the court will refuse a grant of probate and will pass over an executor, where the court considers it inappropriate that such an appointment be made. These situations are typically where the proposed personal representative has been convicted of a fraudulent offence or has become bankrupt after the date of the will, or in situations where it has been established that a marked hostility existed between the proposed personal representative and the sole beneficiary. However, as previously stated, the court will not likely interfere with the discretion exercised by a testator in naming his or her personal representative. Before any application can be made for the removal of an executor and the appointment of someone else as administrator, probate must first have been granted to the executor whose removal is sought.


5. Qualified Appointment

The appointment of a personal representative may be either absolute or qualified. Where the appointment is qualified, it may be either as to time, place or as to purpose or subject matter. When the personal representative is appointed for a fixed period or until a specified event occurs, the authority ceases automatically when the period expires or when the event takes place. When the appointment is subject to a condition precedent, then that condition must be performed and the court has no power to relieve against an inadvertent failure to comply with it. A will may for example appoint one person as the personal representative for certain purposes or property, and another personal representative for general purposes. In that situation, probate will be granted to each personal representative, but will distinguish between their powers.


6. Choosing the Executor

It is extremely important that the testator’s choice of his or her executor be given serious consideration. The attending notary or solicitor must remember that most clients have very little understanding as to the tasks and requirements that a personal representative must perform and the responsibilities that must be assumed. The appointment of the wrong person can be a costly and emotionally draining experience for all concerned. Accordingly it is important that the will’s draftsperson investigate the desired appointment and provide prudent legal advice as to who should be chosen to be the executor and trustee. Very often that choice cannot properly be made, until the attending notary or solicitor firstly enquires as to the nature of the assets, and the intentions to be carried out in the will.

There are many questions that the testator should consider prior to naming his or her executor, some of which are:

(i) will the executor be willing to act;

(ii) is the executor sufficiently sophisticated to carry out the job;

(iii) is the person trustworthy;

(iv) is the person young enough or healthy enough to carry out the job;

(v) will the executor be biased;

(vi) will the executor be able to work well with the beneficiaries;

(vii) does the executor have the time to do the job;

(viii) can the executor afford to do the job;

(ix) is there any conflict of interest or potential conflict of interest;

(x) should there be more than one executor;

(xi) the distance between where the testator and the executor reside.

The nature of the client’s affairs must be thoroughly examined to determine the like of active business interests, assets in foreign jurisdictions, loans or gifts to beneficiaries and the complexity of the various personal property and investments in the estate.

Generally speaking the choice for the testator usually comes down to choosing between:

(i) family members;

(ii) friends or acquaintances;

(iii) a corporate trustee.

Testators are often reluctant to talk frankly about the respective capabilities of their family members in choosing an executor. Often it is the notary or the solicitor’s job to tactfully ask the appropriate questions as to each of the respective family member’s strengths and weaknesses. It should be stressed that it should be the most appropriate person in terms of temperament, sophistication and personality that should be selected, rather than for example the oldest child. Certainly the testator should be prodded to speculate as to how the dynamics between his or her children will be after they are no longer alive.
Testators often wish to co-appoint one or more family members and I personally am of the view that this should be discouraged. If the client is adamant that there be a multiple number of family members as executors, then a majority rule clause should be inserted in the Will. If there is a handicapped child or children and discretionary trusts are being established, then careful consideration must be given as to who will be the executor and trustee, particularly as it relates to the possibility of a conflict of interest with respect to any residual funds after the death of the handicapped child.

If there are no appropriate family members, then consideration will then most likely turn to friends or acquaintances Friends or acquaintances are often of the same generation as the testator, and if so may be a bit too old.

The corporate trustee is certainly an appropriate alternative in many instances, particularly where there is a dysfunctional family and/or a complex estate with sizeable assets. The corporate fiduciary is impartial and will have the necessary sophistication and means to handle a sophisticated estate and/or difficult beneficiaries. The corporate trustee will also have a good understanding of the concept of even handedness and the potential for conflict of interest. Certainly the corporate trustee has a wealth of special knowledge and expertise, and this must be weighed against the negative considerations of choosing a corporate trustee, which are typically the expense, and its relative inflexibility and relative lack of personal touch.


7. Duties of an Executor

An executor has a duty to act solely and exclusively for the benefit of the beneficiaries. This duty is construed strictly, and forbids a personal representative from making a profit that is not authorized, or occupying a position where the personal representative’s self interests would conflict with the executor fiduciary duty to the beneficiaries. The Courts of Equity have required personal representatives to ensure that each beneficiary receives exactly what he or she is entitled to receive under the will or the estate. The personal representative must maintain an “even hand” when dealing with all beneficiaries the executor  has a duty in exercising all of his or her powers, whether discretionary or administrative, to maintain the standard of care of a reasonably prudent businessperson managing someone else’s property. Generally speaking, the personal representative cannot delegate his or her duties. The Courts in recent years however have permitted delegation of administrative duties that a reasonable and prudent businessperson would delegate in the management of his or her own business affairs. This would include the use of brokers, real estate agents, accountants, lawyers, appraisers and so forth.


Executor Duties Checklist:

1. To dispose of the deceased’s body.

It is the executor and not the testator’s spouse or family, who has the right to determine the place and manner of burial. The Cemetery and Funeral Services Act sets up a priority structure as to who has the right to control the disposition of human remains. First priority is given to the executor, then to the spouse, and then to various categories of relatives. If the person who has the right to control disposition is unavailable or unwilling, the right passes to the next person of the priority list. Proper funeral expenses incurred are payable out of the estate. Generally, the person who instructs the funeral director will be personally liable to pay all expenses incurred, but is entitled to indemnity as a first priority against the estate for the reasonable expenses of a suitable funeral. There are some cases where the executor has been denied reimbursement of the full funeral costs, where the costs have been found to be excessive under the circumstances.

2. Take possession or control of the deceased’s assets.

The personal representative must take steps to search for any cash, jewelry, valuables and the like, and arrange for their safekeeping. Any personal property must be locked up and properly insured. Other assets that may require insurance coverage must also be checked into. Financial institutions and government agencies must be notified of the death. Mail must be re-directed and the bills, including mortgages, must be paid. Rents must be either collected or paid and businesses must be managed for the interim until distribution of the estate or until the sale of the business. A personal representative must enquire as to whether they have sufficient legal authority to carry on the business, and must also be cognizant of the potential for personal liability for carrying on the business.

3. Complete a schedule of all of the deceased’s assets and ascertain their value.

After the executor has taken charge of the assets of the estate, and has made a full inventory of the assets and a valuation of same, the personal representative should then arrange to have an application made to the court for the issue of a grant of probate. In the case where the deceased dies intestate or without a named beneficiary, there is often a delay experienced in finding some appropriate person to step forward and apply for letters of administration. Rule 61(20) of the Rules of Court, seems to assume that in practice, in the absence of special circumstances, the court will usually give priority to appointing as administrator of the estate, the person or persons who have the greatest interest in the estate. In practice consents will be required from any person entitled to share in the estate who has a greater or equal right to apply. Thus, if two or more persons are equally entitled to apply, they must either apply jointly, consent to the appointment of one of them, or be served with notice under Rule 61(20). There is no limitation on the number of administrators who may be appointment.

4. Advertise for creditors.

Before any debts of the estate are paid, the executor or administrator should see to the publication of the proper advertisement for creditors, claims and other claims against the estate. From my experience, common sense should prevail in deciding whether or not to advertise for creditors, as the costs can be considerable. In the case of a little old lady with simple assets and a history of paying her bills on time, it may not be necessary to publish such an advertisement. However if the personal representative is to protect him or herself from liability, then serious consideration should be given to the placement of such an advertisement, as Provincial Legislation states that the personal representative shall not be personally liable to creditors, where notice has been properly given and the assets of the estate have already been distributed.

5. To notify beneficiaries, and persons who would take on an intestacy with respect to an application for probate or letters of administration;

6.  To act personally, although as aforesaid, delegation may be allowed in certain administrative circumstances;

7. To ensure that investments are authorized.

There is a duty to examine the assets and investments of the estate, and in general, to convert in a reasonable and timely manner, the assets that do not qualify as authorized investments for the estate. The executor must be concerned with assets that may waste (ie, an unheated greenhouse) or that are to speculative (penny stocks), or reversionary assets;

8. To complete and file income tax returns and where necessary obtain a Clearance Certificate from Revenue Canada;

9. To pay the debts, including funeral, legal, testamentary expenses, succession duties and probate fees;

10. To claim all debts due to the deceased and generally collect all of the assets;

11. To keep accounts:

The executor has a duty to be prepared to account to creditors and to persons who have a beneficial interest in the estate. The personal representative must give to anyone to whom he or she owes a duty such information as that person reasonably requires. The type and amount of information varies, but the duty to account is owed to beneficiaries, unpaid legatees, unpaid creditors, successors, trustees, others who may have an interest in the deceased’s assets, and others provided for by statutes such as the Public Guardian or Revenue Canada.

12. To continue or bring and maintain court actions on behalf of the estate:

Under Section 59 of the Estate Administration Act, a personal representative of a deceased claimant may continue or bring and maintain an action for a loss or damage to the person or property of the deceased in the same manner and with the same rights and remedies as the deceased, except for certain actions such liable and slander, pain and suffering, and loss of expectancy of earnings. A personal representative may continue or bring and maintain an action under the Wills Variation Act, or an action for constructing or resulting trust on behalf of the deceased.

13. To distribute the assets in accordance with the will or the laws of intestacy.

8. The Executor’s Year

Generally speaking the personal representative must not unreasonably delay in calling in the assets and settling the affairs of the estate, and distributing the assets in accordance with the will or the rules of Intestate Succession. There is no hard and fast rule as to what constitutes undue or unreasonable delay, but as a general rule of thumb, there is an executor’s or administrator’s one year to do so. The general rule is that the executor has one year from the testator’s date of death, and in the case of an administration, the administrator has one year from the date of the grant, to settle the affairs of the estate.

There is case law to the effect that in the case of a legacy, the executor is entitled to withhold payment during the one year, even though the will indicates that the testator wishes payment to be made as soon as possible.

I will not deal with the topic of removal of an executor in the paper, but will do so at a later date.


9. Renunciation

Where the proposed personal representative has not intermeddled in a substantial way, then he or she can renounce the appointment as executor. Any renunciation must be unconditional and be in writing and properly witnessed. The renunciation takes effect as of the date of execution, but it may be withdrawn prior to filing it with the court. The renunciation is usually filed at the same time that the application for the grant of probate is made.

There are many reasons why an executor may wish to renounce, and this should be canvassed with the proposed personal representative at the initial meeting, and as soon as possible after the death of the deceased. For example I recently had a Provincial Court Judge renounce as executor, when it was likely that he would be named as a defendant as personal representative, in an action brought for an alleged sexual assault. This would be embarrassing to the executor given his job as a Judge.

If the proposed personal representative is one of two or more executors appointed under a will, then he or she may choose not to participate in the administration of the estate initially, and leave it up to the remaining executors to do so. In these circumstances, the remaining executors would apply for probate, and would reserve the right of the prospective personal representative to apply at a later date if he or she should choose to do so. Reserving the right to apply for probate may be appropriate where the prospective personal representative prefers not to act for reasons such as distance, lack of time, age, illness, or other such reasons.

The fact that an executor has not obtained a grant of probate does not mean that person is no longer an executor. Renunciation is generally preferable to a reservation of the right to apply for probate, unless the non-proving executor seriously wishes to reserve the right to apply for probate in the future.


10. The Chain Executorship

If two or more executors have proved a will, and one of them dies after the grant, and no alternative executor has been named, then the surviving executor will continue, unless the will requires a minimum number of executors greater than the number of surviving executors.

However if a grant has issued and the sole executor or the survivor of several executors have proved the will, but dies before completing the administration of the estate, and no alternate was named in the will, then the executor of the deceased’s executor will become the executor of the original testator once he or she obtains probate of the deceased executor’s will. The replacement executor will stand in the shoes of the original executor in all respects.

This rule is referred to as the chain of executorship and it applies only in the circumstances where the executor named in the will has taken probate of the will before death, and each will in the chain must have been proved or probated.


11. Estate Executor Fees

Unless the will provides otherwise, all executors whether lay or professional, whether experienced or not, are entitled to be paid remuneration in accordance with the provisions of Section 88 of the Trustee Act, R.S.B.C. This section allows the executor to be paid, in the discretion of the court, up to a maximum of 5% of the gross aggregate value of the estate, including capital and income, together with an annual care and management fee of up to .4% of the average market value of the estate.

In most circumstances, the beneficiaries may well approve a 5% fee to the executor. In many instances however the courts will not allow the executor be paid the maximum 5% of the gross aggregate value of the estate. The courts will enquire into a number of factors, including the complexity of the estate, the experience of the executor, the time spent by the executor, the value of the estate, the amount of time spent administering the estate, and the like. However from a perusal of the somewhat limited number of cases on point, and the growing gross amount of estates largely due to inflated real estate, it would appear that the court very often will award fees more in the range of 2 to 3 rather than the maximum.


It is very important that the testator’s choice of an executor or executors be given sufficient scrutiny and discussion. As previously stated, most clients have little or no understanding of the onerous responsibility that an executor or alternatively an administrator, must perform. An inappropriate or improvident appointment can often complicate the administration of the estate unduly, and in certain cases, unnecessarily result in litigation. Accordingly, it is incumbent upon the drafting notary or solicitor to thoroughly investigate the desired appointment and to provide suitable legal advice.

Power of Attorney Creates a Fiduciary

Power of Attorney Creates a Fiduciary

Attorney Using a Power of Attorney is a Fiduciary

As a fiduciary, an attorney for property is “ obliged to act only for the benefit of the donor,  putting his/her own interests aside”. An attorney is prohibited from using the power of their own benefit, unless “ it is done with the full knowledge and consent of the donor” Richardson Estate v. Mew 2009 ONCA paragraphs 49 – 50.

Duties of an Attorney as a Fiduciary

In Zimmerman V. McMichael estate 2010 Onsc 2947 the various duties of an attorney as fiduciary are discussed, and include:

  • A fiduciary is under a duty to account,
  • A fiduciary has a duty not to co-mingle trust funds with the attorneys property, and to provide an accounting if they are co-mingled
  • A fiduciary must not make a profit or to put him/ herself in a position where his/her interests and his/her duty conflict unless the trust instrument expressly so provides;
  • As a fiduciary, an attorney for property is not entitled to exercise that power for his or her own benefit unless expressly authorized to do so, and;
  • The fiduciary bears the onus of establishing that the management and disbursement of funds is consistent with the terms of the power of attorney

6 Factors of a Fiduciary Relationship

6 Factors of a Fiduciary Relationship

Six factors must exist to create an ad hoc fiduciary duty as per the Supreme Court of Canada in Elder Advocates of Alberta Society v. Alberta, [2011] 2 S.C.R. 261, at paras. 27 and 36.

6 Factors for Fiduciary Relationships:

(1) the fiduciary has scope for the exercise of some discretion or power;
(2) the fiduciary can unilaterally exercise that power or discretion so as to affect the beneficiary’s legal or substantial practical interests;
(3) the beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power;
(4) an undertaking by the alleged fiduciary to act in the best interests of the alleged beneficiary or beneficiaries;
(5) a defined person or class of persons vulnerable to a fiduciary’s control (the beneficiary or beneficiaries); and
(6) a legal or substantial practical interest of the beneficiary or beneficiaries that stands to be adversely affected by the alleged fiduciary’s exercise of discretion or control.

Executor Must Treat All Beneficiaries In Good Faith

Executor Must Treat All Beneficiaries In Good Faith

An executor is in a fiduciary relationship and must treat all beneficiaries fairly and in good faith.

Brighter v. Brighter Estate (1998), 1998 CarswellOnt 3113 (Ont. Gen.Div.):

The executor has no right to hold any portion of the distributable assets hostage in order to extort from a beneficiary an approval or release of the executor’s performance of duties as trustee, or the executor’s compensation or fee. It is quite proper for an executor (or trustee, to use the current expression) to accompany payment with a release which the beneficiary is requested to execute. But it is quite another matter for the trustee to require execution of the release before making payment; that is manifestly improper.

The estate trustees refused to make a further interim distribution until the accounts were passed. One of the beneficiaries was alleging negligence against the estate trustees. The court determined that:

An Estate Trustee is in a fiduciary position and must act in good faith and fairly to all beneficiaries. An Estate Trustee’s request for a release and a waiver of passing of accounts from all beneficiaries before making a final distribution of an estate is a reasonable step, provided the beneficiaries are advised that, if any beneficiary does not agree, the Estate Trustees will ask a court to review and approve their accounts and that the beneficiaries will have an opportunity to have their objections decided by a judge. This step may incur additional costs to the Estate and to the individuals involved but I find this is a reasonable course of action for the Trustees to follow when there is any objection by a beneficiary or a threatened legal action for negligence. The Rules of Practice permit either an executor or a beneficiary to have the Trustees proceed with a passing of accounts where the Trustees actions and claim for compensation will be reviewed by a judge. A passing of accounts is generally a summary proceeding which does not unreasonably delay the administration of the Estate, and allows for any objections to be considered and decided by the Court. I find that the Estate Trustees should not be prejudiced by proceeding to pass their accounts, as provided in the Rules, when there is an objection by a beneficiary and allegations of negligence.

The court dismissed the beneficiary’s motion for an interim distribution. There was no evidence of prejudice to the beneficiary and no evidence that he was experiencing financial hardship. There would only be a short delay before the accounts could be passed and the prejudice to the beneficiary was minimal: McGovern Estate v. McGovern, 2014 CarswellOnt 4878 (Ont. S.C.J.).