Executors play a pivotal role in carrying out the wishes of the deceased and administering the estate.
Being the executor of a Will carries with it various responsibilities which include (amongst other things) applying for a grant of probate; identifying and valuing assets; settling debts and distributing the estate.
In most cases executors will carry out this role diligently and without complaint but executors are often carrying out their role in circumstances where emotions run high and it is sadly not uncommon for friction between executors and beneficiaries to quickly escalate.
The reasons giving rise to a dispute can be varied and, many common reasons, can include:-
- Alleged conflicts of interest;
- Failure to progress the administration quickly enough;
- Mismanagement or misuse of estate assets;
- Lack of capacity or ability to carry out the role;
- A breakdown in relations that prevents the estate from being administered effectively.
In circumstances where a dispute has arisen to a point that that it is unlikely to be resolved then, under section 50 of the Administration of Justice Act 1985, the Court has discretion to remove or substitute an executor.
In deciding whether an executor should be removed from office the overriding objective of the Court will be to look at whether the estate is being properly administered and the welfare of the beneficiaries.
As Chief Master Marsh articulated in Harris v Earwicker:
"It is unnecessary for the court to find wrongdoing or fault on the part of the personal representatives. The guiding principle is whether the administration of the estate is being carried out properly. Put another way, when looking at the welfare of the beneficiaries, is it in their best interests to replace one or more of the personal representatives?"
The recent decision of Dorothy House & Anor v Anne Elizabeth & Anor is illustrative of the exercise the Courts will undertake when faced with the issue of whether a personal representative should be removed or not.
The Claim
The Defendants to the claim (Anne Helme and Daniel Jones) had been appointed the executors of the estate of the late Mary Organ. Mary died in December 2017 unmarried and with no children. Daniel was Mary's first cousin once removed.
Mary's Will included a number of pecuniary legacies which included a gift to Daniel of £100,000, £10,000 to her maternal uncle, Ivor, as well as several others. The total value of the estate at the date of death was in excess of £3,000,000.
Although Mary died in December 2017 the executors did not become aware of her death until some time after in January 2018.
Upon becoming aware of her death the executors did not inform the Claimants at the time and various other complaints were made against the Defendants in their dealings with the estate (a total of eight were made) which included complaints that:
- the executors only notified the Claimants of their interest under the Will in August 2020;
- there were delays in the administration of the estate;
- there was a lack of oversight of work done in relation to a farm by the second Defendant and his wife;
- there had been the acceleration of sale of estate property by the executors after the Claimants had filed an application for an injunction.
The Court considered whether there was any merit in the complaints raised and considered that overall (save for one complaint) there was substance in all the complaints and accordingly ordered their removal as executors of the Will.
But what about Costs?
The general position is that executors are entitled to an indemnity out of the estate for expenses properly incurred when acting on behalf of the estate. The Court found that, on the facts of this case, the litigation had been entered into and conducted by the executors on their own behalf and not that of the estate.
Even if the Court had been wrong about this the Court would have found they should be deprived of their indemnity given their conduct in the administration of the estate.
Not only this, but having regard to the way the Defendants conducted the litigation, not only were they deprived of any indemnity out of the estate but the Court found they were required to pay costs on the indemnity basis.
Take Away
Although the executors were removed in this case and ordered to pay costs, for those looking to remove an executor, this case should be not viewed as opening the floodgates. For those looking to bring such an application it is important before applying to the Court to try to keep the temperature down and to ask yourself: is the administration (or lack thereof) of the estate at the forefront of the issues – too often disputes focus on personal animosity which are unlikely to be successful – and to build up a suite of evidence that supports your case.
On the other hand, for those on the receiving end of complaints about the administration of an estate this case should serve as a reminder that there is recourse should things go wrong. Where there are bona fide complaints that touch upon the administration of the estate the Courts are both able and willing to order your removal and do not assume that you can necessarily hide behind your indemnity.
How can we Help
If you are a beneficiary concerned about an executor's conduct — or an executor facing challenges in carrying out your role — early legal advice is essential to understand your position and to avoid the matter escalating.
If you require any advice (as either executor or beneficiary) please do not hesitate to contact Mr Adam Palmer on adam.palmer@colmancoyle.com.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
