THE LAWYERS WEEKLY
March 4, 2011 | 15
A group of lay people were asked at a recent seminar
if any of them had acted as an executor before.
About three-quarters of the group proudly raised
their hands. The next question—would any of you
do it again? — resulted in many fewer raised hands.
For those who counsel execu- tors, the reaction is not surprising. The workload, the endless calls from beneficiaries about their inheritance, the stress of deadlines and working with profes- sionals, the necessity of keep- ing meticulous accounting, and even the reams and reams of paper and docu- ments that must be kept, make the thankless job time- consuming and frustrating. More correctly, the job is worse than thankless. How often do we see disgrun- tled beneficiaries criticis- ing the job the executor has done and seeking to reduce the compensation that the exec- utor has sought? But it can get much, much worse. When you take on the job of executor, you are putting your own personal assets on the line. As Justice Maurice Cullity stated in Personal Liability of Trustees and Rights of Indemnification: “The risk of personal liability is an inci- dent of the office of trustee.” Negligence by the executor can render the executor person- ally liable to the beneficiaries and creditors of the estate. Some common examples where execu-
tors could be found negligent are:
n;improperly interpreting the will;
n;paying the wrong amounts to
the wrong parties;
n not prudently investing the
n;not properly protecting estate
assets (for example, not changing
locks or purchasing fire insurance);
n;improvident settlements; and
n;failure to keep accurate rec-
ords of the administration.
Personal liability even extends
to an executor who makes a con-
tract in relation to the estate
assets. The executor is personally
liable to the contractor, but may
be subrogated to an executor’s
right of indemnity against the
estate if the expense or charge of
the estate was properly incurred
(see Dockrill v. Kikas, 
O.J. No. 134 (Ont. S.C.J.). This
includes the hiring of profession-
als, such as lawyers, accountants,
real estate agents and the like.
Under Ontario’s Estates
Act and in many other jurisdictions, a judge may order
damages against the executor for misconduct, neglect
or default which results in
loss to the estate.
There are many examples
where courts have found
that executors have
breached their duty as fiduciaries. Often, the executor’s compensation is
reduced and no additional damages are ordered against the
However, in Zimmerman v.
McMichael Estate,  O.J.
No. 3022, Justice George Strathy
found that the trustee had been
negligent in the administration
of the trust. In addition to being
deprived of compensation, the
court ordered that he reimburse
the estate personally. The trustee
was also required to pay the
beneficiaries over $270,000 in
costs from his own pocket.
As lawyers, we have professional E&O insurance which may
protect us when we act as a sole
executor. Of course, we pay the
premiums for that policy and, if a
claim is made on it, we pay the
increase in the premiums and the
deductible. What about our client/
executors who have no insurance?
At the Ontario Bar Association
Annual Institute this year, a new
product — executor’s insurance —
was unveiled to the profession.
The benefits seem clear; a
client won’t have to put his or her
own house on the line when
granted the “honour” of acting as
executor. The executor would
also have some protection for
legal costs incurred in defending
a negligence claim by the bene-
ficiaries which might not be cov-
See Insurance Page 16
from personal liability