Canadian Lawyer

LEGAL REPORT/Wills & Estates The executor's challenge Disgruntled beneficiaries are increasingly prepared to contest wills, often leaving executors struggling to carry out the deceased's instructions. I nstructions from beyond the grave can be a difficult thing. As with most things, wills too have limitations. Disgruntled beneficiaries are increasingly prepared to contest wills; sometimes litigation is anticipated by the testator. Often at the centre of it all is the executor, struggling to carry out the desire of the deceased. But how far should he or she go in fulfilling the will? "The executor is definitely supposed to be neutral between the beneficiaries because the executor is responsible to the estate as a whole," says Lynne Butler, a senior will and estate planner with Scotia Private Client Group in St. John's, N.L. So even if a beneficiary desires a property within the estate, the executor may decide putting it on the market would be in the best interest of all beneficiaries. In the event of litigation, the executor's role is to present the will and ask the court for instructions. The challenge is when the executor is also a beneficiary. A pet peeve for Butler is the lack of consideration given beforehand to the appointment of executors to avoid potential conflicts when executing the will. Although the courts can remove an executor who is not being impartial and appoint a public trustee or a trust company, conflicts can often be avoided. Caution is necessary for any lawyer instructed to draft a will, says Benjamin Arkin, a litigator with Toronto's Whaley Estate Litigation. Even when the will gives the executor instructions to wage war along with the funds to do it, Arkin says caution is warranted. "What often springs to mind when we think about executor neutrality is the obligation to maintain an even hand in deciding how to balance the interests of different classes of beneficiaries. However, neutrality also means that an executor may not necessarily be allowed to take sides in a dispute between beneficiaries over the interpretation of a will," he says. But the even-hand rule can be displaced by the terms of a will. In Canada Trust Co. v. Browne, the Ontario Court of Appeal found the trust instrument explicitly ousted the even-hand rule. But there are limits to an executor's right to jump into the fray with the beneficiaries when the meaning or application of the will is in dispute, despite the instructions contained in the will. In Ketcham v. Walton, the testator Eric Worthy Clay essentially established a war chest to fund a battle he knew was coming after he disinherited his children and left his estate to friends and charities. The will left the executor in the position of general in maintaining a defence against the children with instructions to deplete the estate, if necessary, to fund the battle. As executor, Frederick Walton sought advice from the court. "Should the executor take an active role in defending the will?" wrote Justice Randall Wong. "The answer is no; but if there is no party ultimately to represent the testator's position, the executor perhaps should act in a nonadversarial role as an amicus to assist the court in determining the merits of [British Columbia's Wills Variation Act] claim." However, Arkin says: "In this case we have a curious problem because the law, which requires the executor to be neutral, is at odds with the instrument itself. So the executor, quite sensibly, turned to the courts for direction." The B.C. Supreme Court had to consider whether the terms of the will were valid. Wong decided the will was in terrorem and contrary to public policy, saying the executor can't choose sides, no matter the instructions in the will. Arkin says it's an interesting question as to whether the executor here could have decided on his own, without asking the court for advice and directions, not to follow the will's directions. This could leave the executor open to criticism by the beneficiaries. That the executor turned to the courts for direction in Ketcham was a wise move because the will was in conflict with the legislation, observes Amy Mortimore of Clark Wilson LLP. The root of the Wills Variation Act was to allow the spouse and family protection, leaving the executor with the simple role of presenting the will. "The executor has the duty to deal with the assets and the estate and have complete control to act in the best interest of the beneficiaries," said Mortimore, "because there is an opportunity to wrongly take advantage of it." In Ketcham, "the court found the testator's direction to the executor to actively defend a WVA claim by the children, combined with the authority to deplete the entire estate in such defence, was 'void as contrary to public policy.' The court held that if the testator's wishes were fully www.CANADIAN L a w ye r m a g . c o m October 2013 47 MatT Daley By Marg. Bruineman

• Cover