I Don’t Trust The Executor (Vic)

An executor has extensive powers to act on behalf of a testator in administering a deceased estate. The executor collects the estate assets, often transferring the property into their own name. The executor has a fiduciary duty to protect these assets and distribute them to the rightful recipients. Most executors complete their work honestly and in the best interests of the estate and the beneficiaries. However, there is potential for an executor to abuse their position of trust for their own interests. This article explains how to proceed on the rare instance when there is a legitimate reason not to trust the executor in Victoria.

Testators trust The Executor With The Estate

An executor is the “personal representative” of the testator in the administration of the estate. In Victoria, the Administration and Probate Act 1958 authorises the executor to act in place of the testator, with broad powers over the deceased estate. The executor can sell property, empty bank accounts and transfer real property into their own name. An executor can even deviate from the terms of the will when necessary to discharge estate debts and settle claims against the estate.

The executor has a fiduciary duty of loyalty to protect the interests of the estate and the beneficiaries. Therefore, it is vitally important that the testator trusts the executor. The testator often chooses an executor who is the major beneficiary of the will, as the executor is then working to protect their own interests. Alternatively, the testator can appoint an impartial friend or extended family member who is not a beneficiary of the will. This is a prudent approach, especially if there is potential for conflict between the beneficiaries. For more complex estates, the testator may even decide to engage a professional (such as a solicitor) to act as executor.

Relationship Between Executor And Beneficiaries

Beneficiaries need to realise that although the executor works to protect their interests, the executor does not work directly for the beneficiaries. The executor’s duty is to the estate, but they do not have to report every step to the beneficiaries. It is in everyone’s interests for the heirs to establish and maintain a good relationship with the executor so that there is open communication and confidence.

Estate administration in Victoria can take far longer than beneficiaries expect. The executor usually undertakes a range of practical activities and often must wait for the Supreme Court of Victoria to grant probate. Even after the executor has probate, it is prudent to wait at least six months before they distribute the will’s bequests. This delay is necessary as someone could claim from the estate during this time. If the executor distributes the estate assets too early, they can be personally liable for any loss. While this delay is standard, a beneficiary may believe that the executor is unreasonable or even concealing malfeasance.

A beneficiary should only be concerned by delays that the executor cannot explain. If an executor updates the beneficiaries on the estate administration process, then a short delay should not cause concern. Other signs that you may not be able to trust the executor include:

• The executor is using the deceased’s bank accounts for unexplained transactions. The executor must carefully document all debts and costs of the estate and preferably not withdraw untraceable cash from the deceased’s bank accounts.
• The executor is living in the deceased’s house. It is sometimes necessary for the executor to live in an estate property for a short period to secure the premises or reduce accommodation expenses. However, such an arrangement should be short term, and the executor cannot delay administration for their own convenience.
• The executor is giving themselves advances from the estate. It is irregular for an executor to receive an advance from the estate even if the executor is a beneficiary of the will. However, an executor may receive an advance if the circumstances warrant an interim distribution to all beneficiaries.
• The executor is intimidating beneficiaries. While a beneficiary needs to respect the executor’s authority, there is no excuse for an executor to intimidate or mistreat a beneficiary. If an executor acts in this way, the beneficiary should contact a solicitor immediately.
• The executor is claiming expenses without documentation. An executor is entitled to reimbursement for expenses incurred in administering the estate. However, these expenses should be reasonable and documented. For instance, an executor cannot charge the estate for luxury travel and accommodation unless it is appropriate, given the testator’s instructions and the overall size of the estate.
• The executor is selling assets to close associates. The executor must resist the impulse to sell estate assets directly to their friends and associates, even if this will “save the estate” time and sales fees. All asset sales must be arms-length and at market value. If a beneficiary knows that an executor is selling assets to close associates, this is a red flag of possible misconduct.
• The executor is excessively delaying the estate administration. As noted above, beneficiaries should not be surprised by delays in deceased estate administration. However, if there are long, unexplained delays, this can be a red flag that a beneficiary should look more closely into the executor’s conduct.

What To Do If You Don’t Trust The Executor In Victoria

A beneficiary who distrusts an executor should first consult with other estate beneficiaries. If the other beneficiaries think that an executor is acting dishonestly, then the beneficiaries can apply to remove the executor. Only the Supreme Court of Victoria can strip the executor of their powers over the estate.

If you do not trust the executor of an estate in Victoria, you should seek legal advice from an experienced wills and estate solicitor. The team at Armstrong Legal will listen to your concerns over the executor and guide you through applying for the removal of an untrustworthy executor. Please telephone 1300 038 223 or email today for peace of mind.