Alberta court upholds estate repayments but reverses premature inheritance deduction

The Alberta Court of Appeal has upheld substantial repayment orders and the removal of an estate representative, while overturning a direction that would have automatically reduced her inheritance by $518,595 before a dispute over her mother's will was decided.

In Silva Estate (Re), 2026 ABCA 325, released October 15, 2026, the court ruled that Sandra Gaspar Deer must still hold the $518,595 in trust. But she is not required to pay that amount into trust with the respondent's law firm, and the accounting proceeding could not settle how it would ultimately affect her share of the estate.

The panel described that change as a minor issue in an otherwise unsuccessful appeal. It considered Sandra's sister, Annabelle Silva, the successful party for costs purposes, although the amount of costs remained unresolved.

Accounting dispute followed mother's death

The dispute concerned Sandra's handling of her mother's property, first under an enduring power of attorney and later as the estate's personal representative. After moving to Alberta, her mother made a will naming Sandra as personal representative and Sandra's husband as the alternate. The will also addressed a house being built on the couple's land.

Following her mother's death in December 2021, Annabelle sought an accounting and court supervision of the estate. Her March 2023 application requested, among other things, repayment of improperly distributed assets and restrictions on Sandra's authority. Sandra later filed both an accounting application and an application to prove the will. Annabelle challenged the will's validity; that dispute had not been heard.

The chambers judge found the accounting inadequate and ordered repayment of an unproven CA$506,000 gift, US$500,693 transferred in connection with the mother's Costa Rican property without an accounting, and $59,025 in unexplained withdrawals from a registered retirement income fund. The appeal court upheld those repayment orders, including the requirement that the amounts be held in trust with Annabelle's lawyer.

Sandra did not challenge the underlying factual findings or the finding that she had breached her fiduciary duty as attorney. Instead, she argued that the judge lacked jurisdiction to grant repayment and removal remedies in the particular application being heard.

Repayment was within the accounting court's powers

Sandra argued that restitution had not been pleaded and that the relief belonged in the separate proceeding concerning the will. The appeal court rejected that procedural objection.

Section 10(4) of Alberta's Powers of Attorney Act gives the court broad discretion to make appropriate accounting orders. The panel explained that an accounting involves more than producing records: where expenditures are unexplained or improper, the remedy can require money to be returned to the person whose property was managed or, after death, to that person's estate.

The court also pointed to powers under the Judicature Act and the Alberta Rules of Court to grant remedies outside the precise wording of the pleadings when doing so is fair and just. Here, Annabelle had specifically sought repayment. Sandra understood the relief being requested and had responded to it, so the order caused neither surprise nor procedural prejudice. The evidence also allowed the judge to quantify the sums that had to be repaid.

House expenditure could not predetermine inheritance

A different issue arose over the house. The chambers judge had identified a $518,595 difference between an estimated $400,000 cost and $918,595 spent on construction. Rather than ordering repayment of that difference, the judge directed that it be deducted or offset from Sandra's share of the estate's residue when the estate was distributed.

The appeal court found that direction premature because the will still had to be validated and interpreted. The accounting could identify and preserve the money, but it could not predetermine Sandra's entitlement under the disputed will. The amended result leaves her holding the $518,595 in trust without imposing the automatic deduction from her eventual residual share.

Removal of representatives upheld

The panel also rejected the argument that Sandra and her husband could only be removed through the will proceeding. Alberta's Estate Administration Act and the court's inherent authority permit removal to protect an estate and its beneficiaries. That authority concerns the representative's role and extends to an alternate representative.

The judge had found serious accounting failures, a lack of trustworthiness in presenting and defending the accounts, and a risk to the remaining estate if Sandra continued. The appeal court upheld both removals and the appointment of a neutral representative. It did not determine the legitimacy of all spending after the mother's death, which remained unresolved.

The decision therefore preserves the accounting and protective remedies while leaving the disputed will and final distribution to be decided. If the parties cannot agree on appeal costs within 60 days, they may make written submissions limited to five pages.