Estates and trusts are administered responsibly, for the most part, however, there are circumstances where disputes can arise. Common complaints against trustees and executors can include failure to act neutrally between beneficiaries, lack of providing sufficient information, and dealing with assets incorrectly.
Executors can be criticised for delay in the administration of estates, while trustees can find themselves accused of poor investment choices, acting outside of their powers, or acting when they have a conflict of interest.
Contentious probate refers to any dispute about how a person’s estate is being administered. Losing a loved one is a very difficult and emotional time and problems with how their estate is being handled can make it even harder. Although the available methods to resolve the issues will depend on the specific case, there are some early common-sense steps that can help resolve developing disputes and prevent the need for court action.
Understand the Process
It is essential that you understand what you can expect from your trustee and executor.
It is commonly misconceived that beneficiaries are entitled to all the information regarding the trust or estate’s assets or the reasoning behind the trustee or executor’s decisions. Although a lack of transparency concerning these matters may give rise to suspicion about their motivation, there may be a good reason for the executor and trustee’s actions. For example, the settlor or testator may have requested that some information remain private.
Until the assets have been distributed, beneficiaries’ have limited rights. If they are named in the will, they can expect to receive a copy of that will and then copies of the estate accounts once the administration progresses.
It is also very important to remember that administering an estate takes time. The more complex it is, the longer it will take. Executors cannot be made to distribute an estate until at least one year has passed from the date of death. They also cannot be made to distribute if there is a good reason preventing them from doing so.
It may seem obvious, but the easiest way to find out what is happening is to ask. Although executors and trustees have a great degree of discretion as to what information they disclose, in most cases they will recognise the importance of transparency. They are under no obligation to explain every decision they have made but will usually be happy to provide regular updates to help manage beneficiaries’ expectations on what they may receive and when. Furthermore, if a beneficiary expresses concern about how the estate is being administered, it is usually in the trustee or executors’ interest to justify their actions.
If communication is unsuccessful, the beneficiary can call on their rights to information. The accounts will give a good understanding of the assets and how they have been valued or invested. This is a good starting point in deciding whether an estate is being administered effectively or if there are grounds for complaint.
It is sometimes the case that an individual may feel they have not been provided for, or sufficiently provided for under a Will. That individual may seek for the Will to be rearranged post death or may consider making a formal claim from the estate. In these cases it is important to consider seeking specialist advice and for the Executors and potential Beneficiaries to communicate effectively, following certain protocols to try and avoid the necessity for proceedings in Court.
If the accounts show inconsistencies such as missing assets or badly performing investments, and these cannot be explained by the trustee or executor, then we highly recommend seeking professional legal advice. Trustees and executors have a duty of care to beneficiaries meaning they must act in the beneficiaries’ interests. If they are in breach of this duty and it has caused loss to the trust or estate, they may be held personally accountable.
If after communication between the solicitor and trustee or executor, the responses remain unsatisfactory and it is clear that the trust or estate is not being managed competently, court action may be an option and you may wish to seek legal advice on this.
Apply for Removal
When beneficiaries no longer have faith in the trustee or executor, they can apply to the court for their removal. This will usually be accompanied by a claim for breach of duty. Where there is clear evidence of misconduct, an application for removal will usually be successful.
Hostility alone will not justify removal. The demonstration of the breakdown in the relationship between the trustee or executor and the beneficiaries and its adverse effect on the administration of the estate will be required.
If you would like to discuss any points in this article further or are looking for independent advice relating to contentious probate, please contact Spire Solicitors LLP on 01603 677077.