Can An Executor Change A Will? (NSW)
In New South Wales, an executor must follow a testator’s instructions contained in their will. A failure to abide by a testator’s instructions can constitute a breach of the executor’s fiduciary duty. The court can remove an executor from their role, and in some cases, may even hold them personally liable for mismanagement of the estate. Sometimes, however, there are legal or practical reasons why an executor cannot fully comply with the instructions in a will. This article examines whether an executor can change a will in New South Wales.
The Executor Of The Estate
A testator chooses an executor to administer their deceased estate according to the instructions contained in their will. The executor is responsible for acting on these directions according to the best interests of the estate and the designated beneficiaries. However, an executor can only follow legally enforceable instructions that are possible to implement.
Can An Executor Change A Will?
An executor can make changes to a will if the beneficiaries of the estate give express permission. As such, an executor can ignore the terms of a will if the beneficiary will sign a deed of family arrangement/deed of variation. For instance, a beneficiary might agree to this change to the will because they are financially secure and do not need the bequest. In that case, the beneficiary may prefer that a sibling who is less secure receive a greater provision from the estate.
While an executor can change a will with the beneficiaries’ agreement, there are other instances when an executor may not follow the instructions in the will. Crucially, an executor cannot change a will without legitimate cause.
An executor will change the distribution of an estate if a beneficiary dies before receiving a bequest from the will. Under the Succession Act 2006, a beneficiary must outlive a testator by 30 days to benefit. A well-written will should have a clause that specifies what happens to a gift if the beneficiary does not survive to inherit. Otherwise, it may be necessary for the executor to apply to the Supreme Court of NSW for a judicial decision on who should receive the asset under partial intestacy rules.
An executor may also have to deviate from the terms of a will to satisfy debts of the deceased estate. The beneficiaries may see this necessary deviation as a “change” to the will. The executor is responsible for discharging the liabilities of an estate before distributing bequests. To satisfy the estate’s debts, the executor may need to sell specific bequests meant for beneficiaries or otherwise deviate from the will’s instructions. However, once the executor satisfies these debts, they will abide as closely as possible to the terms of the will when distributing the remaining assets. In this way, when the estate has significant debts, beneficiaries of the will may receive less provision than the testator specified in the will.
An executor may have to “change” a will to interpret a vague clause in a will. For instance, a testator may bequeath their personal possessions to their children in equal shares, but the exact meaning of equal division is unclear. Some measure of interpretation is permitted as long as the executor has the cooperation of the relevant beneficiaries. Otherwise, if it is not possible to reach a consensus on the meaning between the executor and the beneficiaries, it will be necessary for an executor to ask the Supreme Court to interpret the testator’s intention.
Can An Executor Change A Will In Response To A Valid Claim?
The executor has ultimate authority over the deceased estate. However, they must comply with the Succession Act and the Probate and Administration Act 1898. As such, they must follow the instruction in a will unless it is legally or practically impossible to do so, in which case they will effectively “change the will”.
For instance, if someone is eligible to contest the estate because they received inadequate provision, the executor can negotiate with the claimant and “change” the terms of the will. The executor is empowered to make this change because it is usually in the estate’s interests to reach an out-of-court agreement. However, the executor should seek independent legal advice before making any settlement.
Sometimes, an executor makes a “change” to a will that does not benefit the estate or its beneficiaries. In that case, the beneficiaries should apply to the Supreme Court of NSW for an order to compel an executor to act in a certain way. The court may even remove an executor who seriously mismanages the deceased estate or is guilty of executor misconduct. The team at Armstrong Legal can answer any questions you have about the executor’s ability to change a will. Please get in touch with the team on 1300 038 223.