CanadaWhat duty of care does a trust company owe when managing estate assets?
A trust company in Canada owes a fiduciary duty of care when managing estate assets, requiring it to act with the care, skill, diligence, and judgment of a reasonably prudent trustee—and to keep estate assets strictly separate from its own.
What the Law Says
Federal law imposes clear, enforceable duties on trust companies acting as estate trustees or administrators in Canada.
Under the Trust and Loan Companies Act, a trust company managing estate assets is held to a high fiduciary standard. It must exercise 'the care, skill, diligence and judgment that a reasonably prudent trustee would exercise.' This means it cannot act carelessly, negligently, or in its own interest—it must prioritize the beneficiaries’ interests at all times.
In addition, the Act requires strict separation of assets: any property held by the trust company in a fiduciary capacity—including estate assets—must be kept entirely separate from the company’s own assets. This prevents commingling, ensures accountability, and protects beneficiaries if the company faces financial difficulty.
Statutory TextA trust company must exercise the care, skill, diligence and judgment that a reasonably prudent trustee would exercise.
— Trust and Loan Companies Act, s. 434 — Duty of care
Statutory TextA trust company that acts in a fiduciary capacity shall keep the assets held in that capacity separate from its own assets.
— Trust and Loan Companies Act, s. 58 — Fiduciary activities
What to Do
Verify that the trust company has established a dedicated estate account—separate from its corporate accounts.
Review regular estate accounting statements to confirm assets are not being used for the company’s benefit.
Ask for written confirmation that the company acknowledges its fiduciary duty under sections 434 and 58 of the Trust and Loan Companies Act.
Report suspected breaches (e.g., commingled funds or unexplained losses) to the Office of the Superintendent of Financial Institutions (OSFI).
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.