In a recent will challenge case, the court ruled that the estate trustees during litigation could not access estate funds to pay their legal fees.

The testator (“Hans”) and his late wife (“Colleen”) married in 1987.  Together, they had 7 children from their previous marriages. In 2005, Hans and Colleen made wills in which their respective estate would be gifted to the surviving spouse and upon the death of the surviving spouse, their joint estate would be equally distributed to their 7 children. Colleen died in 2012. During her lifetime, she transferred $1 million in assets to Hans. After her death, Hans changed his will multiple times to favour his own children and leaving either a small specific bequests to Colleen’s children or nothing at all.

Hans died in 2021. Colleen’s children (the “Respondents”) challenged the validity of Han’s will.  Pursuant to an Order Giving Directions obtained on consent, three of Hans children were appointed estate trustees during litigation (the “Applicants”).

The Respondents brought a motion, in part, requesting that the court prevent the Applicants from using estate funds to cover their litigation expenses.  The court agreed and ordered the parties to cover their own costs until the litigation was resolved.

While noting the importance of estate trustee indemnification as found in both caselaw and legislation, the court found that in this case, the Order Giving Directions did not allow for the Applicants to access estate assets for their litigation expenses. Additionally, the court also found that for equity reasons, the enriched Applicants (who benefitted from Colleen transferring her wealth to Hans while alive) should not have access to estate funds “to level the playing field” for the Respondents.

Thanks for reading,