Removal Of Executor (Vic)
One of the most important decisions that a testator makes when drafting a will is the selection of the executor of their deceased estate. Even with careful planning, not every executor is ultimately capable of discharging the duties of the role. Occasionally, it is necessary to file for the removal of the chosen executor because the person wants to renounce their duties, or does not act in the best interests of the estate and the beneficiaries. This article explains the process involved in replacing an appointed executor in Victoria, with reference to a recent Supreme Court case.
Executor Of Estate
The choice of executor should not be made lightly, as the task can be time-consuming and it best suited to someone with patience, attention to detail and good communication skills. The testator should select someone who will act appropriately and competently to manage his or her duties. Most testators choose a spouse, family member, or close friend as the executor of the estate. Some testators prefer to engage a professional in this role to reduce the burden on their family and friends.
The Responsibilities Of The Executor
The appointed executor is responsible for administrating the deceased estate after the testator’s death. In practice, this means communicating with interested parties, collecting together the deceased’s assets, paying any estate debts and generally safeguarding the estate until their duties are completed. The executor is also responsible for protecting assets until they are transferred to the beneficiaries, whether that means taking out insurance on real property, arranging storage of valuables, or representing the estate against legal challenge or contest.
Removal of Executor
These responsibilities can be an unexpectedly heavy burden on an executor, and it is not unusual for someone to regret agreeing to act in the role. In Victoria, an executor who has already commenced their duties can only voluntarily resign with the permission of the Supreme Court of Victoria. The Administration and Probate Act 1958 makes provision for an executor to renounce probate and for the court to appoint a replacement administrator to assume the burden of administrating the estate.
The same legislation allows for the involuntary removal of an executor in Victoria. The Supreme Court can remove any executor who is unfit to act in the office or if the continued appointment of the executor threatens the due and proper administration of the estate or adversely impacts on the interests of the beneficiaries.
The court has been reluctant to define the exact circumstances that give rise to the removal of an executor. Generally, it is cause for concern if the executor is delinquent in their duties. Previous judgments have emphasised that the motive behind the executor’s behaviour is irrelevant, so it does not matter whether the executor failed because of incompetence, carelessness or malicious intent. The court has historically found an executor unfit when he or she:
- is bankrupt or convicted of a felony;
- neglects their duties;
- causes undue delay;
- fails to adequately communicate with the beneficiaries;
- fails to act in harmony with a co-executor; or
- displays a disqualifying conflict of interest.
Case Study on removal of executor
The question of whether a conflict of interest is sufficient to justify the removal of an executor was recently examined in the Supreme Court of Victoria case, Connock, Barbara Faye v Connock, Richard Anthony (in his capacity as executor of the estate of Connock, Dr Richard Hugh Shephard) . The court referenced an early authority on this issue, Monty Financial Services v Delmo (1996), which established that “unfitness to act” could be based on the executor’s conflict of interest, but that not every conflict of interest was cause for the removal of an executor.
In this case, the plaintiff, the widow of the deceased, was applying for the removal of the executor of the estate, the deceased’s son from a previous marriage. The plaintiff’s claimed that the executor had a conflict of interest because he was the prospective beneficiary of pending litigation against the estate. In essence, the plaintiff claimed that the executor was unwilling to follow the terms of the will, as required as executor, because he was also a beneficiary contesting the terms of the will. The court found in this case that there was a patent conflict of interest between the executor’s duties and his personal interest in the outcome of the estoppel proceeding, but that this conflict did not warrant the removal of the executor. As executor (and defender of the estate), the son was required to judge the validity of his own legal claim against the estate, and he had a duty to halt distribution of the estate on the basis that there was a viable claim against the estate. Some of the deciding factors in this decision were:
- The administration of the estate was almost finalised and there would be a delay if the executor was removed and replaced;
- The executor was a practising solicitor and barrister and was able to make a judgement as to the viability of his own claim although he was not entitled to rely solely on his own judgement and ought to consult an outside authority as to his likelihood of success; and
- There was no prejudice to the plaintiff, as her bequest was preserved pending the decision of the court.
A testator who is concerned about their choice of executor should consider naming a number of people in their will to act as executor. This has the advantage of reducing the pressure on any one person, and ensuring that each executor can provide oversight of the other executors.
The contested wills team at Armstrong Legal can communicate on your behalf with a recalcitrant executor, and if necessary, help you arrange the removal of an executor. Contact the team on 1300 038 223 for assistance today.