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Are Executors Invincible?
Date: 28/11/2023 Type: Articles Topic: Private Client | Investment and HNWI’s |An executor of a will is appointed by the deceased to carry out their last wishes. Executors could therefore be forgiven for assuming that the logical extension of this is that beneficiaries should not interfere with them getting on with their job. After all, it is a fairly thankless task – most executors are not paid for their time and it can take months to administer even the smallest of estates.
But this can put beneficiaries at a disadvantage if their inheritance is in the hands of someone they regard as an incompetent executor. In certain circumstances the beneficiaries may wish to remove the executor but, unfortunately for the beneficiaries, the law is largely on the executor’s side – a disgruntled beneficiary must have strong grounds to succeed in an application for an executor’s removal. Everyday gripes are insufficient; the beneficiary must prove that the executor is unfit for office.
This high standard of evidence means that removal claims are not especially common but several cases have been through the courts in the last year or so, including one brought by beneficiaries against solicitors acting for an executor.
Totton v Totton [2022] EWHC 2916 (Ch)
Totton v Totton is a cautionary tale for executors who take no action to administer the estate.
The executor failed to respond to the beneficiaries’ repeated requests for information about the estate. Even when the court eventually ordered the executor to provide a full inventory and swear an affidavit setting out how he had administered the estate, he failed to comply.
The beneficiaries therefore applied for a committal order. This was granted on the basis that the executor was in contempt of court as he knew that he was in breach of the order but took no steps to remedy this or to engage with the beneficiaries, their solicitors or the court process. He was given a three-month custodial sentence.
Pegler v McDonald [2022] EWHC 2405 (Ch)
In Pegler v McDonald, the estate administration was stalled by the executor (i) bringing two claims against the estate, both of which were dismissed as being totally without merit, (ii) intending to claim half the net proceeds of the sale of a property which formed part of the estate, as well as half the rental income from that property for a particular period and (iii) saying that he intended to challenge the will’s validity but failing to act on that intention.
The claimants applied to remove him. Their application was successful, largely thanks to his significant conflict of duty and interest. The court found that he was “incapable of acting as a disinterested, objective administrator” of the estate due to the claims he had brought or threatened to bring.
Gohil v Kumara [2023] EWHC 1809 (Ch)
In Gohil v Kumara, the claimant sought the removal of his co-executor, citing the considerable delay in the estate administration and the absence of an explanation for this. The claimant was unable to progress the administration himself as he did not have access to the documents and information required to apply for probate. His co-executor had not responded to his requests for this information. The court granted the application and appointed an independent professional executor in the co-executor’s place.
Kenig v Thomson Snell and Passmore [2023] EWHC 181 (SCCO)
Kenig is a claim by a beneficiary against solicitors instructed by an executor to carry out the estate administration.
A beneficiary sought an account of the firm’s fees under s71 of the Solicitors Act 1974 because they were much higher than the original estimate and the reasons for this had not been properly explained. The firm resisted the application, relying on Tim Martin Interiors Ltd v Akin Gump LLP [2011] EWCA Civ 1574 as the costs assessment was being sought by a third party – the beneficiary, rather than the executor as their client. In Akin Gump, the court had suggested that such ‘third party assessments’ were unavailable if the bills had already been approved and/or paid by the client, which they had in this situation.
At first instance, the costs judge found in favour of the beneficiary, considering that the limitations identified in Akin Gump do not apply to third party assessments brought in the context of trusts and estates. The court ordered that the solicitors’ costs be assessed.
However, the firm appealed, arguing that the lower court had misapplied Akin Gump and querying whether it should have been applied at all. The appeal was heard in October 2023 and the outcome is awaited.
Are executors invincible?
The above cases demonstrate that executors are not invincible in law. Even solicitor-executors or solicitors acting for executors are not immune from scrutiny – they must ensure that their costs are reasonable, even though the court said in Kenig that they do not necessarily have a duty to obtain the best value services.
However, these cases also show that the court is reluctant to take action against an executor unless there is no other option. Any delays in the estate administration must be extreme, and any failure to communicate with beneficiaries must be repeated and obstructive. As in Totton v Totton, it is helpful if the beneficiary can prove that the executor has been given numerous opportunities to remedy their (in)actions but has still failed to cooperate.
Executors also have a practical advantage in removal disputes. Beneficiaries may be daunted by the upfront energy and cost they must put into a challenge. Often it is the combination of numerous inadequacies that leads them to apply for removal, rather than one significant event. They might feel it will be too difficult to gather all of this together as evidence in a claim and reluctantly decide that continuing with the executor in place is the lesser of two evils.
At the end of the day, an executor has been chosen by the deceased who must have considered they were capable of carrying out the duties involved in the role. The vast majority of them do so satisfactorily.
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Author
Judith Swinhoe-Standen - Stewarts
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