Canadian court agrees to “pass over” estate trustee

Tuesday, 23 April 2024
The Superior Court of Justice of Ontario has agreed that the trustee of an estate should be “passed over” because she “abdicated any duty as an estate trustee.”
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Concetta Norina Sassano (the deceased) had nominated her daughters Carmelina Sassano (the applicant) and Giuseppina Iozzo (the respondent) as the executors and trustees of her estate. The principal asset of the estate was a property that the applicant had resided in with the deceased until her death. The estate’s only further asset was a bank account held jointly between the deceased and the respondent.

The deceased’s will provided that the applicant could remain in her property until she died, remarried, entered a cohabitation arrangement or voluntarily left the home to take up residence elsewhere. If any of those circumstances arose, the property would be sold and divided equally between the applicant and respondent. Until that point, the will specified that the estate would cover the costs of maintenance of the property.

In 2023, the applicant informed the respondent that she intended to vacate the property and reside permanently elsewhere, thereby invoking the sale of the property under the will. She told the court that she received no response to this.

The applicant therefore sought , under the Rules of Civil Procedure 1990, an order to remove the respondent as executor and trustee and leave to the applicant to apply for a certificate of   appointment of estate trustee with a will in the estate. She also sought payment of legal costs out of the respondent’s share of the estate.

The court noted the legal principle that “the court should not lightly interfere with a testator’s choice of the person to act as his or her estate trustee…Just as a court should remove an estate trustee only on the ‘clearest of evidence’, so too they should be reluctant to pass over a named executor unless ‘there is no other course to follow’.” Further, in passing over an executor, the court said it should be principally guided by the welfare of the beneficiaries.

The applicant argued that she was presenting a proper case for removal of the respondent as executor or, alternatively, she should be passed over. The court declined to remove the respondent as the executor as it did not consider her lack of correspondence to be “intermeddling in the administration of the estate.”

However, it found that the respondent had abdicated her duties as estate trustee. “The deceased’s wish to have both her daughters as estate trustees should not be lightly interfered with,” the court said. “However, [the applicant] has brought the clearest of evidence that [the respondent] is unwilling to take any step as estate trustee, notwithstanding numerous efforts by several people to illicit her involvement. Further, the welfare of [the applicant] as a beneficiary of the estate requires that [the respondent] be passed over as estate trustee…[the respondent’s] inactivity is thereby impeding the proper administration of this Estate and the welfare of one of its beneficiaries.

“The passing over of [the respondent] is necessary, as a remedy of last resort, for the Estate to be administered,” the court concluded. The applicant was therefore constituted the sole executor and trustee of the estate and was granted costs (Sassano v Iozzo, 2024 ONSC 1517).

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