How to deal with a problematic personal representative
What steps should be considered if a dispute arises?
In a perfect world, those appointed and tasked with administering an estate (personal representatives) will do so without controversy. In reality, that does not always transpire and there may be circumstances in which a party wants to explore the options available to them in respect of a personal representative who is causing concern.
Why might a dispute arise?
A PR (personal representative) is required to collect and get in the estate of the deceased, administer it according to law and (when required to do so) exhibit on oath a full inventory and account.
On the face of it, these duties and responsibilities seem straightforward enough. They are, however, broad, and this lends itself to a multitude of potential instances of disagreement between PRs and beneficiaries which may ultimately require court determination.
Some examples where disputes may arise are:
- the interpretation of a will;
- the quantification of the beneficial interest of a beneficiary/proposed beneficiary;
- a claim made by a creditor of the estate;
- the payment of funds into court;
- the provision and verification of estate accounts;
- whether a PR should take, or should refrain from taking, a particular action;
- whether a particular transaction involving estate assets should take place; and
- the administration of the estate more generally.
What steps should a concerned personal representative or beneficiary consider if a dispute arises?
Beneficiaries and PRs alike need to carefully consider their position, with the benefit of early legal advice, prior to taking any formal steps in response to a potential administration dispute. With support and guidance many issues can be resolved through correspondence or settlement discussions, possibly through using out of court mechanisms such as mediation.
Sometimes that is not possible and there are issues which may be difficult to resolve, requiring a court determination. As with all litigation, there are advantages, disadvantages and risks which the parties need to be aware of before commencing an action.
What happens if a personal representative delays the administration of an estate?
The citation process can force a person who has the right to obtain a Grant of Representation to take action in order to progress the administration of an estate. A citation is a notice in writing issued by a district judge or probate registrar.
This can compel a PR to take probate or, if they fail to do so, provide for an alternative person to accept or refuse to obtain the Grant.
What other options are available?
Inventory and account
If the only area of dispute between a beneficiary and a PR is in relation to estate finances, a beneficiary can seek to obtain greater transparency through the PR’s presentation of the estate accounts. If a beneficiary has exhausted all avenues to obtain the accounts from a PR, an application can be brought using section 25 of the Administration of Estates Act 1925. An order can be made requiring the PR to provide a full inventory of the estate and render an account of the administration of the estate to the court. Non-compliance with an order can ultimately result in committal proceedings, so a PR is well advised to comply and deliver up in accordance with the order.
Removal of personal representatives
There may be circumstances where PRs need to be removed. They may want to stand down voluntarily, or alternatively the conduct of the PRs has been so questionable, or the relationship between the parties has become so toxic/irretrievably broken down, that it has become desirable or necessary to have the PRs removed. Depending on the circumstances, there are a number of potential options available.
Renunciation: A PR may voluntarily renounce their role and waive their right to obtain a Grant of Representation.
Removal: Renunciation is not always possible, for example when the PR is not willing to renounce, they have already obtained a Grant of Representation or they have intermeddled in the estate (i.e. already acted to show an intention to accept the role).
Two of the most common options available when removing a PR are under:
- Section 116 Senior Courts Act 1981, which provides the court with a broad discretion to appoint an alternative administrator in “special circumstances” and where it is necessary or expedient to do so. The court can take such steps even where the right to renounce has been lost due to intermeddling. However, S.116 can only be used where a Grant of Representation has not yet been extracted.
- Section 50 Administration of Justice Act 1985, which is not as limited as Section 116, in that it can be used long after the Grant has been obtained and the administration of the estate has been progressed.
What will the court consider when terminating the appointment of a personal representative?
There are a number of guiding principles to which the court will have regard:
- Whether it is in the beneficiaries’ best interests to replace the PR. There need not be a finding of any wrongdoing or fault on the part of the PR.
- Whether there is wrongdoing or fault which is likely to materially jeopardise the estate.
- The wishes of the deceased (as set out in the will) together with the wishes of the beneficiaries as a whole.
- Whether, in the absence of significant wrongdoing or fault, it has become impossible or difficult for the PRs to complete the administration of the estate.
- The additional cost of replacing a PR, given the size and nature of the estate.
Losses suffered by the estate/devastavit
In time, beneficiaries may become aware of losses being occasioned to the estate arising out of the actions or inaction of a PR. ‘Devastavit’ encompasses circumstances where there has been negligence, misappropriation of the estate assets or maladministration. Beneficiaries may wish to explore pursuing compensation in respect of any losses suffered during the course of the administration.
Recent case law
Pegler & Ors v McDonald & Anor
The Pegler case is a recent case highlighting the circumstances in which s.50 in particular can be invoked. HHJ Matthews delivered a robust judgment in holding that the executor was incapable of acting as an objective administrator. This was, amongst other things, due to the fact that the administrator wished to challenge the validity of the will, made a number of peculiar complaints against those involved in the estate (including to the police) and was subject to a civil restraint order after making four applications totally without merit. The executor was removed, deprived of his indemnity and ordered to pay the claimants’ costs personally.
Roberts v Conlin
Another high-profile case from 2022 was that of Roberts v Conlin, a case in which the deceased’s children failed to provide any accounts for over five years and were sued by their nieces and nephews.
Both defendants agreed that records had not been kept and money needed to be accounted for. The defendants had received significant sums, profited from their role as trustees, exposed the trust to fines and penalties and mismanaged trust property. The defendants blamed one another, though the first defendant agreed to be removed if the second defendant was also removed. The second defendant denied all allegations of wrongdoing and actively defended the claim.
It was held that there were serious issues as to the administration of the estate, potential claims against both defendants and that there was a clear conflict of interest, which necessitated the defendants’ removal.
It was held that as the first defendant had effectively been neutral, he was entitled to an indemnity in respect of his costs. However, the second defendant was held to have been the cause of the continuing litigation and was therefore ordered to pay costs of c.£90,000.
Whilst these cases are quite extreme examples of removals, it is a helpful reminder that recourse is available to beneficiaries and that those entrusted with the administration of an estate are under a strict duty to act in the best interests of the beneficiaries as a whole.
Beneficiaries and PRs need to carefully consider their respective positions, with the benefit of expert legal advice, if a dispute appears to be looming or if they have any questions concerning the extent of their duties and responsibilities and their roles more generally.
For further guidance on disputes relating to personal representatives or beneficiaries, contact our expert will dispute lawyers.