Executors and administrators of an estate (together called Personal Representatives – PRs) have a duty in law to collect in the estate and administer it with reasonable care and skill. It is an important position which gives them a lot of power but with that comes a lot of responsibility.
If there is more than one PR then they have to act together in making decisions about the estate. If it is a complicated estate, or the PRs do not get along with each other it can also delay matters. Disagreements can also arise between PRs and beneficiaries over the best way to manage the estate and there can be strained relations with beneficiaries. This can lead to disputes.
What type of disagreements can arise with PRs?
Whilst the PRs may not have caused any loss to the estate, a disgruntled beneficiary may not be happy with their actions. Such concerns include:
- delays in the administration of the estate
- disputes over the valuations of assets
- disputes over the removal of personal items
- not receiving their share of the estate.
Beneficiaries who are not happy with the way an estate is being administered can request an explanation from the PRs. They can ask for an account of the estate and if the PRs don’t provide one then an application can be made to court for an order that they provide an inventory and account.
If a beneficiary is concerned about the actions of a PR and feel that they should not continue to act in the role, then it may be possible to have that PR removed by applying to the Court. However, the court will only remove a PR where there are extremely good reasons to do so. Disagreements between the PRs and beneficiaries as to how the estate should be managed and hostility will not normally, on its own, be enough to remove them.
What happens if a PR has not administered an estate properly?
A beneficiary would have grounds to bring a claim against a PR where that individual has been guilty of failing to administer the estate properly and that has caused loss to the estate as a result
Common examples of claims that a beneficiary might pursue against a PR are:
- where PR has not adhered to the terms of the will or intestacy rules
- failed to pursue a substantial debt owed to the estate
- where the PR has benefited certain beneficiaries over others
- where the PR has sold a property or other assets for far less than they were worth (i.e. at an undervalue)
- where the PR has taken estate assets and used from for their own benefit (known as misappropriation)
What action can be taken against PRs?
If a PR has breached their duties then it may be possible to take action against them. This can include:
- an application to court for the removal of the PR
- an application to Court for an order setting aside a transaction the PR entered into on behalf of the estate
- an application to the Court for an order that a PR effectively repay any profits he has made at the expense of the beneficiaries
The PR has personal liability for any actions they undertake which are in breach of their duties and so if they have caused loss to the estate then they will have to pay that money back.
Given the nature of the relationship between PRs and beneficiaries it is quote common for disputes to arise between them. PRs can become very defensive and beneficiaries can grow distrustful – this can harm the proper administration of the estate. Anyone who has concerns about this, either as a PR or a beneficiary, should take independent legal advice.