Law360 Canada (September 30, 2026, 11:59 AM EDT) --
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| David Wagner |
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| Taiylor Wiebes |
For executors, managing a deceased’s commercial covenants requires fulfilling the dead’s obligations without exposing the trustee to personal liability. It is incumbent on lawyers to inform, advise and protect their clients regarding these obligations.
Experienced prudent lawyers remind executors that by taking on this role they are stepping into the shoes of the deceased and have to deal with all the contractual obligations of the testator. Did the deceased owe money: what arrangements have been made to pay the debts? Did they own a company: who is going to run the business? Are there deals in process: who is going to make those decisions and ensure the obligations are complied with? How do these obligations mesh with the duty to preserve the estate?
Lawyers need to remind their executor clients that the deceased’s contractual/fiduciary duties survive them and we lawyers have to be mindful of the jurisdictional crossing of the privity of contract that may collide with the fiduciary duty of preservation of the estate. That is why it is helpful for estate lawyers who are involved in complicated estates to know something about commercial and tax law.
The extent of the undertaking is variable and highly dependent on the individual facts of each case. Some estates are simple to administer, while others are significantly more complicated.
Most people mistakenly assume that the value of the estate is the most poignant signal for complexity. While certainly a factor — especially when considering exposure to liability — the value of an estate is just one of many factors and often not the most cogent signifier of complexity.
The deceased’s surviving contractual interests or obligations are often underexamined even though they can introduce some of the most significant complexities.
The legislation, such as Rule 11 of the
Rules of Civil Procedure and s. 38 of the
Trustee Act, ensures that certain types of interests survive death by introducing provisions to overcome the historical common law principle that a person’s right of action, whether arising in tort or contract, died with them. In Latin,
Actio personalis moritur cum persona.
The post-mortem survivability of contractual interests is a prerequisite of our modern credit economy. It provides certainty and enforceability. At the same time, a person’s death often constitutes a material change in circumstances and the strict application of the terms to a person’s estate can introduce administrative complexities and principled complications.
Imagine a scenario where the deceased entered into an agreement for purchase and sale that necessitates periodic payments by specific dates. If the deceased dies just prior to the next payment, the estate trustee could be left with the obligation to make the payment, but without access to the deceased’s funds.
It is also not difficult to imagine a shareholder’s agreement that imposes strict deadlines for the purchase of a shareholder’s interest in the event of a triggering event, which will often include death.
From a business perspective, it is often necessary to provide for tight deadlines to mitigate any impact on the business’s operations, but when a shareholder dies, the deadlines may prove unrealistic.
The issue is an area of interest for corporate lawyers, estate planners, litigators and professional trustees. Planners and corporate lawyers need to be cognizant of the realities of estate administration and ensure that the deadlines are realistic in the context of estate administration and that they advise their clients what is or is not effectively binding. For litigators, it is imperative they understand the rights of beneficiaries and trustees and how to best assert those rights. For professional estate trustees, it is critical to properly evaluate the complexity and scope of the estate to be administered.
For those who deal with these issues, or who are interested in them, a lunch and learn seminar on contractual obligations of the deceased will be hosted by Wagner Sidlofsky LLP on Oct. 6, 2026, starting at 12 p.m. and presented by David Wagner and Taiylor Wiebes of Wagner Sidlofsky LLP and Brendan Donovan of Donovan Kochman LLP. For more information and to register, please access this
link.
David Wagner is a partner at Wagner Sidlofsky LLP. He practises commercial and estate litigation. He appears regularly on behalf of clients in shareholder disputes, oppression remedies, contractual disputes and torts. In the context of estate litigation fights, David routinely is involved in will challenges, executor and accounting disputes.
Taiylor Wiebes is a lawyer at Wagner Sidlofsky LLP, practising in the estate and commercial litigation groups.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, LexisNexis Canada, Law360 Canada, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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