Managing Farmland During an Alberta Estate Dispute
Estate of Sept, 2024 ABKB
When a family member passes away, the work of handling their estate often begins long before anyone discusses who gets what. Personal representatives—sometimes called executors—are responsible for managing and winding down the estate’s affairs. That can include paying taxes, preparing financial statements, and making decisions about property that can’t sit idle during the administration process.
A recent decision from the Court of King’s Bench of Alberta, Estate of Sept, 2024 ABKB, shows how complicated those decisions can become when the estate includes an active farming operation and when the people responsible for managing that estate disagree on how to move forward. The ruling offers helpful guidance on what personal representatives can and can’t do, especially when a will is being challenged and major assets—like farmland—need attention in the meantime.
A Farm, a Will Dispute, and a Tight Deadline
The case involved the estate of Vernon Dale Sept, who passed away in September 2023. His estate was large, with an estimated value of more than $7 million. Most of that value came from farmland, heavy equipment, and the crops stored from past seasons. But the estate also carried significant debt, including at least $2 million owed to the Canada Revenue Agency.
Two individuals—Nathan Sept and Kris Satre—were appointed as personal representatives. They were also potential beneficiaries, depending on whether the deceased’s will is ultimately found valid. Under the will, Nathan would receive the entire farming operation and most of the remaining assets. If the will is found invalid, he and Kris would each receive half of the farming operation and the estate residue.
Because that issue hasn’t been decided, the personal representatives needed to keep the estate operating in the interim. The farm couldn’t sit idle. Land requires upkeep. Crops must be planted before the season begins. Equipment payments, insurance, and utilities also continue during administration. These realities created pressure to choose a path forward before the 2024 farming year began.
The two representatives, however, didn’t agree on what should happen next.
Two Competing Plans
Plan 1: A Crop-Sharing Agreement
Nathan proposed continuing the farming operation through a crop-share agreement with three neighbouring farmers. The estate would provide the land and equipment, while the other farmers would manage planting and harvesting. Profits would be shared if the season went well.
The challenge was cost and risk. The estate would need to spend at least $105,000 up front, with additional expenses expected. Even though Nathan believed grain contract proceeds might cover losses in a bad year, farming is unpredictable. A failed crop could worsen the estate’s already significant debt load.
The court also noted that the plan would allow other farmers to use estate equipment for their own benefit, without a guaranteed return to the estate. That created further concern about whether the proposal met a personal representative’s duties.
Plan 2: Renting the Farmland
Kris, represented by Jared Kantor, proposed renting the land at $105 per acre. This approach would generate approximately $100,000 for the estate in 2024. While rental income wouldn’t cover every expense—such as equipment loans, insurance, and utilities—it would create stable revenue without exposing the estate to farming risk or requiring upfront capital.
This contrast between risk and stability became the central issue: Should personal representatives pursue potential profit through risk, or choose the cautious, steady option?
What the Court Had to Decide
The judge relied on Alberta’s Estate Administration Act, which requires personal representatives to act with “care, diligence and skill” comparable to what an ordinarily prudent person would use in similar circumstances. The Act outlines core responsibilities such as identifying assets and debts, managing the estate, paying outstanding obligations, and distributing property once administration is complete.
What the Act does not permit is running a complex business—such as an active farm—unless the will specifically authorizes it. Since personal representatives are tasked with winding up the estate rather than operating a long-term enterprise, they must prioritize stability and risk reduction.
The judge emphasized that personal representatives differ from trustees. Trustees often manage property for long-term benefit, while personal representatives are meant to administer and distribute assets efficiently and responsibly.
How the Court Reached Its Decision
After reviewing both proposals, the court concluded that the crop-share plan exceeded the authority granted to personal representatives and exposed the estate to unnecessary risk.
The Will Didn’t Authorize Farming Operations
The court examined the will’s language closely. While it allowed insurance, repairs, leasing property, and general management, it did not authorize continuing the farm as an active business. Maintaining a full farm operation requires capital, long-term decision-making, and taking on risk—activities that fall outside a personal representative’s role without clear authority.
The Crop-Share Plan Carried Financial Risks
Farming always carries uncertainty. Significant upfront spending without guaranteed returns made the plan risky, especially for an estate already carrying substantial CRA debt. The court stressed the importance of limiting exposure while the estate’s future remained unsettled.
The Applicant’s Personal Motives Complicated the Issue
The court also noted that Nathan’s plan aligned with his personal hope of taking over the farm if the will was upheld. But administration decisions must reflect the estate’s interests—not a representative’s future expectations.
Renting Was the Prudent Option
Renting provided predictable income, kept the land productive, and avoided new financial risk. The judge concluded that this approach “better reflects the duties of personal representatives” under Alberta law. As a result, the crop-share plan was dismissed, and the farmland was approved for rental during the 2024 season.
Why This Case Matters
This ruling provides useful guidance for families and personal representatives dealing with estates that include active business assets, especially farms. A few important points emerge from the decision.
1. Personal Representatives Must Put the Estate First
Even if a representative expects to inherit certain property, they can’t shape estate decisions around that expectation. Their duty is to act for the estate as a whole.
2. Estates Should Avoid Unnecessary Risk During Administration
Courts expect personal representatives to preserve value. Launching or continuing risky ventures during administration often conflicts with that responsibility.
3. Wills Need Clear Authority for Business Operations
If someone wants their business—farm or otherwise—to continue running during estate administration, their will must authorize that explicitly. Otherwise, representatives should limit operations to low-risk activities.
4. Farming Estates Face Unique Pressures
Farms can’t simply pause. Land, machinery, and the growing season all impose deadlines. This case demonstrates how courts balance those demands with a representative’s obligation to maintain stability.
Final Thoughts
The Estate of Sept decision reinforces that estate administration is meant to emphasize stability rather than speculation. When a will is under dispute and the estate carries significant debt, the cautious path is often the most responsible one.
For families managing agricultural estates, this ruling underscores the need for clear planning and realistic expectations. Short-term decisions made during administration can significantly affect the estate’s long-term outcome. Alberta courts continue to highlight prudence, fairness, and the duties imposed by the Estate Administration Act.
