A history of personal conflict isn’t enough to justify removing an estate trustee, the Supreme Court of British Columbia ruled in a case where a man sought his sister’s removal after they squabbled over her handling of their father’s estate.
According to the court’s decision, in 2018, Douglas Campbell Steedman died leaving an estate that was to be divided equally between his four adult children and held in trust for them. One of his daughters, Deborah Paterson, was named executor and given the job of administering the estate.
She divided the estate into equal shares of approximately $350,000 each, and invested the capital with Investors Group Wealth Management (now IG Wealth Management). Since then, she has made annual distributions to each of the beneficiaries, paying out the income generated by the investments without depleting the capital — payouts that have ranged between $18,000 in 2019 to $28,000 in 2025.
One of the beneficiaries, Derek Scott Steedman, objected to this approach. He asked the court to remove his sister from her role and to appoint a professional trustee as her replacement.
According to the court, he argued that his sister, “has allowed personal animosity to interfere with her proper administration of his trust.”
Among other things, he alleged that she, “wilfully misinterpreted the will, unreasonably refused to respond to requests for information, improperly failed to consider his needs and acted in a conflict of interests …”
The court said that, while there has been conflict between the siblings, there’s no evidence that she has improperly managed the estate.
“The record shows that she administered the estate and made equal annual distributions to her siblings based on her understanding of the will and the intentions of the testator,” it said.
Still, the issue for the court was whether the history of conflict between the siblings would prevent the trust from being handled properly in the future.
Ultimately, the court decided that was not the case, and it denied the application to remove Paterson as trustee.
“Animosity is not necessarily a reason to remove a trustee,” it said.
And, in this case, despite the personal conflict, the court found that the trustee has acted within her discretion under the will.
The court did find that, in one instance, Paterson didn’t consider her brother’s individual needs when determining his annual payout.
But, it concluded that her payout decisions haven’t been based on any personal conflict between them. Rather, her decisions were based on her understanding of her father’s intentions and her belief that her brother didn’t need more money, it found.
While the will doesn’t mandate that the trusts only pay out the income generated by their investments and retain the original capital, the court found that the trustee’s, “approach of equal annual payments based on the market performance of the trusts is within her discretion, provided that she is open to considering additional payments based on Derek’s individual needs and does not base her decisions on irrelevant considerations.”
The court also said that the one instance where his needs weren’t fully considered isn’t enough to justify her removal as trustee.
“[T]he test for removing a trustee is not whether the trustee has executed her functions ‘perfectly or ideally’ in the past, but rather forward-looking to whether the estate is likely to be administered properly in accordance with the fiduciary duty of the trustee and for the benefit of the beneficiary,” it said.
In this case, the court found that Paterson is “fully capable” of carrying out those duties, despite the past personal conflict between the siblings.
And, the court said that it must consider the interests of all the beneficiaries in deciding whether to replace the trustee or not.
“In my view, the interests of all the beneficiaries are best fostered by allowing Deb, who is familiar with the estate and the trust accounts, to continue with her work and complete the administration of the testamentary trusts,” the court concluded.
For future distributions, she should consider her brother’s financial needs, the court said — and her demands for financial disclosure from him to prove those needs must be reasonable.
“Derek cannot refuse to provide reasonable financial disclosure if he wants a larger distribution. But Deb should not be imputing income to Derek or assessing whether he can sell assets or increase his debt,” it said.