All About Estates

How to Provide for Your Island in Animal Crossing: New Horizons After Your Death: Part III

This is a three-part blog series that seeks to explore the manner in which one can conduct estate planning with respect to their copy of the popular 2020 Nintendo Switch video game Animal Crossing: New Horizons. Part I discussed the importance of this topic and described the applicability of a non-charitable purpose trust to this type of estate planning. Part II examined the practical considerations for operating a non-charitable purpose trust for this purpose. Part III explores the duties and powers that the trustees of such a trust would have, as well as how to enforce their obligations.

For greater certainty, the principles discussed in this blog post, while focusing on Ontario and Canadian law, are based on common law principles. Many other common law jurisdictions (such as the United States and the United Kingdom) share similar principles.

Note also that the provisions here are generally applicable to one’s copy of any entry in the Animal Crossing franchise.

Third Time’s a Charm

Welcome to the third and final entry in this three-part blog series about estate planning for supporting the villagers and island in one’s copy of Animal Crossing: New Horizons for the Nintendo Switch. In the last blog entry, we took a brief look at who the trustees of such a trust should be, and when they might decide to hire an agent to administer the trust on their behalf. We also examined what might constitute the trust property, as well as the considerations surrounding real world money as trust property vs. Bells as trust property.

So, How Do We Know That the Trustees Are Doing Their Job Properly?

Well, in order to answer that question, we have to determine what the Trustees’ job actually is. Remember, a trust is a relationship where the trustees hold certain property for the benefit of the beneficiaries, or, in this case, to carry out a purpose. Thus, it is important to establish the terms on which the trustees are holding property, and, more specifically, how and when they can specifically use or distribute the property.

For traditional trusts that have human beneficiaries, estate planning practitioners often use the “HEMS” standard. In a more standard trust, a trustee usually holds the trust property for a beneficiary until the beneficiary attains a certain age (18, 25, 30 years old etc.), at which point the trustee is to transfer the trust property to the beneficiary. However, the trustee is usually able to make distributions from the trust property to the beneficiary (i.e. give money to the beneficiary) at any time before the beneficiary attains that age. They are usually limited to doing this only for the purposes of that beneficiary’s health, education, maintenance and support. For instance, a beneficiary may require additional funds to pursue an educational program, or because they need medication for a certain health condition that they have. These would be examples of when a trustee could distribute trust property to the beneficiary under the HEMS standard.

While we confirmed in Part I of this blog series that the villagers on one’s island, as adorable as they may be, are not beneficiaries, they do have qualities akin to beneficiaries; thus, it doesn’t seem too farfetched to mandate the trustees of this trust to apply the HEMS standard to the villagers. After all, villagers do get sick, and will require medicine from time to time. Villagers, like most people, also need love and attention; thus, the testator could make sure that the trustees are able to make distributions to villagers to buy them clothes, send them gifts etc. The HEMS standard is also conceivably applicable to the island itself: the trustees could make distributions to ensure that all of the island’s facilities are up and running (i.e. the Town Hall, the Able Sisters’ shop, etc.), to ensure that the island is renovated to be more accessible to villagers (i.e. with bridges, stairs, paved roads etc.), and to generally ensure that the island is running smoothly.

But while “health” and “education” may be fairly straightforward to evaluate on an objective standard, who decides what constitutes the “maintenance” and “support”? Often, the trustees are the ones who have the discretion to make these types of decisions. But, in accordance with some of the specific examples mentioned above, the testator may wish to put specific trust terms in their will. For example, the trustees may have to purchase a gift for each villager at least once a month. Or, the trustees may need to use trust property to ensure that a certain percentage of the island’s trees are fruit-bearing, and that there is sufficient biodiversity among the fruits. If the testator decides to put such specific directions in the trust terms, then the trustees will be obligated to follow them.

Okay, So Really, How Do We Know That the Trustees Are Doing Their Job Properly?

At this point, you may be asking: “well how will I know that the Trustees are complying with the trust terms that I put in my will”? As we saw in Part I of this blog series, the villagers of one’s island are unable to go to court to enforce their rights as beneficiaries (and even if they were able, they probably couldn’t handle the stress of going to court anyway). For a trust like this, it may be prudent for a testator to appoint a protector.

A protector’s job is—as the name suggests—to protect the trust assets and ensure that the trustees are complying with the terms of the trust. The protector does not have title to the trust property, and cannot make trust distributions. Rather, the protector can make court claims against the trustees if they are not doing their job correctly. Note, however, that the role of the protector can have legal and tax implications and must be introduced cautiously.

Just like with an agent, the protector should be someone who is familiar with Animal Crossing: New Horizons, and can actually play the game to understand if the trustees are using the trust property in accordance with the terms of the trust. To do this, a testator may want to put in their will that the protector is to have access to their copy of the game at regular intervals (i.e., once a month or once every quarter). If the testator is to use a protector, it would be best to ensure that the trustees and protector are at arm’s length from one another (i.e. they don’t have any pre-existing relationship with each other).

If the protector determines that the trustees are running afoul of their duties, then they can request the trustees modify their conduct with respect to the trust. If the trustees still are not complying with the terms of the trust, then the protector may have to bring a court action against them (Animal Crossing is serious business, after all).

Duties of Trustees

Before a protector evaluates how well the trustees are fulfilling their duties, it is important for him or her to understand what exactly those duties are. The common law has developed several core duties of trustees, and we’ll briefly take a look at them.

The Duty to Comply with the Terms of the Trust

This duty is fairly straightforward. The trustees are obligated to deal with the trust property in accordance with the terms of the trust and cannot derogate from those terms. And even if the terms of the trust allow for certain decisions to be made in accordance with their own discretion, a trustee’s discretion must not be exercised with mala fides (bad faith); this is discussed further in “The Duty of Loyalty”, below.

The Duty of Care

Trustees owe a duty to take reasonable care in the management of the trust property. What does “reasonable care” mean? According to the Supreme Court of Canada, the standard of reasonable care is “that of a person of ordinary prudence in managing his or her own affairs.”[1] Of course, this is a mixed question of fact and law, and every situation is different when evaluating what constitutes reasonable care.

Interestingly, would that same standard exist for this kind of trust? Can it really be said that an Animal Crossing: New Horizons player is a “person of ordinary prudence”? I would like to think that us Animal Crossing fans are a special subset of humankind. Seriously, though, for this kind of trust, it may be important to determine that the trustees are held to a standard of care not of a “person of ordinary prudence”, but of an “Animal Crossing player of ordinary prudence”. The difference is important, as the average person probably would not know enough about the game in order to play it properly.

The Duty Not to Delegate

Generally, trustees are supposed to carry out the majority of their functions as trustees in their own capacity, and not delegate their jobs to others (that is why they are the trustees after all). However, there are several exceptions to this general premise, one being that if the trust terms allow for delegation, then the trustees may do so. As we discussed in Part II of this blog series, a delegation of certain roles to an agent may be crucial for the trustees, so the will should definitely allow for the ability to delegate.

The Duty of Impartiality (or the Duty of “Even-Handedness”)

The general principle of the duty of impartiality (the “even-hand rule”) is that the trustees are to treat all the beneficiaries fairly and not favour any one or more beneficiaries over others. The rules surrounding this duty become complicated when some beneficiaries are entitled to the income from trust property (i.e. dividends from shares which the trust holds), and some are entitled to the capital from trust property (i.e. the cash value of such shares), or in similar scenarios.

Again, there would technically not be beneficiaries of this kind of trust, as it would be a non-charitable purpose trust. However, it may be the case where the settlor wants the trustees to treat all of the villagers fairly. Then again, it may also be the case where Rodney the hamster has been particularly annoying and isn’t as deserving of gifts as the other villagers. In any event, the testator should address this duty (or lack thereof) in the will.

The Duty of Loyalty

Essentially, the duty of loyalty means that the trustees must administer the trust property in accordance with the best interests of the beneficiaries, and not for anyone else’s benefit (including the trustees themselves). This principle should be applicable to a purpose trust as well. Naturally, this would mean that the trustees also have a duty not to be involved in any conflicts of interest, as well as not to consider any factors outside of what would be the best interests of the beneficiaries when exercising their discretion.

For example, a trustee, if they are an Animal Crossing: New Horizons player, should not be taking things from the testator’s island to bring to their own island, unless the trust terms specifically allow for that as a form of compensation for their work. So, before you appoint that friend of yours who would stop at nothing to ensure that their island is a perfect 1:1 recreation of Hogwarts from the Harry Potter franchise, you should definitely reflect upon whether or not their obsession would come before their duty as your trustee.

The Duty to Provide Information

This duty has been more recently established, and is still developing. Essentially, trustees have a duty to provide three types of information to beneficiaries: information as to the existence of the trust, trust accounts and information concerning the exercise of trustee discretion. As nice as it would be to give this information to the villagers using the in-game mail system, it would probably be best to provide this information to the protector. The trust terms should also specify if there is any additional information that the trustees are to disclose.

Trustee Powers and Restrictions on Those Powers

Trustees not only have duties, but powers to manage the trust property. Some of those powers include:

  • the power to sell trust property;
  • the power to invest trust property;
  • the power to lease land;
  • the power to compound debts and liabilities and to settle claims as they see fit; and
  • the power to dispose of trust property to a beneficiary in a number of different ways (i.e. in installments, from the capital of the trust property, etc.).

There are many ways in which these powers could be applicable to both the real world trust property and the virtual trust property. While real property (i.e. real estate) probably wouldn’t be part of the trust property, one could consider the island to be “virtual real property”. It may be the case where a trustee can lease a part of their island to another player (perhaps as a fun vacation spot). The possibilities are definitely there.

However, for a trust like this, it seems it would also be important to restrict trustee powers. For example, it may be the case where the trustees should not sell certain trust property (like certain rare pieces of furniture). The trust terms should make this clear.

A Final Consideration – The End of the Trust

The last, and perhaps most important thing to note is that under the Ontario Perpetuities Act, a non-charitable purpose trust is valid only for 21 years, at which point the trust must be wound up and the trust property distributed. Subsection 16(2) of the Perpetuities Act dictates that the settlor/testator, or their “successors”, would be entitled to the trust property upon the wind-up.

Keeping this in mind, it would be prudent to specify who is to receive the trust property at the end of the 21-year period, otherwise it would go to whoever is named in the will to receive the residue of the estate (i.e. all of the property that is left over after specific gifts of property are given and debts and taxes are paid). The testator could then include a precatory wish that whoever is to receive the trust property use it as if they were carrying out the terms of the trust, but such a wish would not be legally binding. Note also that since there would be a “remainder” beneficiary once the trust is wound up, that remainder beneficiary would also have legal standing to ensure that the trustees are doing their jobs correctly (i.e. not using the trust property for any improper purpose).

Phew. Even if all of that was across three blog posts, that was a lot of information. You know, considering that Nintendo typically releases games in the Animal Crossing franchise every 3-7 years, it may very well be possible that one or more Animal Crossing games come out between the death of the testator and then end of the 21-year term of the trust. The testator could include a further wish and desire that whoever receives the trust property recreates their island in these future iterations in the Animal Crossing franchise.

On a truly final note, one of the wonderful things about the Animal Crossing games is that they really enable players to exercise their creativity when building their villages, towns and/or islands. I believe that one can exercise a similar amount of creativity in their estate planning, and I look forward to the day when I’m asked to assist with putting together this kind of trust.


[1] Fales v Canada Permanent Trust Co (1976), [1976] SCJ No. 72 at para 32, [1977] 2 SCR 302.

About Demetre Vasilounis
Demetre is an associate in the Private Client Services group of Fasken’s Toronto office. He has a broad trusts and estates practice and has developed and implemented cohesive succession plans for clients involving a wide range of different family and corporate structures. He has also advised on a breadth of family wealth planning matters, including tax issues, estate freezes, cross-border and international estates, probate planning, disability planning, charitable gifting, asset protection strategies, personal privacy, intellectual property and domestic contracts. Demetre regularly speaks and writes about various legal issues in succession planning, including in particular the evolving area of digital assets in estate planning. His work has been cited by the Ontario Superior Court of Justice and he has spoken at both national and international events. Demetre has obtained the prestigious Trust and Estate Practitioner (TEP) designation from the Society of Trusts and Estates Practitioners (STEP). While Demetre assists many families with navigating these areas, he is also experienced in helping individual entrepreneurs and business owners, philanthropists, athletes, artists, authors, entertainers, social media influencers and various types of professionals.


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