Inheritance feuds: How do you navigate them as executor to a willYou might feel gratified to be asked by a friend or relative to be their ex
Inheritance feuds: How do you navigate them as executor to a will
You might feel gratified to be asked by a friend or relative to be their executor, and sort out their will. It’s only after they are gone that the trouble might start.
Feuds over inheritance are on the rise, according to official court figures, a trend lawyers put down to rising property prices and the intricacies of modern family life.
Samantha Hirst, a solicitor at Ridley & Hall and a specialist in will disputes, explains how executors can get embroiled in family drama and how best to avoid this – and, if necessary, fight back.
Being appointed as an executor is a great honour. 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 – many find the role stressful and upsetting.
Executors come in all different shapes and sizes, from family members and friends to accountants and solicitors, and each estate is unique. But there are some challenges that come up time and again, so how might you deal with them?
Hounded over the will: What are 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, but it is at your discretion whether you disclose it to them.
Samantha Hirst: As an executor, you are not duty bound to pander to every request
It is common practice to show a copy to residuary beneficiaries – those who are 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.
However, once you have been awarded probate, the stage at which executors gain control over an estate after someone dies, the will becomes a public document. Anyone can request a copy by doing a standing search.
Only residuary beneficiaries are entitled to see a copy of the estate accounts, which is a full summary of all the finances associated with a will, including the executors’ expenses.
There are some exceptions to this rule, such as parents and guardians of minor beneficiaries, or beneficiaries and creditors who cannot be paid because there is not enough money to do so.
If a legitimate 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 or documents, you should usually consider the following in deciding whether to allow it:
1) The nature of the beneficiary’s interest
2) The information the beneficiary is requesting
3) The reasons for the request for information
4) Whether the information may be confidential (for example, it’s relevant to one beneficiary but not another)
5) 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 feud breaks out: What if the will is challenged?
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, where someone feels they haven’t been provided for properly, 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 have not already done so.
Heath v Heath
A conflict of interest may arise as it did in this recent case.
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 three 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.
A caveat remains in place for six 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 are you entitled to defend any claims that have been brought, and in this situation you should seek legal advice.
Badgered over your decisions: How do you keep beneficiaries at bay?
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.
STEVE WEBB ANSWERS YOUR PENSION QUESTIONS
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 undervalue.
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 try to remove you as executor.
One example of this could be if the beneficiaries feel you sold the property in the estate at an undervalue, or failed to dispose of wasting assets before they lost value – this is known as ‘devastavit’ which means mismanagement of the estate.
Get legal advice if these types of accusations are being made against you.
Threats to oust an executor: How easily can they get rid of you?
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 section 50 of the Administration of Justice Act 1985.
This usually deals with the removal of executors after probate is granted, 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, which will depend on the circumstances of each case.
If an application has been made to remove you as executor, again, take legal advice.
Executor’s expenses are disputed: What are you allowed to spend money on?
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:
1) That the sum concerned was indeed spent, and
2) 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.
If you are caught up in litigation, a lot of executors are badly advised that their legal costs will come out of the estate – this is not guaranteed.
Executors and trustees can apply for a Beddoe Order, which if successful means your own costs, and those of the other side if you are ordered to pay them too, will be covered by the estate.
The task becomes overwhelming: Can you resign as executor?
If you find out you are an executor and do not want to take on the role then before the grant of probate has been taken out you can ‘renounce’ by signing a deed of renunciation.
Once this deed has been signed you have effectively stepped down and given up all your executor responsibilities.
If you have ‘intermeddled’ with the estate – such as dealt with aspects of the administration, like selling the deceased’s house before the grant of probate has been taken out – then you would not be able to renounce because you would be seen as already actively taking on the executor role.
As a general rule, if you are an executor and have already taken out the grant of probate then you would not be able to renounce.
You can apply to revoke a grant of probate but these applications are usually made because the will was invalid or that the grant of probate was improperly obtained.