Introduction

It is common for a testator to appoint more than one executor under their Will. This eases the responsibility of collecting assets, paying debts, distributing the estate to beneficiaries and other functions necessary to administer an estate. Appointing multiple executors is also accepted as a safety measure against questionable conduct that might otherwise go unchecked if there is only one executor. It is also thought to decrease the stress of executors in an emotional time – the old proverb “many hands make light work” certainly comes to mind.

Unfortunately, this is not always the case. Contrary to the hopes of many testators, executors do not always come together to carry out their final wishes. Often testators are more focused on how they want their estate to be distributed, rather than who would best work together to distribute their estate. All too often, this can result in emotions flaring, previous tensions rising to the surface and executors clashing.

Common disputes

Conflicts can arise at any point in the estate administration process, from prior to granting of probate to the very cusp of distribution of the estate. Common issues that executors may disagree on include, but are unfortunately not limited to:

• The interpretation of the Will itself;
• Which (if any) solicitor and/or accountant should be appointed to act for the executors;
• Who to engage to value estate assets;
• The assets comprising the estate;
• The actual value of estate assets;
• The division of estate assets between beneficiaries, especially where the executors are also beneficiaries;
• Claims for reimbursement of ‘legitimate’ expenses incurred on behalf of the estate;
• Accusations of conflicts of interest where executors are also beneficiaries;
  suspicions that a co-executor has misappropriated funds both prior to and after the testator’s death; and
• Which assets should be appropriated to various beneficiaries.

The consequences of executor conflicts

When conflicts arise between executors there are, at best, delays in administering and distributing the estate. This can lead to additional costs, increased stress and tension between executors. In the worst case scenario, there may be expensive court proceedings, a greatly diminished estate and the possibility that an executor may be found by the Court to be personally liable for costs.

How can these conflicts be avoided?

When making a Will, it is essential to keep in mind not just who the testator wants to appoint as executors, but how those people will interact, to ensure that the testator’s wishes are carried out. It is unlikely that people who do not get along ordinarily will band together during a uniquely stressful time.

• There are many considerations to take into account before deciding on executors, including:
• What is the pre-existing nature of the relationships between the proposed co-executors?
• Who are the beneficiaries and is there likely to be conflict between the executors and the beneficiaries or even amongst the beneficiaries themselves?
• If conflict between beneficiaries is likely, are the proposed executors suitable to resolve or contain that conflict?
• How complex is the estate?
• Would the appointment of an independent co-executor and their specialised skill-set assist?
• Is it likely that the Will may be challenged and how would the proposed executors react?

It is important for executors to be mindful of their responsibilities even when conflicts arise between executors. It is often in the best interests of both the estate and the individual executors to negotiate through a disagreement without commencing court proceedings.

Conclusion

Although undesirable, disputes between executors can and do occur. These disputes can result in lengthy delays to the distribution of the estate and, potentially, expensive court proceedings, as well as permanently damaged relationships. Obtaining comprehensive legal advice from the beginning of estate administration can assist in alleviating disagreement between executors to ensure timely and cost-effective administration of the estate, especially where there is the potential for conflict between executors.

For further information and assistance on any estate planning or estate administration matter, please contact our experienced team at Bell Legal Group on (07) 5597 3366 or email law@belllegal.com.au.

 

Disclaimer

This article was written by Bell Legal Group. Its publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice.