“Let them fight about it when I’m gone”. These are words that often come back to haunt the families of a deceased when the administration of an estate has not gone according to plan.
You often hear stories about families or beneficiaries fighting over the gifts they have received under a will or being “left out”. What is not spoken about as frequently though, are situations where jointly-appointed executors come into conflict with each other.
Disputes between executors arise frequently in practice. These can be over a myriad of issues, such as the allocation of specific items, sale of property, selection of real estate agents, lawyers and accountants.
The issue for the estate is that executors must act jointly. When a dispute arises over something that seems a trivial or logical step, the process is often stalled due to the stalemate. Unless co-executors agree, nothing happens.
The ability to remove an executor is very limited. Courts have historically taken the view that the executor’s wishes in who they appoint as their executor are paramount, and only in very limited and extreme circumstances will a court disrupt the wishes of the deceased with respect to the appointment of their executor. Generally, only reasons such as proven misfeasance or extreme delays would give a court reason to entertain an application.
The consequences of removing joint executors are extreme. Essentially, any application to remove an executor due to irreconcilable conflict between them will most likely result in all appointed executors being removed with someone independent being appointed in their place. With that comes expense.
The recent case of Re Franks in the Queensland Supreme Court was an example of what can happen when executors do not get along. Mr Franks appointed two of his children and his sister as executors. After Mr Franks’ death, his sister renounced and the two children could not agree on the most basic processes to administer the estate. Part of the problem was that expenses would need to be incurred and the estate was, apparently, asset-rich, cash poor. This lead to conflict and significant delays and essentially, the estate sat completely un-administered for almost 12 months.
In a very rare demonstration of exercise of its powers in this area, the court ordered the executors be removed and an independent administrator appointed. The impact on the estate of the costs of the court proceedings and the independent administrator were unlikely to have been contemplated by Mr Franks when he drafted his will.
When it comes to executor appointment, including those that might replace the first appointed executor, choose wisely.
Authors: Kylie Wilson
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.