Having a properly drafted will is one of the most important first steps involved in creating an estate plan. In an ideal world, a will would leave the estate free of litigation. However, as we’ve seen from time to time in our blog, sometimes having a will does not mean a future free of litigation. In a recent decision from the Ontario Superior Court of Justice, the court was faced with two groups of parties with different wishes on how an estate would be distributed. The problem was that the will was silent on this matter.

A will with some loose ends

The deceased died on March 10, 2016. While she had some specific bequests for charitable organizations in her will (the “Charitable Beneficiaries”), the rest of the estate, valued at just over $600,000, was to be distributed equally amongst eight surviving family members (the “Individual Beneficiaries”).

The parties appeared before the court in 2017 when the Trustee brought an application for directions. The court stated that the Charitable Beneficiaries were to execute a release in a form to be drafted by their lawyer and approved by the lawyer for the Trustee. However, in the three years since then the Charitable Beneficiaries and the Trustee have failed to agree on the wording of the release, and as a result, no interim distribution has been made.

The Trustee applied to the court for a passing of accounts again on July 19, 2019. The Charitable Beneficiaries submitted a notice of objection a couple of months later. They stated in their notice that the accounts presented did not conform to the required standards or provide sufficient information. They also objected to the compensation that was to go to the Trustee.

Beneficiaries with competing interests

The Trustee took the position that the Charitable Beneficiaries unreasonably refused to accept a release in a form that was acceptable to the Trustee. He was seeking an order from the court to set the terms for a release so he could continue with an interim distribution.

As we mentioned earlier, the Charitable Beneficiaries argued the Trustee could not make an interim distribution until all of the objections raised had been adjudicated or settled. On the other hand, the Individual Beneficiaries were upset that four years had passed and no distribution of the estate had been made to them.

Determining the distribution of the estate

The court noted that the proposed interim distribution of the estate would leave sufficient funds to cover its existing and potential liabilities, even including the Trustee’s proposed compensation. As a result, the court found no principled basis on which the Charitable Beneficiaries could object to the interim distribution while waiting to resolve other issues. The court also provided the parties with a timeline for the working out of other issues, including the forms, giving the parties deadlines to comply with.

Contact NULaw in Toronto to obtain effective legal guidance with all of your estate planning needs, including wills and powers of attorney. An experienced estate lawyer can help you achieve your long-term goals and objectives, and plan ahead to protect yourself and your loved ones. Contact us online or at 416-481-5604 to book a consultation today.

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