Thursday, April 21, 2011

Passing Over an Executor: Re Thomasson Estate

In British Columbia, you may choose in your will whom you wish to be your personal representative, or executor, on your death. If the person you choose is able and willing to act, the Supreme Court of British Columbia will usually grant probate of your will to your chosen executor.

But there are circumstances where on application of a beneficiary, the court may pass over an executor.

This occurred in the recent decision In Re Thomasson Estate, 2011 BCSC 481.

Agnes Thomasson and Herbert Thomasson had four children. In their wills, they appointed two of them, Brian Thomasson and Alexander Thomasson, as their executors, and left their estate to three of their children. They had previously transferred shares in their family business to Alexander Thomasson, and he was not left anything in his parents wills.

In addition to transferring shares in the family business, Agnes and Herbert Thomasson transferred some land to Alexander Thomasson. Brian Thomasson wanted to make an inquiry into the transfer of the land, and he applied to pass over Alexander Thomasson. Brian Thomasson argued that Alexander Thomasson would have a conflict of interest if the court granted probate to Alexander Thomasson.

Madam Justice Gerow agreed with Brian Thomasson’s submissions and ordered that Alexander Thomasson be passed over, but reserved his right to be added in the future after any enquiries into the transfer of land to him were completed. She wrote at paragraphs 27 through 29:

[27]         In this case, Alex is not a beneficiary under either of his parents’ wills, and his only interest in the estates is as an executor. The other named executor wants to make enquiries into the transfer of the Property to Alex in order to determine what, if any, interest the estates have in the Property, and what, if any, obligations Alex and his wife have to the estates as a result of the transfer.

[28]         The application is not to remove Alex as an executor but simply to pass over him so that an enquiry can be undertaken of the transfer of the Property to him and his wife by the deceased in 2006, and a determination can be made if any further actions need be taken in regards to the Property.

[29]         In the circumstances of this case, it is my opinion that there is a perceived conflict of interest between Alex in his role as an executor and his interest in his personal capacity. If an action is instituted by the executors as a result of the transfer of the Property, it would be against Alex. In my opinion, Alex, in his capacity as executor, cannot attack the transfer of the Property to himself while at the same time maintaining, in his personal capacity, that the transfer of the Property was proper. By making such a finding I am not prejudging the case. I am simply of the view that, in the circumstances of this case, if an action is commenced as a result of the enquiries into the transfer, Alex cannot conscientiously act as a plaintiff in his capacity as an executor in a case where he will be the defendant.

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