A common misconception is that estate litigation carries little personal financial risk because everyone’s legal fees will come out of the estate. McDougald Estate v. Gooderham is a leading Ontario authority rejecting that assumption.

The Court of Appeal explained the modern approach to estate litigation costs. Courts should scrutinize the proceeding and generally apply ordinary civil litigation costs principles unless relevant public policy considerations justify another approach.

Those considerations can include difficulties created by the deceased, such as ambiguity in the will, or reasonable grounds for questioning the will’s validity.

Payment from the estate is therefore possible, but not automatic. The nature of the dispute and the reasons for bringing it matter.

The approach recognizes that estate funds should not routinely finance unmeritorious claims at the expense of beneficiaries. The decision has been followed in subsequent estate litigation addressing when the estate, rather than individual parties, should bear costs.

What this could look like in practice

Imagine three siblings disagreeing over a modest estate. One proposes extensive litigation over an issue that would change their inheritance by a relatively small amount.

A useful planning exercise would compare the disputed amount with estimated legal expenses and the practical objectives. The siblings might also identify what information could narrow the disagreement, such as a missing statement or an explanation of an accounting entry.

By contrast, a genuine uncertainty affecting the administration of the entire estate may require a different assessment. In either situation, assuming that someone else will ultimately pay is an unreliable basis for deciding how to proceed.

The takeaway

Discuss costs at the beginning and revisit them as the evidence develops. Consider what a proposed step is likely to achieve, whether a narrower approach could answer the question, and whether settlement would meet the underlying objective. Understanding financial exposure helps parties make informed decisions throughout an estate dispute.

The information on this page is provided for general educational purposes only and does not constitute legal advice. These summaries highlight selected principles and do not address every issue or subsequent legal development. Examples are hypothetical and do not predict the outcome of any case. The application of a decision depends on the facts and applicable law. Reading this page or contacting our firm does not, by itself, create a lawyer-client relationship. If you have further questions or require advice about your situation, please contact us.