I'VE BEEN APPOINTED AS EXECUTOR OF A WILL AND NOW A DISPUTE HAS ARISEN, WHAT DO I DO?

You may have agreed to act as an executor for a friend or family member but now find yourself being dragged into a probate dispute and even being named as a defendant within proceedings. 

The first thing to do is to immediately seek expert legal advice to ensure that you cannot be criticised for doing anything which may be outside of your role and which may lead to personal liabilities for costs.

Whether you have been appointed as an executor of an estate under a will or an administrator of an estate where the deceased died in intestate, your roles and responsibilities as a personal representative (PR) of that estate are the same.

The obligation of neutrality

It is the duty of a PR to gather in and protect all of the assets of the deceased, pay all debts and distribute the balance in accordance with the terms of the will, or rules of intestacy (if there is no will).

While carrying out this role, a PR is required to act impartially and in the best interests of the beneficiaries, balancing the needs of each and not preferring one over another (including their own). For this reason, when a dispute arises, or court proceedings have been commenced, a PR is expected to remain neutral at all times.

As long as a PR does act neutrally, any legal costs incurred by the PR as a result of an action brought against the estate will be treated as a reasonable and proper expense of the administration of the estate and will be paid by the estate.

If a PR fails to act neutrally then depending upon the result of the proceedings, there may be several serious consequences for the PR;

1.              The court may find that the PR’s costs of the proceedings should not be paid by the estate and should be met by them personally.

2.              The court may order the PR to personally pay the successful parties’ costs.

3.              The beneficiaries of an estate may bring proceedings against the PR for breach of duty, seeking payment of a lump sum from the PR to

compensate for any financial loss caused to the estate;

What if it is not possible to remain neutral?

There are some circumstances when a PR cannot remain neural and may need to commence or actively defend court proceedings in order to gather in/protect assets of the deceased.  In these circumstances, a PR can depart from the obligation to remain neutral but should seek the agreement of all of the beneficiaries (if they are all adults with capacity) to ensure that their costs will be met by the estate.

If all of the beneficiaries do not agree, there are too many beneficiaries to consult or some are under 18 and/or lack capacity, then a PR can apply to the court for a Beddoe Order, which if granted ensures that whatever the outcome of the proceedings, the PR will not be personally responsible for its own or any other parties costs.  Whether or not a Beddoe order is granted is highly fact specific and centres around the merits of the claim.

What if I am a PR and a beneficiary?

The difficulty arises when the PR is also a beneficiary as they must be very careful to act neutrally when responding to the claim as the PR, but will want to defend the claim in their personal capacity.  In these circumstances, particularly when the party is a joint PR, the best course of action is for one firm to act for the PR’s and for the PR/beneficiary to be represented in their personal capacity only by another firm.

The PR’s role in litigation

If a PR is served with a letter of claim, the PR’s role is to provide information and/or documentation in respect of the estate such as a copy of any wills, letters of wishes, estate accounts and in some circumstances the file of the solicitor who prepared the will. 

Before and during court proceedings, the PR should simply facilitate and encourage any settlement discussions between the parties and if matters are settled, to enter into an agreement with the parties which encompasses the terms of the agreement reached.

If proceedings are issued by one of the beneficiaries or a third party against the estate, the PR will be named as a defendant and will be required to lodge a statement with the court providing evidence of the testamentary documents. 

If proceedings are issued under the Inheritance (Provision for Family and Dependants) Act 1975 the PR must file a statement setting out;

1.              Full details of the value of the deceased’s net estate;

2.              The person or classes of persons beneficially interested in the estate;

3.              The names and addresses of all living beneficiaries;

4.              The value of their interests in the estate so far as they are known;

5.              Whether any living beneficiary is a child or a person who lacks capacity; and

6.              Any facts which might affect the exercise of the court’s power under the Act.

When providing the above statement, the PR may indicate within the acknowledgement of service that they wish to remain neutral and will agree to abide by any decision which the court may make. 

It is usual for a PR who has been named as a defendant, and is not also a beneficiary, to be excused from attendance at case management hearings and the trial, in an attempt to reduce costs.

How can we help?

There are very short timescales set by the court relating to when documentation must be filed following the issue of proceedings, so it is essential that you seek specialist legal advice as soon as you are served with a letter of claim or court proceedings.

If you find yourself involved in a dispute or are concerned that a claim may be brought and wish to ensure that you are acting in accordance with your duties as a PR, please contact us, we are happy to help.