The Rights of Beneficiaries  vs. The strain of being an Executor

Acting as executor in an estate can be difficult, especially when grieving beneficiaries wish the matter to be resolved as soon as possible. This can be especially difficult if you are a friend or advisor and are not fully aware of the deceased’s personal affairs which are likely to have been managed by family members. Meaby & Co can assist you in fulfilling your duties as an executor or administrator (collectively called Personal Representatives) to ensure that things run smoothly and to provide a source of clarity for all involved during a confusing and stressful time. If on the other hand you are a beneficiary and have concerns regarding the conduct of personal representatives, we can advise you of your rights and how best to resolve matters.

Although beneficiaries do not have an immediate right to the assets they have inherited, they have the right to bring proceedings if they feel that the estate is not being administered properly. The estate could be complex to administer so cooperation between personal representatives and beneficiaries is vital. The beneficiaries will often be the close family and friends of the deceased and may be able to provide helpful information in relation to the deceased’s assets and the whereabouts of any beneficiaries who may have either died, or moved address since the Will was made. Having someone else in control of the estate can be unsettling for beneficiaries especially when information is not forthcoming . On the other hand, even the most reasonable request from a beneficiary can feel like the straw that broke the camel’s back for an already overburdened personal representative.

When the grant of representation is obtained, the assets of the estate vest in the personal representatives. It is essential that they are managed properly otherwise the Executor/PR will be held personally liable for any loss to the beneficiaries. As personal representative, a duty of care is owed to the beneficiaries to exercise reasonable care and skill when administering an estate and a duty is owed to the Court indefinitely unless they are removed from office or the grant is revoked. Any breach of this duty could result in an action from the beneficiaries. Below are some of the most common actions against the personal representatives of an estate and how they can be avoided.

Slow progress during the administration

Probate is a process which can often take longer than anticipated especially in a complex estate. Delay is often unavoidable and unexpected especially when dealing with so many organisations who each have their own processes.

In very simple cases, probate can take only a few short months but the usual timescale is around 6-9 months, sometimes extending to a year. The personal representatives are not bound by law to distribute the estate to beneficiaries before the passing of 6 months from the date of death and cannot be forced to do so by the Court before the passing of 12 months (the executor’s year). This can extend to a little longer if it can be shown that there is a good reason for delaying distribution and that the personal representative is acting reasonably and with integrity. PRs should not however hold on to assets needlessly and should administer the estate in good time. All involved should be  aware of the process to avoid frustrations and regular updates should be given to beneficiaries. Therefore, communication is key.

Beneficiaries should also bear in mind that the personal representatives may have taken steps to protect themselves and the estate from any possible claims and it can be sensible to allow sufficient time to expire to ensure that these protections are fully effective.

Failure to provide accounts or a copy of the Will

It is best practice to inform all beneficiaries of their entitlement under the Will, and it is usually ok to provide them with a copy, especially where this will not give rise to conflict or affect the administration process. Personal representatives must also keep full estate accounts and these should be available to beneficiaries on request.

All residuary beneficiaries of the estate should be provided with a copy of the estate accounts but those inheriting a specific legacy are not entitled to a copy although one may be provided in good faith. Simply knowing where they stand can help calm beneficiaries and reduce friction.

However, anybody with an interest in the estate can make an application to the Court for an account under Section 25(b) of Administration of Estates Act 1925 if a direct request to the PR has been met with refusal.

The preparation of good and thorough accounts and schedules will assist in updating beneficiaries and can help personal representatives keep track of the funds they receive and the changing values of appreciating assets or accruing liabilities.

Negligence of PR

Beneficiaries can issue court proceedings if they consider that a personal representative is acting negligently. It is sometimes frustrating for beneficiaries, as before the litigation begins, they may find that their rights are not as strong as expected when requesting information or documents. Court proceedings calling for full disclosure are therefore popular so it is best for the Executor to be forthcoming and transparent with the beneficiaries from the outset to avoid this or to reach a settlement.

Removing an executor/ Stepping down or asking for help

Personal representatives can step down voluntarily if they feel that they are not able to comply with their obligations, or discord between themselves and the beneficiaries will hamper the progress of the administration. It may be better for the personal representative to appoint a professional to continue on with the administration on their behalf as this may release some of the pressure and reassure the beneficiaries. Alternatively, beneficiaries can apply to the Court to seek removal or substitution of a personal representative. This is not an easy process and the beneficiaries will have to show serious unsuitability, misconduct or incapacity of the personal representative to fulfil his duties.

If you would like advice on your rights as a beneficiary or duties as personal representative, please contact Hollie Skipper at hskipper@meaby.co.uk, or feel free to call on 020 3861 5158.

 

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