Want to remove an executor? The bar is high

There are many reasons that a beneficiary, co-executor or other interested party might want to remove an executor, including hostile relations, failure to act or possible misconduct. However, courts have generally been reluctant to do so, preferring not to interfere with the deceased’s choice of who should administer the estate.

“The threshold for evidence to be submitted in these kinds of cases is very high,” said Shruthi Raman, an estate and trust lawyer with Synergys Law LLP in Toronto. “The conduct has to be so egregious and so harmful to the administration of the estate or to the interests of the beneficiaries that the court must seriously consider removal.”

The court will prioritize the welfare of the beneficiaries, said Matthew Urback, partner with Shibley Righton LLP in Toronto: “If there’s any risk to [estate] funds — risk of loss, risk to the trust, a risk that there could be further impropriety — that’s when this turns into something a little bit more contentious, and an executor may be removed.”

An individual named as an executor in a will does not have to accept the role. However, once they begin administering an estate, they must continue to do so unless they are removed by the court, either after  applying to step down or after someone else has applied to remove them.

Anyone with an interest in an estate can apply to court to have an executor removed if they think the executor is not fulfilling their fiduciary duties to the beneficiaries or not acting in the best interests of the estate.

The most common reason is breach of fiduciary duty, Raman said: “They could have come across information or [identified] assets that they have failed to disclose to the beneficiaries, or they are refusing or failing to provide an accounting for work to date, or they just simply failed to keep a balanced and even hand between the beneficiaries.”  

Urback said misconduct, acting in bad faith, personally benefiting from the estate, acting to the detriment of the beneficiaries, and an inability or an unwillingness to do their job are all relevant considerations for the court.

Where multiple executors are administering an estate, friction between executors can jeopardize the timely administration of an estate and lead to executors asking the court to remove another executor, Raman said.

Someone might also look to remove an executor who has become incapable due to illness, has declared personal bankruptcy, or is facing a criminal conviction, Raman said: “Anything that would affect the trustworthiness, or the creditworthiness, of the executor could create grounds for proceeding with an application to have them removed.”

Courts will look for evidence that the executor’s continued administration presents a risk, Urback said.  “If, say, there was a single incident that the beneficiary may not have agreed with, that may not necessarily establish that there is an ongoing risk to the administration of the estate.”

Where interested parties are seeking to remove a sole executor, the court will look to see whether another person is willing to step in as a replacement with the beneficiaries’ support.

“When a beneficiary tries to remove an executor, or even an executor wants [to step down], they are best served by proposing a replacement who has already agreed to take on the role,” Urback said.

Where an estate is being administered by more than one executor, the court generally doesn’t need to name a replacement when ordering an executor’s removal.

An executor who has been removed by court order may seek and be entitled to partial compensation in certain circumstances: “It would be highly dependent on the reason for their removal and the work done to that point,” Urback said.

With small estates, beneficiaries and other interested parties may decide the cost of litigation isn’t worth the trouble of trying to remove an executor they don’t like, he said.

Both Urback and Raman said that an executor’s best strategy to prevent a contentious administration, or the most effective defense against attempts to remove them, is to keep good records and to regularly communicate with beneficiaries.

“If they have gotten advice from a professional — say, an accountant, or another lawyer — [it is] important to keep documentation about that. It’s important to set out who they’ve been relying on in some of their decision making, and why,” Urback said.

Executors should set out what they’ve done, as well as the reasons, so they have a paper record if their actions are challenged, he added.

Said Raman: “I always advise [executor] clients: keep your lines of communication open. That is the keystone of any relationship that hinges on trust — transparency and clarity.”