An executor is someone specifically appointed or chosen by the deceased to administer his estate and to ensure that his final wishes are respected. Sometimes conflicts can arise between the beneficiaries of the will and the executors.
Where there is a dramatic deterioration in the relationship between the parties, the beneficiaries can apply to court to have the executor removed. This is a very serious step and the court will only remove the executor in certain circumstances.
This article will examine the attempts in the following recent cases to remove the executors.
Angus v Emmott
Anthony Steel was wrongfully committed of murder in 1979. His conviction was finally quashed on appeal in 2003, but Mr Steel unfortunately died before compensation had been finalised. Mr Steel’s will appointed 3 executors: his partner Margaret Angus, his sister Angela Emmott and Angela’s husband, Donald Emmott. Margaret was the main beneficiary of the will and pecuniary legacies were to be granted to Angela and Donald, along with other family members.
The situation became very tense culminating in Margaret applying for the removal of Angela and Donald as executors. She argued that Angela and Donald had demonstrated animosity and a lack of trust in her such that it would be impossible for them to continue working together satisfactorily.
The Judge concluded that where there is positive misconduct then an executor would be removed but these acts must be enough to endanger the trust property, be dishonest or demonstrate a lack of proper capacity to execute the duties.
Furthermore, the Judge felt that mere hostility between the executors or beneficiaries would not be enough to warrant removal of an executor. The hostility must be such that it is preventing the trust from being administered.
In this case, the Judge concluded that the executors were not guilty of positive misconduct, but that the proceedings did demonstrate that there was a sufficient degree of animosity and distrust between the executors that it would prevent the trust from being administered. A professional and independent administrator was subsequently appointed.
Kershaw v. Micklethwaite
Mrs Kershaw died in July 2008 leaving a will naming her two daughters, Mrs Micklethwaite and Mrs Barlow as her executors, together with Mr Humphries, her accountant. Mrs Kershaw’s will divided her estate between her daughters and son. Her son was to receive two fifths of the estate, Mrs Micklethwaite was to receive two fifths and Mrs Barlow was to receive the remaining fifth.
From the beginning, her son raised complaints about the executors and their administration of the estate. His main complaints were that the assets had not been valued correctly and in particular that the flats and farm included in the estate had been given too low a valuation; that the executors had failed to update him on the progress of the administration; that the executors had failed to identify the extent of the estate; that his sisters should not have taken on being executors as this represented a conflict of interest with their position as beneficiaries; and that the breakdown of relationship between him and the executors was such that he was no longer confident that they could satisfactorily deal with the estate.
All of the son’s complaints were dismissed. It was felt that since the valuations had been prepared by professionals it was for HMRC to challenge the valuations if necessary. Also, while it was acknowledged that the executors did not update the son as regularly as they had promised to, this did not amount to misconduct. In reference to the potential conflict of interest, it was noted that it was common for family members to be both executors and beneficiaries. This is often due to the terms of the will and the wishes of the testator, as it was in this case. This means that the conflict does not in itself mean that the executors should be removed unless it can be shown that they have acted improperly.
Overall, the Judge concluded that the executors should not be removed despite the tense and hostile relationship between the siblings. Mrs Kershaw had chosen the sisters to be executors and had deliberately done so in preference to choosing her son. It was not in all the circumstances right to remove the sisters when they had not acted improperly. The Judge also drew attention to the fact that the son had complained about the sisters soon after his mother’s death and before they had attempted to administer the estate. It was
It was further noted by the judge that replacing the executors at this stage would significantly increase the costs of administration and that these additional costs were not justified.
Alkin v. Raymond
Harry Alkin died in October 2008 having appointed Mr Raymond and Mr Whelan as executors to his estate. Mr Raymond and Mr Whelan were former business associates and friends of Harry. Harry was survived by his daughter Nicole and his widow.
Harry’s estate was valued at roughly £2.5 million and was to be divided into two parts. The first part was a discretionary trust of which Nicole and Harry’s widow were to be the beneficiaries. The second was a life interest trust with income payable to Harry’s widow.
Nicole had a number of complaints about the executors and eventually applied for their removal. Her complaints were that they had not made any income payments from the discretionary trust to her mother; that they had improperly offered Nicole’s ex-husband a loan to assist him with paying for her children’s school fees; that Mr Whelan’s conduct was disrespectful and inappropriate (including unwanted sexual advances) and that the executors had approved payments between themselves. These payments were of invoices produced after Harry’s death, but backdated to when he was alive.
Unlike the previous cases, there is a clear distinction in this case between the beneficiaries and the executors. This made it easier for the court to apply the principle that any decision made must ensure the welfare of the beneficiaries, namely Nicole and her mother.
On examination, the Judge was unconvinced by most of Nicole’s allegations. He suggested that her testimony was biased against the executors and that some events had been manipulated to show impropriety when none had existed. In particular, her allegations of inappropriate behaviour by Mr Whelan seemed to be inconsistent with the evidence of the time. The Judge did however find the issue of the backdated invoice very troubling. The Judge found that the invoice related to overheads of Mr Whelan’s company and had not been approved prior to Harry’s death. This was clear misconduct by Mr Whelan and he was removed as an executor. Mr Raymond’s support of Mr Whelan throughout the trial was also felt to have tarred him with the same brush and he was removed as well.
Lessons
It is clear that a court will not remove an executor unless there has been serious misconduct or where the relationship between executors and beneficiaries has deteriorated to the extent that the executor can no longer effectively administer the estate. If the relationship is hostile or tense, but still workable then it should continue. Similarly to warrant dismissal, mistakes made by the executors must be either a threat to the deceased’s estate, dishonest or demonstrate a lack of ability to administer the estate.
The cost implications of removing and replacing an executor should also be carefully considered before proceedings are initiated.
