An estate trustee- also referred to as an executor or estate administrator- is responsible for administering the estate of a deceased person according to their will or, if there is no will, according to provincial laws.
The key responsibilities of an estate trustee include:
- Locating the will and apply for probate (if necessary)
- Identifying and securing estate assets
- Notifying beneficiaries and interested parties
- Paying outstanding debts, taxes and expenses
- Filing final tax returns
- Distributing assets according to the will or legal requirements
- Keeping accurate records and reporting to beneficiaries
An estate trustee has fiduciary duty to act in the best interests of the estate and its beneficiaries. They must treat all beneficiaries fairly and without bias. It is a responsibility that requires careful attention, and failure to perform these duties properly can lead to legal consequences, as seen in the case of Hockney v. Kneeland.
In this case, Mary Jane Hockney passed away on December 23, 2014. In her will, she appointed Mary Kneeland, her lawyer, as the sole estate trustee. Her estate had assets of about$255,000.00 which were to be divided equally among her seven grandchildren, many of whom were minors at the time of Mary Jane’s passing.
Ms. Kneeland faced significant delays in administering the estate. Despite promising updates and assurances, she failed to distribute the estate or provide proper accounting over the years. In May 2017, Ms. Kneeland distributed a total of $105,000.00 (i.e., $15,000 per beneficiary) but failed to fully account for the remaining estate assets. This led to Emma Hockney, one of the beneficiaries, filing a complaint with the Law Society of Ontario in 2018 over the delay. The Law Society cautioned Ms. Kneeland, but no further action was taken.
In 2022, another complaint was filed, resulting in Ms. Kneeland providing an undertaking to complete the estate administration by December 31, 2022, or at the latest, June 30, 2023. Despite her undertaking, Ms. Kneeland failed to provide any further updates until after October 2022. By 2024, the beneficiaries filed an application in Court to compel Ms. Kneeland to account for the estate and complete its administration. Despite several attempts, service of the application was evaded by Ms. Kneeland.
The consequences of Ms. Kneeland’s failure to fulfill her estate trustee duties include:
1. Court-Ordered Obligation to Pass Her Accounts:
The court ordered Ms. Kneeland to pass her accounts as the estate trustee by April 30, 2025. This means that she is now legally required to provide a detailed accounting of how the estate has been managed, including the assets, debts, and distributions, and explain why there were delays in administering the estate.
2. Failure to Appear or Respond:
Ms. Kneeland’s continued failure to appear in court, to properly communicate with the beneficiaries, or respond to the application led the judge to impose additional conditions. If she does not deliver a Notice of Appearance by March 7, 2025, the court would allow the beneficiaries to proceed without her participation, possibly leading to a final judgment in their favor on a default basis.
3. Potential for Default Judgment:
If Ms. Kneeland does not comply with the court order to deliver a Notice of Appearance, the applicants (the beneficiaries) can move forward with their case for final judgment without needing to provide further notice to her. This could result in a default ruling against her, where the court might rule in favor of the beneficiaries, and they could receive the distributions from the estate without further delays.
4. Legal and Professional Consequences:
While the Law Society of Ontario had already cautioned Ms. Kneeland in 2018, the ongoing issues raised questions about whether she would face additional professional discipline or sanctions. However, as the Law Society was not a party in this case, the Honorable Justice Myers did not draw conclusions about further action by the Law Society, though the conduct highlighted in the case suggests that her conduct could give rise to professional consequences.
5. Costs
The scale and quantum of the beneficiaries’ attendance before the Honorable Justice Myers was reserved for the Judge who decides the final resolution of the application.
Conclusion
The case highlights a significant failure in estate administration, where a lawyer trustee not only delayed the distribution of an estate for over a decade but also evaded accountability. Despite the Law Society of Ontario’s caution, no meaningful disciplinary action was taken, leaving the beneficiaries to seek court intervention to resolve the issue. The Court has now set clear deadlines for Ms. Kneeland to fulfill her obligations as trustee and warned her of the consequences if she fails to comply.
These consequences reflect the Court’s commitment to ensuring that the estate is properly administered and the beneficiaries receive what they are entitled to, when the estate trustee has failed to fulfil their duties in a timely manner.
Mills & Mills LLP regularly represents both estate trustees and beneficiaries in matters involving estate administration. If you have concerns regarding the administration of an estate, we encourage you to contact one of our experienced estate lawyers for guidance and assistance.
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