A recent court decision is a reminder that clients should choose an executor carefully rather than appoint a child by default.Sviatlana Zyhmantovich/iStockPhoto / Getty Images
A court has ruled that an executor is liable for damages and not entitled to receive compensation for mismanaging her mother’s estate, which was still incomplete 19 years after the executor’s appointment.
In the decision, the Ontario Superior Court of Justice found the executor failed to keep good records, commingled her funds with those of the estate and couldn’t or wouldn’t provide the court with information about estate assets or transactions, making proper accounting of estate administration impossible.
Executors – known as estate trustees in Ontario – don’t always appreciate their fiduciary obligation to act in the best interests of the beneficiaries, says Demetre Vasilounis, an estate lawyer and senior manager, high-net-worth planning services at RBC Wealth Management.
“Being a trustee of a trust does not give you a licence to do whatever you want,” he says.
Flowers v Flowers, the decision released in June, involves the estate of a widow who died in May, 2007, leaving four children.
In her will, she named her daughter sole executor of the estate and her four children as equal beneficiaries.
When the daughter applied for probate in 2007, she indicated her mother’s estate consisted of $300,000 in real estate and $113,000 in personal property. The executor’s siblings did not object to the application.
In 2023, one of the executor’s brothers applied to court to compel his sister to present her financial records related to the estate administration in court for review and approval, known as a “passing of accounts.”
The following year, she applied to court to pass her accounts but didn’t provide an affidavit to verify them because she couldn’t say they were complete. Instead, she provided a description of her administration of the estate.
In 2025, in response to a motion brought by the executor’s brother, a judge at the Ontario Superior Court ordered the executor’s lawyers to transfer $272,500 of estate funds in trust to a court-appointed trustee while the estate was under litigation.
The application to pass the accounts came before another Superior Court judge this past May.
The executor’s brother argued in his testimony that the estate had been larger than the executor suggested, that the executor should pay damages for funds she couldn’t account for and that she should provide an indemnity against any unpaid taxes once the estate’s tax liabilities were known.
The judge hearing the application found the executor’s estimates of the estate’s value at the time her mother died to be unreliable, as there was no supporting evidence. The executor also hadn’t kept records of estate funds received or disbursed.
For example, the executor sold a parcel of land owned by the estate for $75,000 in a private sale funded largely by vendor-take-back mortgages. However, she couldn’t provide proof of the estate receiving mortgage payments.
The executor also admitted to borrowing $185,000 from the estate to pay her legal fees in a separate family law matter. She told the court she had repaid the loan but provided little supporting documentation.
Although some property had been distributed, the estate continued to hold a parcel of land overseas and the shares of four corporations, one of which was Nortel Networks Corp., which went bankrupt in 2009. The executor said the value of the land and the shares were negligible.
The judge declined to pass the accounts.
In determining damages, the judge relied on whatever records or evidence did exist to estimate that the value of liquid assets in the estate ought to have been $279,300.
Because of the executor’s admitted “self-dealing,” such as the borrowing of estate funds, the judge found the executor owed the estate $6,800 in damages.
The fact that the amount of damages was modest was “in no way a vindication of [the executor’s] behaviour or conduct,” the judge said. “It’s a reflection of the lack of proof of a claim that is before me, which flows to some extent from [the executor’s] own disclosure failings.”
The judge declined, however, to make the executor pay an indemnity for any unpaid tax associated with the estate, citing a lack of legal authority to do so.
Finally, the judge found the executor wasn’t entitled to compensation, although she took some steps to administer the estate, in part because of her unwillingness or inability to disclose information about estate assets or transactions.
“It is [the executor’s] poor record keeping and lack of co-operation that led to the necessity of this application,” the judge said.
Choosing an executor wisely
The court’s decision is a reminder that clients should choose an executor carefully rather than appoint a child by default, estate advisors say.
Depending on the size and complexity of an estate, a client might consider naming a corporate trustee, a professional advisor or even a trusted friend as executor, says Mohena Singh, an estate lawyer with Fasken Martineau DuMoulin LLP.
“It could just be someone who’s pragmatic, who can understand how to manage different assets and communicate with different people, whether that’s advisors or beneficiaries,” she says.
Mr. Vasilounis says he’s seen a trend of clients appointing a professional executor rather than a family member, both to spare children the stress of the job and to minimize the possibility of family acrimony years later.
“A lot of clients have the experience of administering their parents’ or someone else’s estate, and in some cases [they say], ‘I don’t want to put this on my kids,’” he says.