When someone dies, particularly if they die without a will, there could be various parties who want to position themselves as executors of the estate or as beneficiaries of the estate. Determining what happens in these situations can take a considerable amount of time, particularly if the matter goes to litigation. In the meantime, other parties might come across assets that belong to the estate and as such, need to know what to do with them. This was the situation in a recent decision from the Ontario Superior Court of Justice, in which proceeds from the sale of a home were discovered by a bank.

Mortgage went into default

The matter arrived before the court when the applicant, TD Bank, sought an order to pay surplus funds it claimed to have realized through a mortgage sale of property that belonged to the deceased.

The deceased had owned property north of Toronto, and at some point its mortgage had gone into default, with the result being that the home was sold. Following the sale of the home, there were proceeds that went to the deceased or her estate. The amount of the surplus funds was not insignificant, amounting to $670,624.72

Trustee of the estate is yet to be determined

The respondents in the case were two parties looking to involve themselves in the estate. The first group were the siblings of the deceased, while the other was the spouse of the deceased.  The spouse expressed an interest in the surplus funds, but did not respond to the application before the court.

The bank had reached out to the responding parties, and intended to await the appointment of an estate trustee, but for reasons not stated, was now looking to hand the funds over to the courts.

The court noted that the Rules of Civil Procedure allow for parties to seek orders that money be paid into the court if two or more persons have made adverse claims to the property, and if the party seeking the order claims no beneficial interest in the property.

In this case, TD Bank met both requirements of the test, having no interest in the property, and with two parties seeking to become trustees of the estate. As a result, the court was satisfied that the funds could be paid into the court and held pending a further order which may result from a determination of who is entitled to the funds. The court did not see any reason to make the bank hold onto the funds.

The responsibilities that come with being appointed a trustee, executor, or attorney of an estate can be significant and can come with liabilities. Those who find themselves in any of these roles should consult with an estates lawyer as soon as possible and before taking any action or making any decisions.

At Derfel Estates Law, we regularly advise trustees, executors, and attorneys on their responsibilities and obligations. We can work with you on a one-time basis and answer stand-alone questions that you may have regarding the administration of a will, estate, or about attorney duties, or we can provide ongoing advice and guidance for the duration of your role.

If you have been appointed a trustee, executor, attorney for property, or attorney for personal care, contact Derfel Estate Law to speak with an estates lawyer. We regularly provide guidance to fiduciaries to ensure they are carrying out all of their obligations and making decisions that are in the best interests of testators or grantors, while minimizing the fiduciaries’ legal risks. Call us at 416-847-3580 or contact us online to schedule a consultation.