If someone with a financial interest in an estate (such as a beneficiary) suspects that the estate trustee is misappropriating estate funds, they have the right to take legal action. This may include seeking the removal of the trustee through the courts, and in serious cases, notifying the police if theft or fraud is suspected.

Removing an Estate Trustee

Under section 37 of the Trustee Act, any individual with a financial stake in an estate may apply to the Superior Court of Justice to have an estate trustee removed.

Courts are reluctant to interfere with the testator’s choice of trustee. Therefore, in considering such an application, the court applies several key principles:

• There must be clear and compelling evidence that removal is necessary
• The court’s priority is the welfare of the beneficiaries
• The trustee’s conduct must seriously threaten the proper administration of the estate

If a trustee is removed, they must produce a full accounting of their actions, and the court will appoint a replacement trustee.

If theft is suspected

If there is reason to believe the trustee is stealing from the estate, the concerned party should consider contacting the police. Trustees can face criminal charges such as theft, fraud, or breach of trust for misappropriating estate assets.

If the conduct is mismanagement but not criminal

If the trustee is engaging in mismanagement, then a court application can be made to have the trustee removed. Mismanagement includes such things as:

• Pre-taking compensation
• Failing to provide an accounting
• Mishandling estate assets

Gathering evidence

Before initiating a court proceeding to remove the trustee, the concerned party should request an accounting of the estate. This is a right held by all beneficiaries. If the trustee fails to provide an accounting, the concerned party can then apply to the court to compel the accounting.

Bringing the application

Once there is supporting evidence of the mishandling of the estate, the next step is to bring an application in court under:

• Rules of Civil Procedure:
  • Rule 75.04
  • Subrules 14.05(3)(a) and (c)
• Trustee Act:
  • Sections 5 and 37

All beneficiaries must be named as parties to the application, and the application must include:

• A Notice of Application
• Supporting affidavit evidence

Getting the legal help you need

Wills are extremely important documents and relatively inexpensive to have prepared professionally. If you want to make sure your Will is legal and clearly expresses your wishes, you should consult a lawyer. A lawyer can also provide advice and assistance settling an estate.

								
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