An Executors’ Guide – Challenges when dealing with an Estate and how to deal with them
Being appointed as an executor is a great honour. The testator (the person who made the will) trusted you implicitly to carry out their final wishes. However, it is often under estimated how much responsibility the position holds, and for some executors they can feel like they have been handed a poisoned chalice.
According to a Co-Op 2018 study, 27% of executors found the role stressful and 20% found the experience upsetting.
Executors come in all different shapes and sizes from family members to accountants and solicitors. No matter what your background is, for each person taking on the role their experiences can be very different because each estate is unique.
So, what challenges could you face as an executor and how might you deal with them?
What are the Beneficiaries entitled to know?
You may be in a situation where you are struggling to manage the beneficiaries’ demands and expectations. They might be regularly contacting you for updates or want you to send them various documents in relation to the estate. Communication is key in these circumstances, and it is important to find the right balance between making sure the beneficiaries don’t feel left in the dark, but also knowing that you are not duty bound to pander to their every request.
It is quite common for beneficiaries to want to see the will. It is at your discretion whether you disclose it to them – It is common practice for the residuary beneficiaries to see a copy. A residuary beneficiary is someone who is given the remainder of the estate once all the debts, legacies and other expenses have been paid.
The will would not usually be seen by anyone who is not named on it. Once you have extracted the Grant of Probate the will becomes a public document and anyone can request a copy by doing a Standing Search.
Only residuary beneficiaries are entitled to see a copy of the estate accounts but there are some exceptions to this rule. If a request to see the accounts has been made then you should disclose these within a reasonable time period.
Sometimes beneficiaries want to see more detailed documents like the Deceased’s bank statements or pension documentation. Strictly speaking a beneficiary has no entitlement as of right to such documentation – it is at your discretion whether to disclose any requested information.
If you do receive a request for information/documentation you should usually consider the following in deciding whether to allow the request:
- The nature of the beneficiary’s interest
- The information the beneficiary is requesting
- The reasons for the request for information
- Whether the information may be confidential (e.g. Relevant to one beneficiary but not another)
- The cost to the estate of providing the information.
If beneficiaries feel as though vital information is being withheld from them, they can make an application to the Probate Registry for an inventory and account. If this type of application has been made then you should seek legal advice.
A challenge to the Will has been made
There are several ways people can challenge a will. The two most common are bringing a claim under the Inheritance (Provision for Family and Dependants) Act 1975 or challenging the validity of the will.
If someone is challenging the validity of a will then they may apply for a Caveat to be placed on the estate which will prevent you from taking out a Grant of Probate if you had not already done so. A Caveat remains in place for 6 months but there are steps you can take to remove it.
It is important as the executor that you take a neutral stance in any claims been brought.
If someone has put you on notice they are going to bring any sort of claim against the estate then the estate administration process should be put on hold.
If someone has issued proceedings against the estate you will be named as one of the defendants in your capacity as executor. However, this still means you should continue to take a neutral stance and preserve the estate to the best of your ability. If you don’t, you can run the risk of a costs order being made against you personally.
It can get complicated if you are an executor and a beneficiary. This situation is quite common. If a claim is being brought then you will have two hats to wear – your neutral executor hat and your beneficiary hat. Only in your capacity as a beneficiary you are entitled to defend any claims that have been brought. You should seek independent legal advice if you find yourself in this situation.
A conflict of interest may arise as it did in the recent case of Heath v Heath. Timothy Heath was an executor and beneficiary of his late mother’s estate, Rachel Heath. In her last will Rachel left her substantial estate to her 3 sons equally. Tim brought a claim under the Inheritance Act and said he deserved more because he had looked after his mum for many years. Tim’s two brothers made a claim against him to have him removed as executor. The brothers were successful and an independent solicitor was appointed. Although this decision was unusual, the Court thought there was a conflict of interest because Tim was responsible for administering an estate in accordance with his late mother’s will which he didn’t agree with.
My decisions are being scrutinised by the beneficiaries – what should I do?
It’s tough being an executor – you will have to make several difficult decisions during the administration process which don’t always go down very well with some of the beneficiaries. You may want to take the beneficiaries views into account but it is not compulsory that they sign off every decision. What is important is that you can justify you are acting in the best interests of the estate at all times.
The most common dispute that can arise is selling the family home, especially if someone is living in it, or one of the beneficiaries wants to buy the others out. There are all sorts of arguments that can crop up, such as payments of notional rent and accusations of selling the property at an under value.
If the beneficiaries feel as though you have not been administering the estate appropriately, they may bring a claim against you personally, not the estate, and ask for the estate to be restored. There are several types of claims that can be made. One example of this could be selling property in the estate at an undervalue or failing to dispose of wasting assets before they lose value – this is known as Devastavit which is ‘mismanagement of the estate’.
You should seek independent legal advice if these types of accusations are being made against you.
The beneficiaries have made an application to remove me as Executor
If a beneficiary believes that the estate is not being properly administered then it is possible for them to apply to the court to substitute or remove you as an executor.
Most applications to remove or substitute an executor are made under s. 50 Administration of Justice Act 1985 which usually deals with the removal of executors after the Grant of Probate but applications can be made beforehand.
Generally speaking, it is difficult to remove an executor. The court will only consider it if it is in the interest of the proper administration of the estate and would promote the welfare of the beneficiaries, which will depend upon the relevant facts of each case.
If an application has been made to remove you as executor then you will need to seek independent legal advice.
My expenses are being challenged by the beneficiaries
In the recent case of Mussell v Patience, the Court ruled that an executor who receives and pays for legal advice during the administration of an estate only needs to show that the estate’s money has been spent on ‘proper estate business’.
In this case the judge said that an executor is entitled to pay expenses from the estate provided he can show:
- That the sum concerned was indeed spent, and
- That it was spent in the fair execution of the estate administration.
As an executor you should be able to show this by giving a receipt or invoice that is related to the estate’s administration. However, the receipt or invoice need not provide a detailed breakdown of the total charged.