As the cost of care continues to rise in the UK many people are seeking ways to protect their assets from being ravaged by care costs in later life. With the threat of looming care fees many people are tempted to gift away their assets to family members so...
Common Problems with Estate Administration
While most executors act properly during the administration of an estate, problems can and do occur. Common issues range from simple delays and poor communication to serious misconduct like fraud or breach of fiduciary duty. When problems arise it can cause stress and frustration for beneficiaries. LBMW specialises in resolving these disputes and helping beneficiaries protect and exercise their rights when executors fail to fulfil their duties.
Executor Delays and Lack of Communication
Estate administration typically takes at least 9-12 months and delays are not uncommon due to the complexity of gathering assets, tax issues and disputes. However, problems can occur when executors cause unreasonable delay in administering estates or fail to keep beneficiaries informed, through negligence or an unwillingness to act.
Beneficiaries have the right to request progress updates and residuary beneficiaries have a right to see estate accounts. Similarly, executors are under a duty to respond to reasonable requests for information. Where an executor is silent or evasive, it may indicate deeper problems with the estate administration.
Executor Refusing to Provide Estate Accounts
Executors are under a legal obligation to keep proper estate accounts and provide them to residuary beneficiaries upon request. Estate accounts should include a full record of assets, liabilities, income, expenses and distributions.
Some executors may refuse to provide accounts, or delay providing them. Such refusal or delay may be for innocent reasons like inexperience or lack of knowledge of their duties as an executor, but a lack of transparency may also be because the executor is trying to hide their misconduct.
A residuary beneficiary can apply to court to compel an executor to provide accounts if they are refusing to do so.
Executor Misconduct and Breach of Duty
Executors have a fiduciary duty to the beneficiaries of the estate and a high standard of care is expected from them. Executors may be in breach of their duties for negligence, fraud or misappropriation of estate funds if they:
- sell property below market value (especially to themselves or connected parties)
- favour one beneficiary over others
- use estate funds for personal benefit
- fail to collect debts owed to the estate
- make unauthorised distributions
- make poor investment decisions.
Executors can be held personally liable for losses caused by their misconduct and should take professional advice, particularly in relation to possible conflicts of interest.
Disputes Between Joint Executors
Problems may arise when multiple executors cannot agree or cooperate. The default position is that joint executors must act unanimously unless the will states otherwise. However, situations may arise where one executor is not participating, where executors have fundamental disagreements about estate administration, or where one executor suspects another of misconduct. Disputes between executors create practical difficulties for beneficiaries as it tends to delay estate administration and beneficiaries may not receive clear information. An application can be made for the court to intervene if a deadlock is reached. Options to resolve a dispute can include one executor stepping down, court directions, or the removal of an executor.
When an Executor Refuses to Act or Renounces
Executors named in a will may not want to take on the role or may start but then wish to step down from it. Renouncing before taking on the role is a relatively straightforward process, whereas stepping down at a later stage is more complicated. An executor who starts administering the estate may be deemed to have intermeddled and thereby accepted responsibility. It is not possible to renounce after the grant of probate and instead an application must be made to the court for revocation of the grant.
Where an executor refuses to act, the beneficiaries may apply for a “citation” to force an executor either to make progress with the estate administration or lose the right to act.
Removing an Executor
If an executor is not fulfilling their duties properly, an application can be made under an application to the court under section 50 of the Administration of Justice Act 1985 to remove them from the role and appoint someone to act in their place. Removal is a serious step but may be justified on certain grounds including misconduct, conflicts of interest, inability to act, unreasonable delay, breakdown in trust or being otherwise unsuitable for the role. Evidence will be needed to support a removal application. The court will use its discretion and consider what is in the estate’s best interests.
Alternatives to removal of an executor include appointing an additional executor or obtaining court directions in the event of a dispute.
Beneficiaries’ Rights and Remedies
Beneficiaries have rights during the estate administration, including to receive their inheritance within a reasonable timeframe and to challenge executor decisions. Residuary beneficiaries also have the right to see the estate accounts. Beneficiaries can exercise these rights by requesting the estate accounts, applying to the court for directions, seeking removal of an executor, claiming against an executor for losses caused by breach of duty, and obtaining injunctions to prevent improper actions.
It is important for beneficiaries to act promptly as delay can affect the remedies available to them. However, beneficiaries should consider alternative dispute resolution options including mediation before issuing court proceedings.
Preventing Probate or Protecting Your Position
Beneficiaries can take protective steps if they are concerned about the estate administration, including by entering a caveat at the Probate Registry. A caveat prevents a grant of probate being issued without notice being given. A beneficiary may want to stop or delay probate if they suspect fraud, or have concerns about the validity of a will validity, or the suitability of an executor. The delay caused by a caveat can allow time to gather evidence of misconduct or problems.
How LBMW Solicitors Can Help
LBMW has a depth of experience in contentious probate matters and an understanding of both the legal and emotional aspects of estate administration disputes. We can advise beneficiaries on their rights, negotiate with executors and their solicitors, and issue court proceedings to remove executors or pursue claims for breach of duty. LBMW always aims to resolve disputes efficiently, whether through negotiation, mediation, or court proceedings.
It is essential to obtain early legal advice when problems arise in estate administration. Please contact us for an initial consultation if you have any concerns or are seeking advice.
FAQs
How long should estate administration take?
Timeframes vary significantly but straightforward estates can be administered in 9-12 months, while complex ones may take much longer.
Can I force an executor to provide estate accounts?
Residuary beneficiaries have a right to request accounts and executors have a duty to provide them. If an executor refuses such a request, an application can be made to the court.
What can I do if the executor is not doing their job properly?
The first step would be to make a formal complaint to the executor, but if necessary an application can be made to the court to request directions, apply for removal, or claim damages for breach of duty if their actions have caused the beneficiaries a loss.
How do I remove an executor who is not acting properly?
An application can be made to the court where there are strong grounds for removal and there is sufficient evidence.
What happens if joint executors cannot agree?
Executors are expected to act unanimously but if a deadlock is reached then an application can be made to the court for directions or to remove an executor. To avoid court, one executor may consider stepping down.
Can an executor be held personally liable for mistakes?
Executors can be held personal liable for breach of their duties, particularly for negligence or fraud. If an executor has made an honest mistake in good faith they may have some protection from liability.
What are my rights as a beneficiary during estate administration?
Beneficiaries have rights including the right to receive their inheritance within a reasonable time, the right to proper administration of the trust according to its terms and the right to hold trustees accountable for breaches of duty. Residuary beneficiaries have the right to see the estate accounts.
How much does it cost to challenge an executor?
The costs of challenging an executor vary widely depending on the nature and complexity of the challenge. In some cases, the costs of a challenge may be payable from the estate. It is important to obtain early legal advice to assess the viability of any challenge.
