Written By Barbara J. Stratton, Q.C., Sarah Huot, and Odessa M. O'Dell
Miss Manners may just be worth listening to for those involved in wills and estate litigation. In fact, not doing so may be to your detriment given that poor conduct can cost you with the courts.
The Unsuccessful Litigant
Historically, costs incurred by the parties in will and estate litigation were paid out of the estate. Today, costs are to follow the event and the litigation must fall within a recognized exception in order for costs to be paid by the estate. In determining whether the estate should be responsible for the costs, the court will consider factors such as whether the testator caused the litigation, whether the challenge to a will was reasonable, whether there is an allegation of undue influence, and the size of the estate.
Another important factor the court will consider is whether the conduct of the parties was reasonable. Reprehensible conduct can put the unsuccessful litigant at risk of being ordered to pay not only their own costs, but also the costs of the successful party.
Conduct of the Personal Representative
The role of a personal representative of an estate (also known as an executor) is an important but challenging one. Personal representatives owe a fiduciary duty to the beneficiaries and must act in the best interests of the estate. This includes the need to be prudent when incurring expenses, and to disclose an accounting of their expenses to the beneficiaries.
While personal representatives are generally entitled to be reimbursed for expenses that are reasonably incurred, including costs related to court procedures, the job isn't without personal risk. A personal representative's behaviour in performing their duties can land them in hot water, and can lead to an order for costs against them personally, or out of their portion of the estate if they are also a beneficiary.
Drawing out the litigation, or making multiple court applications to delay the administration of the estate for personal reasons, are examples that have led to orders for costs against personal representatives. Courts have also been particularly tough on personal representatives where they perform their duties out of self-interest or are vindictive towards the other beneficiaries. This includes where a personal representative uses funds from the estate for personal use.
Where the court finds the behaviour of a personal representative particularly offensive, there is the risk of an order for the personal representative to not only pay their own costs, but also the costs of the successful party.
Mind your Manners
Regardless of the role one plays in the administration of an estate, minding your manners is important to remember. When in doubt about a will or the extent of your responsibilities, be sure to obtain proper legal advice.