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Disputes with personal representatives and trustees
Where an executor (or administrator) or trustee fails to perform his or her duties with care and skill, or in a timely manner, disputes can arise. Beneficiaries will want to ensure that their interests are being properly safeguarded and that they can hold those in control to account during the administration process.
What is the role of an executor/administrator?
Put simply, the role of an executor or administrator is to collect in and administer the estate according to law, and under the terms of the will or intestacy rules, for the benefit of the beneficiaries.
The duties of a personal representative are far reaching, and disputes can arise at any stage of the administration process. Complaints frequently come from beneficiaries of the estate, however disputes can also arise between co-executors who are unable to agree or progress the administration. There may also be questions as to the suitability or neutrality of an executor / administrator who is also a beneficiary, or concerns that estate assets are being mismanaged or sold at an undervalue.
While the scope for conflict is broad, common causes of action include:
- Undue delay to the administration process
- Failing to keep or provide clear and accurate accounts
- Disagreements relating to the sale of estate property
- Breach of duty or conflict of interest
- Wasting of assets
- Disputes between executors
- Removal of executors
- Interpretation or construction of the will’s terms.
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What is the role of a trustee?
Trustees receive assets from an individual (the settlor) and hold those assets “on trust” for the benefit of persons usually set out formally in a trust document (the beneficiaries). Their primary obligation is to ensure the welfare of the beneficiaries and to protect the trust fund.
In contrast to personal representatives, trustees can take up appointment either during an individual’s lifetime (under a lifetime trust) or upon their death under the terms of their will (a will trust). Often, personal representatives will also be appointed as trustees under a will. Those roles are similar, but carry distinct duties.
A trustee may be a professional, or someone with no prior experience. Disputes can arise between the beneficiaries of a trust, or within the trust itself (i.e. between co-trustees). Common claims can include:
- Access to trust accounts and other documentation
- Trustees’ expenditure
- Claims against trustees for breach of trust
- Failing to act in accordance with the terms of the trust
- Mismanagement of trust property or causing loss to the trust
- Failure to act with impartiality
- Applications for the removal of trustees.
