One of the most common questions in estate litigation is:

"If I win, will the other side have to pay all of my legal fees?"

The answer is often no.

Many people are surprised to learn that there is a significant difference between winning an estate dispute and obtaining full reimbursement of legal costs. Even where a court orders costs to be paid from an estate, the successful party may recover only a portion of what they actually spent.

The Ontario Superior Court's decision in Kunka Estate v. Giasson, 2026 ONSC 4290 provides an important reminder that estate litigation costs are governed by fairness, proportionality, and judicial discretion.

The Estate Dispute

The litigation involved a dispute concerning beneficiary designations on registered investment accounts.

The estate trustee challenged beneficiary designations made in favour of another individual and argued that the assets should instead fall into the estate.

At the conclusion of the litigation, the court dismissed the estate's application.

The successful party then sought recovery of substantial legal costs.

What followed was a detailed examination of how costs should be awarded in estate litigation.

Estate Litigation Is Different From Other Civil Litigation

Estate disputes occupy a somewhat unique position within the legal system.

In ordinary civil litigation, courts generally follow the principle that the losing party pays a portion of the successful party's costs.

Estate litigation can be different.

Courts sometimes recognize that estate disputes arise because of:

• Uncertainty in a will;
• Ambiguous estate planning;
• Actions taken by the deceased;
• Questions concerning capacity;
• Conflicting beneficiary interests; or
• Legitimate legal uncertainty.

In these circumstances, courts may conclude that costs should be paid from the estate itself rather than by a particular party.

Costs Paid From the Estate Are Not the Same as Full Reimbursement

A key lesson from the case is that an order requiring the estate to pay costs does not automatically entitle the successful party to recover every dollar spent on legal fees.

These are separate issues.

The court must determine:

1. Who should pay the costs; and
2. How much should be paid.

Even when the estate bears responsibility for costs, the court still evaluates whether the amount claimed is reasonable.

Full-Indemnity Costs Are Rare

Courts generally recognize several levels of cost recovery.

The highest level, often described as full-indemnity costs, is reserved for exceptional circumstances.

Examples may include:

• Dishonest conduct;
• Abuse of process;
• Bad faith litigation;
• Fraud; or
• Conduct deserving serious judicial sanction.

The court found that none of those factors existed.

The estate trustee had advanced the litigation position on behalf of the estate and there was no evidence of the type of misconduct that would justify full-indemnity costs.

As a result, the successful party did not recover the entire legal bill.

Settlement Offers Do Not Automatically Lead to Higher Costs

The successful party also argued that a previous settlement offer justified an enhanced costs award.

The court disagreed.

While settlement offers can have significant cost consequences, courts look closely at:

• The timing of the offer;
• The extent of compromise;
• The reasonableness of the proposal;
• The legal uncertainty involved; and
• Whether rejection of the offer was unreasonable.

An offer that requires very little compromise may carry less weight than a proposal that meaningfully addresses the risks faced by both sides.

The court concluded that the circumstances did not justify elevated costs.

Proportionality Remains a Major Consideration

Another important aspect of the decision was proportionality.

Estate litigation can become expensive very quickly.

Courts increasingly focus on whether legal costs are proportionate to:

• The issues involved;
• The complexity of the dispute;
• The value of the assets at stake; and
• The overall conduct of the litigation.

Even where legal fees were honestly incurred, the court still retains discretion to determine whether the amount sought is reasonable.

Estate Trustees Are Not Automatically Punished for Losing

Beneficiaries sometimes assume that if an estate trustee loses a court application, the trustee should personally bear the costs.

The case demonstrates that this is not always the outcome.

Estate trustees frequently face difficult decisions when administering estates.

Where a trustee advances a position in good faith, on reasonable legal grounds, and in an attempt to fulfill fiduciary duties, courts may be reluctant to impose personal cost consequences.

The focus is often on whether the trustee acted reasonably rather than whether they ultimately succeeded.

Costs Strategy Matters

The decision highlights the importance of considering costs from the outset of any estate dispute.

Parties should think carefully about:

• The strengths and weaknesses of their claims;
• The proportionality of litigation steps;
• Settlement opportunities;
• The possibility of partial recovery only; and
• Whether continued litigation remains economically sensible.

Winning the legal argument does not always translate into complete financial recovery.

Practical Lessons for Estate Litigants

Do Not Assume You Will Recover Every Dollar

Success in court does not guarantee full reimbursement of legal fees.

Make Meaningful Settlement Offers

Well-structured and realistic offers can significantly influence costs outcomes.

Focus on Proportionality

Courts increasingly scrutinize whether litigation expenses are reasonable.

Estate Trustees Should Document Decision-Making

Clear records help demonstrate that litigation decisions were made in good faith.

Consider Costs Throughout the Process

Legal strategy should account for possible costs outcomes from the beginning of a case.

The Bottom Line

Kunka Estate v. Giasson, 2026 ONSC 4290 is an important reminder that costs awards are ultimately discretionary. Even where a successful party obtains an order requiring costs to be paid from an estate, the court may still limit recovery to an amount it considers fair, reasonable, and proportionate.

The decision underscores that estate litigation is not only about the substantive legal issues. It is also about proportionality, litigation conduct, settlement strategy, and fairness in the administration of justice.

How MerGen Law Can Help

At MerGen Law, we assist clients throughout Alberta with estate litigation, beneficiary disputes, executor disputes, will challenges, trust litigation, estate administration, and cost recovery issues. Whether you are considering litigation or responding to an estate claim, we are here to help.

This article is intended for informational purposes only and does not constitute legal advice. Individuals facing concerns about elder abuse should seek professional advice tailored to their specific circumstances.