Taking up position as an executor is not a responsibility to be taken lightly.
The administration of a person’s estate is something to be carried out respectfully, efficiently and with the best interests of the beneficiaries in mind.
A person who falls short may find themselves facing the wrong end of an application to remove an executor, with possible costs consequences.
This article summarises the issues to be taken into account when considering (or facing) such an application, said issues conveniently summarised in the case of: Re Estate of McDonald (Deceased) [2022] EWHC 2405 (Ch)
Section 116 Senior Courts Act 1981 (s116) and section 50 Administration of Justice Act 1985 (s50)
There are two routes to removing an executor, both before a grant of probate (via s116 or s50) and after a grant of probate (via s50).
Pre-probate an application under s116 showing “special circumstances” could be deployed to remove an executor named in a will, if removal was considered to be “necessary or expedient”. An executor can of course also renounce (resign) if they have not begun the administration.
With a post-probate scenario, s50 is the more appropriate mechanism. In Goodman v Goodman [2013] EWHC 58 (Ch) Newey J acknowledged the significant overlap in the two mechanisms and the availability of s50 pre-probate. In reality the kind of indicia that would lead to removal are potentially of the same kind under both sections. This is covered below.
It should theoretically be possible to resolve differences without resorting to court proceedings, but unfortunately judicial intervention is sometimes the only way to move a matter on.
While the “executor’s year” is a term that refers to the broad acceptable time frame within which an estate may be administered, not all estates are created equal and some can be extremely complex and fraught with difficulties. It is not unusual for administrations to be underway for several years perhaps because of the nature of the administration, but quite frequently because of the nature of the executors themselves.
Re Estate of McDonald (Deceased) [2022] EWHC 2405 (Ch)
Re McDonald is an excellent round up of what (not) to do as an executor. The guiding principle is concerned with whether the administration of the estate is being carried out properly by the executor.
In practical terms, the judge must consider whether it is in the best interests of the beneficiaries to replace one or more of the executors.
In brief, the late Clive Angus McDonald passed away on 30 September 2020. Just a week before his passing, Mr McDonald signed a new will.
While the defendant remained a beneficiary and executor under this new will, he remained so under much less favourable terms: his pecuniary legacy was halved and the testator’s property was subject to a right of occupation.
The defendant thought of this will as an “invalid… deathbed will”, as “highly suspect”, as “fraudulent”, “a con, a scam” and proposed that the “less toxic” earlier 2017 will be followed.
Despite being an appointed executor, the defendant proceeded to demonstrate an inherent inability to get on with almost every individual involved in the administration of the estate and further, he failed to defer to the authority of the court.
He expressed his intention to challenge the will’s validity and established a clear lack of neutrality. His conduct throughout the case involved four applications “totally without merit” and notably, he referred to the judges as “incompetent” and corrupt. These factors are explored further below.
When considering removal, the court will consider the following factors.
Wishes of the testator
The testator has considered who is best to administer their estate and their wishes must clearly carry some (probably quite significant) weight. Such intentions should not easily be set aside unless there are special circumstances.
Having said that, it may well be the case that circumstances changed after the will drafting, such that an appointment is no longer suitable or appropriate. Here, the judge was “entirely satisfied” that the matters set out in this case – such as the executor’s “equivocal approach” to the will’s validity – amounted to special circumstances.
An appointment under a will is therefore not conclusive of the issue if the interests of the beneficiaries are not being protected.
Wishes of the beneficiaries and/or a breakdown in relationship
The court would be concerned with the interests of the beneficiaries as a whole and whether those interests are being adequately served. An individual demand for a replacement executor is unlikely to be acceded to without more and any breakdown in relationship would be considered in the light of its impact on the administration of the estate.
Thought would be given to how much of the estate is left to administer and whether any replacement – such as an independent administrator – would be better placed to deal with the administration in terms of knowledge of the issues, speed, relationships and costs.
Conflict of interest
The existence of conflict does not necessarily give rise to a need for removal of an executor. It depends on the nature of the conflict, how it arises and the impact on the interests of the beneficiaries.
The court would not pass over or remove an executor if the conflict had arisen from the testator’s own acts by placing the executor in that position in the first place. For example, the defendant here had a beneficial interest in a property arising from a deed of trust made by the testator in favour of the executor.
The testator proceeded to appoint the executor despite his beneficial interest. On this basis, the conflict did not give rise to a need for removal.
Challenge to the will
In Re McDonald, the executor referred to the will as “fraudulent”, “bogus” and “highly suspect”. He challenged the validity of the will itself and yet also sought to defend his appointment as executor when appointed under that very same will, seemingly wanting to have it both ways. Clearly an executor who doubts the very validity of the will which gives him authority to administer may not be of a mind to administer according to the terms of that will.
Mistakes
It is recognised that mistakes made by an executor are forgivable and understandable and without more, unlikely to lead to removal, although of course it depends on the mistake, the consequences and any actions the executors have taken or are minded to take.
General conduct
An executor’s conduct will also be taken into consideration. In Re McDonald, the executor was described as “obsessive” and engaged in “frequently abusive” letter and email-writing to the beneficiaries.
This was in addition to an extensive selection of complaints to various regulatory bodies and a failure to accept the authority of the court – evidenced best by his objections to HHJ Paul Matthews’ judgment set out at paragraphs 64 to 66.
A procedural perspective
From a procedural perspective, it is important to note that the court is not required to make findings of fact in relation to an executor: for instance, in relation to the executor being unpleasant, biased or generally going rogue.
The removal is a discretionary remedy and the judge is free to exercise their judgment, making a decision based on what they think is in the best interests of the beneficiaries. The court can take into account all the circumstances and facts as presented at the date of hearing. McDonald confirmed that there is no requirement for the facts to be foreshadowed in evidence, and therefore new facts can be taken into consideration.
In Re McDonald, the Judge was entirely satisfied that the conduct of the administration amounted to special circumstances and on that basis it was expedient to pass over the executor. HHJ Paul Matthews suggested that the combination of factors considered above amounted to a “comprehensive disqualification” for the executor’s fiduciary administration of assets for the benefit of other people.
Further, the Judge was satisfied that it was appropriate in these circumstances to remove the executor under s50 on the basis that it would be difficult, if not impossible, for him to complete the administration or the estate and/ or administer the will trusts in accordance with the law.
Appointment of an independent administrator
It is not unusual for executors and administrators (on an intestacy) to fall foul of the principles set out above. Sometimes an individual appointed is just not suitable, out of their depth or facing hostility and difficulties from a beneficiary pool. Sometimes removal or resignation is the best practical solution.
Russell-Cooke Trust Company (RCTC) is an independent trust company wholly owned by Russell-Cooke LLP. It acts as an executor or trustee in the administration of trusts and/or estates. RCTC has extensive experience of running both contentious and non-contentious matters, many including high value assets or involving cross border issues.
Appointing an independent executor or trustee, either from the outset or to replace an existing appointment, can be a powerful tool to ensure as much as possible that wishes are respected. RCTC has a useful independent voice as it stands outside of and is neutral to family issues and dynamics.