A Court may appoint an individual as the administrator of the estate when there is pending legal proceedings
There are various sections within WESA that give a Court power to determine who can control an estate when there are legal proceedings involved. The purpose of such sections is to ensure that the estate assets are being safeguarded during the time leading up to final distribution to the beneficiaries.
Section 103 – Appointments
With Section 103 of WESA, a Court may appoint an individual as the administrator of the estate when there is pending legal proceedings. This is to guard against estate funds being used by the defendants in defending legal actions brought against the estate.
The difference from the older legislation is that the wording of the section is interpreted more broadly and can relate to an action, suit, cause, matter, preliminary motion, petition, proceeding, or requisition. A simple application for an estate grant may now also be included under this definition.
Section 103 of the WESA provides:
(1) The court may appoint a person as the administrator of the estate of a deceased person pending a proceeding
(a) in which the validity of the will of the deceased person is in issue, or
(b) to obtain or revoke a representation grant.
(2) The administrator of an estate
(a) has all the rights, powers and duties of a personal representative, other than the right to distribute the estate,
(b) is subject to the control of the court and must act under its direction, and
(c) is entitled to reasonable compensation under the Trustee Act or as otherwise determined by the court.
There is always a focus on trying to appoint a neutral third party, such as a trust company or lawyer/notary, to step in to administer an estate but in smaller estates, retaining a neutral third party is more difficult due to the lack of funds to pay for the services. In these smaller claims, where retaining a neutral third party is not possible, often there is an agreement made to allow the opposing parties to co-administer the estate with no funds being used except to pay debts of the estate.
Section 132 – Special Circumstances
The WESA also includes Section 132 relating to special circumstances in which the Court can make an appointment of an administrator of an estate:
(1) Despite Sections 130 and 131, the court may appoint as administrator of an estate any person the court considers appropriate if, because of special circumstances, the court considers it appropriate to do so.
(2) The appointment of an administrator under subsection (1) may be
(a) conditional or unconditional, and
(b) made for general, special or limited purposes.
The less favorable aspect of this section, as opposed to Section 103, is that the Court does not have the power to determine the administrator’s remuneration and there is no enabling provision to force compliance with the Trustee Act.
Section 151 – Derivative Lawsuits for the Estate
Another section in WESA that allows a person, other than the executor, to have some control over the estate is Section 151. This allows a beneficiary to ask for permission from the Court to take over part of the estate relating to collections on behalf of the estate. This scenario usually arises where the executor declines to pursue or defend a legal claim for the estate. If the Court grants this Order, the beneficiary has the power to litigate on behalf of the estate. The scenarios where the Court can grant permission related to pursing a legal action pertains to:
- Recovery of property or enforcement of a right, duty or obligation owed to the testator that could be recovered or enforced by the personal representative; or
- Obtaining compensation for breach of a right, duty or obligation owed to the testator.
Cases where this remedial section is more likely to be utilized are situations where the executor refuses to pursue possible assets of the estate. For example, if the executor was also the power of attorney for the testator before death, the executor probably does not want to pursue an accounting of the estate for the time prior to the death, as to do so would be to audit oneself. Further, the executor might not want to pursue a claim of a resulting trust where the executor and testator were joint tenants in a real estate property with the right of survivorship or where the executor and testator were joint holders of a bank account. The reason being, if a presumption of resulting trust is found in favor of the estate, the property would make up part of the estate’s assets for distribution and would not pass to the executor personally outside the Will upon death.
What Assets of The Deceased Are Subject to A Wills Variation Claim
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