An issue that leads to a growing incidence of court battles is in the area of executor disputes.
When someone passes away, they will typically have a will. When someone has a will, they must nominate executors. Executors of an estate have an obligation to engage in the due administration of the estate. Enormous obligations are cast upon an executor to gather in the estate, pay all testamentary debts and expenses and to distribute the estate in a correct and legal way.
Probate is process of managing the estate and assets of a deceased person. A grant of probate is an order of the court that the executor named in the deceased person’s will is entitled to administer the estate. A grant of probate is also the court’s official recognition that the will is valid under the law.
Executor Disputes: The Executor
When a will maker passes away and you are nominated executor, you should immediately contact any other executors in order to understand and begin following the instructions within the will. However, on occasion the other executors have passed away and you will therefore have to present a death certificate to court. Executors have the option to either accept the duties of an executor or decline. You can complete and sign a form asking for your role as executor to be renounced. You may find that other executors are not following instructions or fulfilling what is stated in the will, at which time you can apply to court for a grant probate. This means that only you will be allowed access to the will.
After a Grant of Probate is obtained, the executors are bound to gather in the estate. This term means that the assets owned by the deceased person must be placed in the legal name of the estate. For example, a bank account owned by John Smith would be placed in the name of the executor on behalf of the estate of John Smith.
As part of the administration of the estate, it may be necessary to sell assets so that all debts and estate expenses may be paid. In some cases, it is very unhelpful for assets to be sold as part of the administration of the estate and it may be more helpful for them to be kept intact and appropriated to beneficiaries as part of their inheritance.
There may be confusion as to which parts of the estate are to be used for the payment of debts and expenses.
An executor may discover that a deceased person failed to keep up to date with their taxes or erroneously made a claim on social security. In both of these examples the executor is bound to discharge the obligations of the estate in paying all taxes that ought to be paid. If the executor fails to do this, the executor will be personally liable. Similarly, with regard to social security that ought not have been claimed, it will be necessary for the executor to negotiate with the relevant government department concerning a refund of the overpaid social security or a release.
The administration of the estate may include defending a family provision claim or other estate litigation. It may also mean enforcing the rights of the deceased, such as seeking to set aside gifts and other transfers that the deceased made due to undue influence or a deterioration in capacity.
The administration of an estate is often complex, and should always be done in conjunction with sound legal advice.
It’s important to remember that failure to administer the estate appropriately may result in the executor being personally liable for their oversights.
In summary, the basic duties of the executor can include:
- the arrangements of the funeral
- locating the will
- applying for a grant of probate
- protecting the assets within the estate
- finalising debt repayments
- the distributions of assets
Legal Action in Regards to the Will
Executor disputes can also arise if beneficaries believe that the executor is not following their duties.
The executor may make decisions that cause damages to the estate or they may fail to fulfil their obligations. In this case, the court can make the executor pay for their mistakes or hold the executor personally liable. In extreme cases, the executor may have to sell or use their own assets to help fix the damages.
Sometimes executor disputes can arise simply due to the interpretation of the will. An executor may find errors in the will or ambiguity around certain parts of the will.
The wording of the will could contain an administrative error on the part of the solicitor who prepared the Will. In this instance, the executor will need to prepare an application to the court for the will to be rectified so that it more accurately reflects the instructions given to the solicitor.
Sometimes the words used in a will are ambiguous and are capable of a number of different meanings. In this case, it is necessary to request the court to find meaning in the words (called a construction application). It is not up to the executor or a solicitor to make this decision. In the absence of a construction application, an executor will continue to be exposed in acting under what the executor sees as the preferred construction of the Will. In such an example the executor would be personally liable.
Being an executor can be extremely difficult, and there are many steps that must be taken to ensure that the will has been correctly administered. If you need help in appointing an executor, or you’ve been appointed an executor, make sure you seek specialist legal advice. Executor disputes often end up in court, but they don’t have to – early intervention can save all parties time and money.
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