Why an early solvency assessment matters
A person considering whether to act as an estate trustee should form a reliable picture of the deceased’s assets and liabilities as early as possible. If the estate’s liabilities exceed its assets, the estate is insolvent. Insolvent estates carry elevated risk, including potential disputes about priority of payments and increased scrutiny of administration decisions. In that context, it is generally prudent to avoid taking steps that could be characterized as “intermeddling” in the administration until the individual has decided whether to accept the role (and, where required, obtained formal authority).
What “intermeddling” means (and why it matters)
“Intermeddling” refers to undertaking acts that are typically performed by an estate trustee (particularly dealing with estate property or liabilities) before the person is formally acting with proper authority. Examples commonly cited include paying debts from estate funds, collecting or distributing assets, selling property, or representing oneself to third parties as the estate trustee. Intermeddling can expose the person to being treated as an executor (estate trustee) de son tort , also known as a “deemed executor”, with corresponding duties and potential personal liability, despite the absence of a court appointment.
Where intermeddling has occurred, the individual may need to step aside through a resignation/removal process, commonly involving court oversight, rather than a simple renunciation.
Intermeddling can result in exposure to trustee-type liabilities without the clarity, legal protection and practical benefits of formal appointment (e.g., institutions readily recognizing authority, and the ability to implement standard protective steps with clear standing).
Practical risk management: how to avoid creating “deemed trustee” exposure
Until the estate’s solvency is reasonably understood (and the decision to accept the role is made), risk is reduced by avoiding conduct that looks like administration:
Avoid (higher risk of intermeddling):
- paying debts from estate funds or “settling” creditor claims
- collecting, transferring, or distributing estate assets
- selling or listing property for sale (or signing agreements in that capacity)
- telling banks/creditors/beneficiaries that one is the estate trustee (or signing as such)
Prefer (information-gathering: describing one’s status as a person who is inquiring to determine whether they want to become an estate trustee):
- compiling an inventory of known assets/liabilities from paperwork
- requesting information where disclosure is permitted without stating that this is to administer the deceased’s estate
- taking some very limited steps aimed at preservation (e.g., securing property) while avoiding transactions or distributions
Next steps
If there is any possibility an estate may be insolvent (or if there are time-sensitive creditor issues, fraud concerns, or uncertainty about what steps can be taken without “intermeddling”) it is worth getting tailored advice before making calls, signing documents, or moving funds. A short consultation with RMS Estates Law can help confirm the estate’s likely solvency, identify immediate “do’s and don’ts,” and set out a practical plan to protect the prospective trustee from unnecessary personal exposure.
PLEASE NOTE: The content of this blog is provided for informational purposes only and does not constitute legal advice. Reading this material does not create a solicitor-client relationship. Estate administration is fact-specific and may require advice from a qualified estates lawyer. This information has been prepared in accordance with the laws currently applicable in Ontario and may not reflect future legal developments.
