The executors failed to administer the estate in a 'reasonable and prudent manner': court
In a recent decision, the Saskatchewan Court of Appeal upheld a previous judgment that ordered the removal of an estate's executors after the application for probate was delayed for over eight years.
In Graves v Nagy, 2024 SKCA 17, the court ordered the removal of Jo-Ann Graves and Dennis Nagy as executors of the estate of Blanche Marie Therese Nagy, who passed away in 2012. The appellate decision stemmed from a prolonged legal battle over the administration of Blanche's estate.
Blanche's will, executed in 1983, named Jo-Ann and Dennis as co-executors and listed seven of her children as beneficiaries. Controversy arose when Karen Nagy, one of the beneficiaries, challenged the management of the estate, particularly criticizing the delay in applying for probate, which did not occur until more than eight years after Blanche's death. The estate comprised significant assets, including land valued at over $380,000 and a bank account.
The initial judgment by the Court of King's Bench pointed to several failures on the part of the executors, including the prolonged delay in applying for probate, inadequate record-keeping, and failure to file estate tax returns. The court highlighted the executors' inability to administer the estate in a "reasonable and prudent manner," ultimately leading to their removal.
The Court of Appeal emphasized that executors must manage estates diligently and transparently and follow both the law and the deceased's wishes. The court also addressed the need for a "just and full account" of the estate's administration, emphasizing the importance of accurate record-keeping and timely tax filings.
Furthermore, the court acknowledged the complex dynamics in estate administration, especially when family members are involved. The court emphasized that it would intervene when necessary to protect the interests of the beneficiaries and ensure that the executorship was carried out effectively.
The case also highlighted the judiciary's reluctance to interfere with a testator's choice of executor without compelling evidence of mismanagement or breach of duty. However, when such evidence is presented, as in this case, the court will act decisively to rectify the situation.
Ultimately, the Saskatchewan Court of Appeal decided to remit Karen Nagy's application to be appointed as executor back to the Court of King’s Bench and suggested a further examination of the estate's administration, focusing on ensuring the estate is finalized in a manner that aligns with both legal standards and the best interests of all involved parties.
