Estate and Trust Dispute Lawyers

Acting as an executor is not an easy task, and can take up a lot of time, which is not ideal, especially when grieving. So not only considering the below points, but also the personal implications when taking on such a responsibility is important.

Any executor that is appointed must have capacity to apply for a grant of probate. Capacity is in relation to an executor’s ability to act, in legal terms. An executor is unable to apply for a grant of probate if they:

• Are a minor
• Lacks mental capacity
• Are the former spouse of civil partner of the deceased
• Are bankrupt, insolvent, or in prison
• Are a non-trust corporation

Some executors with have different levels of authority, to deal with a deceased’s estate which will be indicated in the Will. The appointment may be either an absolute appointment, where there will be no conditions or restrictions as to when the executor may take up the appointment. Alternatively it may be a qualified appointment, where there can be limits as to when the appointment begins or ends, the assets which the executor can administer, and finally the place in which the appointment may be exercised.

The first step is relatively simple, and it is just to ask the executor/trustee for the information, where there is no need for the involvement of the court. If the trustees agree to provide the information, then usually the beneficiary will meet the cost of copying and sending the documents. However, if the trustees refuse, then a beneficiary can consider making an application to the Chancery Division (Part 8 claim for under CPR 64). This is an application for the determination of a question arising in the execution of a trust.

Who pays the costs for the latter application is at the discretion of the court, and a costs order will usually reflect the outcome of the application, meaning it could be the beneficiary (if unsuccessful), or the trustees (if the court discloses that they acted unreasonably) that pays the costs. Alternatively, the costs could also be payable out of the trust if it is considered appropriate.

An application to remove or substitute an executor/trustee can be made before a Grant of Probate has been issued. It can also be made after but would then have to be made to the High Court under Section 50 of the Administration of Justice Act 1985.

Overall, the executors are those responsible for taking action or making distribution from an Estate once the Grant of Probate has been obtained. However if they are not doing so, trustees and beneficiaries can apply to the courts to compel an executor to take action in regards to the Estate.

A personal representative of a Will typically has 12 months to properly administer an estate. However, sometimes an executor may not, therefore there are options and steps to encourage action to be taken. These include:

• Citation: A citation can force the person who has the right to obtain a Grant of Probate to take action in order to administer the estate.
• Citation to accept or refuse a Grant: Someone with a prior right to a grant does not take one but refuses to renounce. If the named executor is cited (evidenced) to citation their right to executorship will cease and the administration of the estate devolves as if they were never appointed.
• Citation to take probate: Where someone has intermeddled with the estate, but six months after the death has still failed to take a grant. They can then be compelled to take a grant in a specified time.
• Citation to propound Will: Method used where a person becomes aware that there may be a later Will that reduces their entitlement under an earlier Will or intestacy (person who has died without leaving a Will). This citation will direct the executors (in the later Will) to seek a Grant proving it, and where there is no response, then apply for an order of Grant as though it was invalid.

However, citation may not be appropriate if there a good reason for suspecting that the citation may delay the administration or may commit a devastavit (wasting of assets). In this circumstance, it may be deemed appropriate to apply to pass over the executor. 

There is no obligation to act as an executor. It is up the discretion of the person who has been named as the executor to renounce the position. However, if the executor who wishes to be removed has acted in any relation to the administration of the estate, then a court order will be required in order for their removal. Generally, this will be made to the High Court under section 50 of the Administration of Justice Act 1985.

However, if the executor has not acted in any of the practicalities of the estate, then renunciation will be made via a deed of renunciation and will need to be signed in the presence of witnesses to be lodged with the Probate Registry.

Furthermore, if a person has been named to act as an executor prior to the person’s death, then the above will not apply, and simply saying ‘no’ is applicable, as there is no formal legal procedure. But, if the Will has already been prepared, then the individual named must go back to the testator, and have that part changed, and ask them to name somebody else as an executor.

Typically, the ownership of the original Will lies with the law firm that has dealt with the client and/or who formed the original Will and on the Testator’s/Testatrix’s death the executors named in the Will. Most firms will hold it indefinitely unless there has been an agreement with the client prior to the date of their death.

Generally  a Will is a private document, but the executors named will have the right to see it. At their discretion, it cannot be shown to anybody else.

However, once a grant of probate has been issued, a Will becomes a public document, and copies can be obtained by persons other than the executor of the Will via a search from probate records for documents and wills on GOV.UK.

A beneficiary who has concerns about the actions of a Trustee will need to show that they have ‘acted in breach of their powers and duties under the trust’. However, it is not often that the decisions of a trustee will be challenged. It is more probable for the decision-making process itself to be.

The grounds that a Trustee can be legally challenged in court are as follows:

• The step taken following the Trustees’ decision was outside the scope of the Trustees’ powers.
• The Trustees’ decision was within the scope of their power, but they have committed a breach of trust in failing to giver proper consideration to relevant matters.
• The act was within the scope of the Trustees’ powers but was exercised for a purpose, or an intention, which was outside of the power being exercised.
• The Trustees had a conflict of interest in making the decision in question.
• The act was a result of a mistake by the Trustees (mistake of law or fact)

Executors can be held both financially and legally responsible for any mistakes made, even if they are in error. An Executor is personally responsible. The same applies to Trustees.

For example, if an executor is to distribute an estate which has outstanding debts without knowing they existed, the outstanding creditor can still bring action against the executor.

Trustees can be removed by the following means:

• Exercise of an express power under a trust instrument
• Exercise of the power conferred under section 36 of the Trustee Act 1925
• Exercise of the court’s jurisdiction under section 41 of the Trustee Act 1925
• Exercise of the court’s inherent jurisdiction.
• Compulsory retirement pursuant to a beneficiaries’ discretion under the Trusts of Land and Appointment of Trustees Act 1996.
• Replacement of trustees who lack mental capacity pursuant to beneficiaries’ direction under section 20

It should be noted that the Court has powers to remove executors that are distinct from those in the removal of a trustee. The court may exceptionally pass over an executor to make a Grant of Letters of Administration with Will annexed to another person.

However, for the order to be made, it is necessary that, there are ‘special circumstances’ and those circumstances make it necessary or expedient to pass over the person entitled to the grant.

An estate is insolvent when an 'estate’s assets are insufficient to meet the liabilities', meaning the total value is inadequate to pay its debts. The administration of such an estate will be governed by the Administration of Insolvent Estates of Deceased Persons Order 1986, which applies to the estates of those who die insolvent, including those who die after a bankruptcy petition has been presented.

The insolvent estate must be administered in one of three ways; by the personal representatives, pursuant to an administration action or pursuant to an insolvency administration order. See below for the consideration of each of the methods of administering an insolvent estate.

This will take place out-of-court and out-of-bankruptcy. However, it is important to note that the personal representatives must comply with the law of bankruptcy when dealing with the assets of the insolvent estate. This relates to the rights of secured and unsecured creditors, proof of debts, the valuation of future and contingent liabilities and lastly the priority of debts and other payments. Personal representatives do not have to be qualified insolvency practitioners but will have to obtain a grant of probate or letters of administration in the conventional sense. It is also key to note that when the insolvent estate is distributed, the ‘reasonable’ funeral, testamentary and administration expenses have priority over the preferential debts.

Such action is a claim brought by a creditor of the estate, for an insolvent estate to be administered under the court’s direction. The claim can also be brought by the personal representatives against a creditor. These claims are rare, as the courts are often reluctant to take on such role. However, if the claim is to go ahead, and the court has been satisfied that the estate is insolvent, they may order the administration of the estate to the bankruptcy court for the making of an insolvency administration order.

An insolvency administration order (IAO) may be made following the presentation of an insolvency administration petition. These are the equivalent of a bankruptcy order and a bankruptcy petition for a person who has died. Once an IAO has been made, the estate shall be administered in the same way as the estate of a living bankrupt.

If you do not agree that a Will is valid and believe there are grounds for contesting a Will then the first step to take is to ensure that a caveat is entered at the Probate Registry which would prevent a Grant of Probate being taken out. This would give you time to investigate the circumstances of the Will being prepared before a grant is provided which would allow the executor to administer the estate. It is important that a caveat is only entered in appropriate circumstances where you wish to contest the validity of a Will or there is a serious question as to who should apply for the Grant of Probate. If a caveat is entered for any other purpose, that may be an abuse of the procedure and there could be potential costs consequences.