Disputes with executors

The executor of a deceased estate has a duty to exercise the same care as an ordinary prudent business person would extend to their own affairs (Bartlett v Barclays Bank Trust Co Ltd (No 1) [1980] Ch 515). The executor must perform their duties honestly and in good faith for the benefit of the beneficiaries and no exemptions are allowed if the executor knowingly and fraudulently breaches those duties (Reid v Hubbard [2003] VSC 387).

If the executor breaches their duties then “interested persons”, such as beneficiaries, may apply to the Supreme Court for orders relating to the administration of the estate.

Alternatively, the executor can apply to the Court for advice or orders in relation to the distribution of the estate. Usually, an executor will not be liable if they then follow the directions of the Court.

Example

2 years ago James Forsyth died. He appointed his brother, Stephen, as executor of his estate. 

The beneficiaries under the will are James' 3 children, all of whom are aged between 18 and 30 years old.

The estate is worth about $5 million, comprised of a commercial office building and the house in which James lived. 

The 3 children are unhappy with the time it is taking Stephen to sell the assets and pay the proceeds from the sale to each of them as one-third beneficiaries. When they have spoken to Stephen, he has been unwilling to explain why it is taking so long. 

Stephen is also unwilling to account to them for what income has been earned in rent from the properties since James died and, also, has not rented out James's home or put it on the market for sale.

The 3 children seek advice about making an application to the Supreme Court of Western Australia for Stephen to be removed as executor of the estate and for one of them or the Public Trustee to be appointed instead.