Testamentary Trusts in Quebec: When the Trustee Must Let Go — Lessons from Corbin c. St-Pierre for Beneficiaries and Trustees

Testamentary trusts in Quebec: what they are for, how they work, what beneficiaries can demand, what trustees owe, and when a court can bring the trust to an end. A commentary on Corbin c. St-Pierre, 2026 QCCS 3084.

A French-born businessman dies in Montreal in 2009, with no children. He leaves a substantial real estate portfolio: apartment buildings in Montreal and an outfitting operation (a hunting and fishing lodge business, known in Quebec as a pourvoirie) in the Gaspé region. Rather than leaving these assets outright to his 27-year-old niece and to his partner, he places them in a testamentary trust and appoints a lawyer, as liquidator (executor) and trustee, to decide when and how the property will “revert” to them.

Seventeen years, several judgments and one settlement later, the niece was still waiting to become the owner. On August 24, 2026, in Corbin c. St-Pierre, 2026 QCCS 3084 (in French), Justice David E. Roberge of the Superior Court ruled that the trust had achieved its purpose, that it was terminated, and that the trustee had to account for his administration and hand the property over. The case is an ideal opportunity to take stock of an estate planning tool that is as useful as it is misunderstood.

The facts: one trust, two beneficiaries and a cautious trustee

The 2008 will, supplemented by a codicil in 2009, leaves all of the deceased’s Canadian property to his liquidator-trustee “as part of a discretionary trust.” It directs him to exercise his powers so that “the economic benefit and the direct or indirect ownership” of the property goes to the beneficiaries: two buildings and the outfitting business to the niece, two other buildings to his partner. The trustee is the “sole judge of the legal mechanisms” to be used. No date, no age and no criterion is set for handing over the property.

In 2014, a first judgment (corrected in 2015) confirmed that a true trust had been created, to “protect his loved ones and provide for their needs.” Two separate trusts were then set up, one per beneficiary. The niece received a tax-free monthly payment, $30,000 a month since 2018, along with $1.3 million in 2014 to buy her home. The trustee nevertheless refused to transfer the buildings to her, citing among other things her lack of experience in property management. She sued in 2018. A 2021 judgment ruled against her, but it was set aside in 2022 at the request of the partner, who had not been made a party to the case. Finally, in November 2025, the two women settled their differences: in exchange for a substantial sum, the partner gave up any present or future right in the niece’s trust.

The testamentary trust, in plain language

Under Quebec law, a trust comes into being when a person (the settlor) transfers property into a separate patrimony, dedicates it to a specific purpose, and a trustee agrees to administer it (art. 1260 of the Civil Code of Québec). The Supreme Court confirmed these three conditions in Bank of Nova Scotia v. Thibault, 2004 SCC 29. Here is a feature of Quebec civil law that often surprises readers familiar with the common law: trust property belongs to no one, neither the trustee nor the beneficiary. It forms a “patrimony by appropriation” (patrimoine d’affectation), a pool of assets dedicated to a purpose. Unlike a common law trustee, the Quebec trustee does not hold legal title. The trust is testamentary when it is created by a will and takes effect upon death.

Why use one? To protect a minor or a young adult from their own inexperience; to provide security for a child with a disability without undermining their independence; to balance, in a blended family, support for a new spouse with the inheritance of children from a first union (income to one, capital to the others); to manage the transfer of a business or real estate; or to protect a vulnerable or spendthrift relative. The law does set limits: a personal trust cannot provide for more than two successive ranks of income beneficiaries, in addition to the capital beneficiary (art. 1271 C.C.Q.).

A word on taxation, which has changed considerably: since 2016, a testamentary trust is generally taxed at the highest marginal rate, except during the first 36 months of the estate (the “graduated rate estate”) and in the case of a qualified disability trust. Trust property is also deemed to be sold every 21 years, and nearly all trusts must now file a T3 return every year (Canada Revenue Agency). A testamentary trust is therefore no longer primarily a tax-saving device: it is a tool for protection and control.

Who has which rights, and who owes what?

The trustee has full administration of the property (art. 1278 C.C.Q.). In return, the trustee must act with prudence, diligence, honesty and loyalty, in the best interest of the beneficiary or of the purpose pursued (art. 1309); avoid any conflict between personal interest and duties, and disclose any conflict that arises (arts. 1310 and 1311); provide a summary account at least once a year (art. 1351); allow the books and supporting documents to be examined (art. 1354); and render a final account at the end (art. 1363). The trustee is entitled to reimbursement of expenses incurred in carrying out these duties (art. 1367). A beneficiary may be a trustee, but never alone: they must act jointly with a trustee who is neither settlor nor beneficiary (art. 1275).

The beneficiary may demand what the trust instrument grants. Beneficiaries supervise the administration, even if their interest is only contingent (art. 1287). They may ask the court to order the trustee to act or refrain from acting, or to remove the trustee (art. 1290), and may even be authorized to act in the trustee’s place if the trustee refuses or neglects to act without sufficient reason (art. 1291). A beneficiary may also renounce their right, as the partner did in the Corbin case. There is an important limit, however: as the Court of Appeal observed in Brassard c. Brassard, 2009 QCCA 898 (in French), beneficiaries are not the masters of the trust. They cannot, even all together, agree to wind it up and divide the property among themselves. Ending a trust early requires going through the court, under the conditions of article 1294 C.C.Q.

What the Court decided: “discretion governs the path, not the destination”

Justice Roberge began with the text of the will. The words “economic benefit and ownership,” combined with the verb “revert,” showed that the niece was not meant to settle for income: she was destined to become the owner, “at the appropriate time.” Other clauses also refer to the “final handover of the property.” The trustee relied on a conversation with the deceased, a few days before his death, in which he had asked whether his niece would be able to sell the buildings. The judge declined to read this as a prohibition: the conversation took place after the will was signed and added to its text. Had the testator wanted to forbid a sale, it would have been easy to say so.

The judge then distinguished the trust’s main purpose, to protect the beneficiary, from its secondary aim of providing for her needs. In 2008, the niece was 26 and had no settled career. In 2026, she is 44, has run the École de gemmologie de Montréal since 2016, has completed a short graduate program in agroforestry and is finishing a master’s degree in forest sciences with a view to running the outfitting business. She also undertook to honour the building management contract in force until 2028. The need for protection had disappeared. The judge added that a person’s “needs” are not purely financial: they include personal fulfilment.

The judgment is balanced toward the trustee. It recognizes that he acted neither arbitrarily nor in bad faith, and that his refusals had been reasonable “until recently.” But his refusal had become unreasonable: he “cannot transform the testamentary purpose of handing over the capital into a discretionary power of retention.” The judge criticized the trustee’s “backward-looking view” and summed up the principle this way: discretion governs the path, but not the destination.

The trustee could not end the trust on his own, however: only the court can do so, where the trust “has ceased to meet the first intent of the settlor” (art. 1294 C.C.Q.). The judge did exactly that, ordered a final accounting within 60 days, followed by the transfer of all the property to the niece. He ordered the trust to bear 50% of her reasonable legal fees, excluding the steps tied to the judgment that had been set aside, since the trustee could just as well have gone to court himself to break the deadlock.

Common disputes between beneficiaries and trustees

The Corbin case illustrates the most classic conflict: the beneficiary wants the capital, the trustee wants to preserve it. It is not the only one. Frequent disputes include:

Lack of information: a beneficiary who receives no annual account or cannot consult the books has a remedy (arts. 1351 and 1354 C.C.Q.).
Distributions seen as insufficient or unfair between beneficiaries, especially in a discretionary trust.
Imprudent management: in Bell c. Molson, 2015 QCCA 583 (in French), trustees were held personally liable for imprudent management and denied reimbursement of their defence costs by the trust.
Conflicts of interest, particularly where a family member is both trustee and beneficiary. In Droit de la famille — 13681, 2013 QCCA 501 (in French), the Court of Appeal held that a mere appearance of conflict is not enough to remove a trustee.
Removal of the trustee: it requires serious breaches, not just mistrust (Brassard). In Charron c. Marquis-Charron, 2025 QCCS 4682 (in French), the Superior Court replaced a trustee with two independent trustees.
Remuneration and fees charged to the trust. In the Corbin case, the judge noted that the trust’s administration generated substantial annual fees, from $85,000 to $128,000 a year between 2018 and 2020 according to the exhibits cited.
Trusts on separation or divorce: property held in trust may be taken into account, notably for the family residence (Yared v. Karam, 2019 SCC 62) or in setting support.

Why this case stands out

First, it is a reminder that a trustee is not a lifelong guardian. The trustee’s discretion is real, but it serves the purpose set by the deceased and must evolve with the beneficiaries’ circumstances. The 2014 judgment had already found that the testator wanted the trust to end “at the latest, upon the death of the beneficiaries,” leaving the door open to an earlier end.

Second, it shows the cost of a silent will. With no criterion (an age, a degree, a life milestone), it took years of litigation and several judges to determine what the testator really wanted.

Third, it deserves a critical look. One may ask whether the court substituted its own judgment for that of the trustee the deceased himself had chosen and entrusted with broad discretion. In Brassard, the Court of Appeal declined to use article 1294 to set aside the trustee chosen by the settlor. The judgment answers this concern by relying on the wording of the will, and the renunciation by the only other beneficiary weighed heavily. Readers trained in the common law will think of the rule in Saunders v. Vautier, which allows adult, unanimous beneficiaries to collapse a trust themselves. The judgment points out that this rule does not apply in Quebec: here, only a judge can decide.

Key takeaways

If you are preparing your will, state clearly when and on what conditions the capital is to be handed over (an age, a milestone, an objective criterion), who will receive the property if a beneficiary dies, and how the trustee is to be replaced. An independent trustee or a co-trustee can reduce the risk of conflict.

If you are a beneficiary, ask for the annual account and review the books; keep your exchanges in writing; document how your situation has evolved (training, experience, stability) if you are seeking the capital. Before going to court, make sure all other beneficiaries are made parties: in the Corbin case, that oversight cost an entire judgment and the related legal fees.

If you are a trustee, reread the trust instrument regularly and ask what a reasonable person would do to achieve the deceased’s purpose today, not on the basis of the situation fifteen years ago. Give written reasons for your decisions, disclose any conflict of interest and render your accounts on time. If you reach an impasse over the meaning of the will, do not wait to be sued: asking the court for directions yourself may be wiser and less costly.

For everyone, mediation is often worth considering before trial. The settlement reached in 2025 in this case is what finally unblocked a situation that had been frozen for years.