Recent research has confirmed that High Court claims against executors in England and Wales have grown by more than 20% over the past 12 months and this research was recent published by the ‘Times Newspaper’.
Whilst the total number of disputes remains quite low, legal practitioners believe that this is just the tip of the iceberg, since most of them are settled before they ever reach a court room.
The primary factors behind the claims are identified as an increase in the number of what is known as ‘blended families’, where partners have their own children and another child or children from a previous relationship and also escalated property values.
Many claims involve allegations of a breach of what is known as fiduciary capacity, with the executors failing to act in the best interest of the beneficiaries, usually by distributing the deceased assets against the term of the Will.
These finding come as no surprise, as there are a significant number of cases which have involved disputes both between executors and beneficiaries. Disputes and the popularity of blended families arises from people living longer, having relationships in later life, remarrying, increase number of cohabitees and more stepchildren, more adult children living at home and involving trends.
Similarly, as estates continue to rise in value in line with property prices, they just continue to rise in value in line with property rises and they fuel the potential for disputes to arise.
Often the problem arises in these claims owing to, but not exclusive of;
Inaction by executors. It is a big responsibility, and some may be unable or reluctant to deal with the financial and administrative issues around probate. Estate funds might be used if they have already been inherited.
Reluctance to leave. Occupants in a property owned by the estate, cohabitants, spouses or adult children do not want to leave. In these circumstances, executors may have to take possession proceedings against them.
Family executors. With the advance of home-made Wills, in which people appoint their closest family member as executors, rather than professional executors.
Lack of understanding. People are often unfamiliar with their role as executors, their primary responsibilities to the beneficiaries and their duty to carry out the terms of the Will.
Wills not being updated. Regrettably, failure to update Wills to allow for changed circumstances is all too common.
Probate delays. These can lead to property maintenance, claims and expenses over a long period of time.
Executors’ expenses. These can be a point of a dispute, especially if an executor is living in the property.
Difficult circumstances. It can be very challenging if, for example, an executor does not inherit the property but remains living in the property without paying rent.
Disputes relating to Wills and estate can be further exasperated by an executor who is also a beneficiary, a conflict exists between the two roles which can be hard to separate. Executors have to be neutral whereas beneficiaries have invested interests and people can get into difficulties when trying to juggle the two roles.
Ideally, if there is a dispute, people should have separate legal advisors for their respective roles.
Careful thoughts should be given as to who is appointed in your Will. Considering an independent professional and the estate to be administered in accord with the testators wishes and this may ultimately save on legal costs further down the line.
If disputes do arise, then the ‘waringing’ executors and beneficiaries can ask the court for directions as to how to administer the estate or agree to appoint an independent administrator in their place. Executors should be aware that they can be removed or replaced and asked to repay any expenses. Similarly, if they do not seek the correct indemnities, they can be made personally liable for any legal expenses brought against the estate.
If there is likely to be a dispute or if a dispute already exists, it is very important to obtain the correct legal advice from the very start.
As an organisation, we look towards the possibility of reaching settlement and we endeavour to stay clear of courts as much as possible.
If you would like any further advice, please do not hesitate to contact us:
3C Legal Limited
Tel: +44 (0) 1684 212147
Mobile +44 (0) 7707 644738
info@3clegal.co.uk