This post has been contributed by Amanda Taylor, University of London Teaching Fellow for Equity and Trusts.
When a family member or good friend asks you to act as their executor you probably don’t hesitate and just agree. Your name goes down in the will and once that person dies you are the person to whom all eyes look. You become the living trustee over the estate of the deceased.
As executor your job is to administer the estate in accordance with the wishes of the deceased, and, perhaps more importantly in line within the guidelines set by the Government.
It is by no means an easy job. It can be very time consuming and also can be quite stressful at times. It may mean you have to search out very old correspondence and vital pieces of paper. If the deceased was particularly old, then you may have to literally be searching for paper share certificates or banks books as they probably lived most of their life without the internet. Historical documents might not have been digitalised and so proof of certain things can only be done by providing the paper copy.
The complexity of the job, of course, depends on the size of the estate; are there properties and investments involved? Are there multiple beneficiaries, donees and charities to please? Almost certainly taxation will have to be calculated and paid over if required. That is an interesting job, especially for larger estates, as sometimes the tax bill can be very high and the monetary assets may not be enough to cover the bill.
Many people decide to place the work in the hands of a solicitor. Here, I think, there are some misconceptions. Being the executor does not mean you can hire a solicitor and wash your hands of the job. What it means is it is still your job, and it is still down to you to administer the estate. The solicitor can bring comfort and assurance to you and lead you through the process step by step. However, the reality is that it will still be you doing much of the work. If papers need to be found, then it is you and not the solicitor who will be in charge of looking for them. The other reality is that the solicitor will charge for his service and that means the estate paying. Fees in relation to paying for the administration are acceptable but as the executor is not paying personally some of the other recipients, especially those who might be waiting for the residue to be paid to them, might think the fees a waste of money.
A recent case of Totton & Anor v Totton [2022] EWHC 2345 (Ch) 15th September 2022, has highlighted the fact that when the executor does not carry out his duties he is likely to incur not only the wrath of the beneficiaries but also the courts.
Mr Totton was the sole executor and trustee of the estate of Hazel Totton. He decided to administer the estate alone without legal help. Mr Totton was to receive 50% of the estate and the two claimants were to receive the other 50% in equal shares. There was a trust in place but the two claimants did not wish for the trust to continue and asked that it should be terminated so they would be able to benefit from their share of the estate now.
Mr Totton started well and managed to sell the property to realise its monetary value. He then, inexplicably, seemed to come to a full stop. He did nothing more and despite receiving letters from the claimant’s lawyers continued to do nothing.
The claimants went to the courts to ask them to order him to act or, if he would not, to remove him from office and replace him with someone who would act.
Mr Totton apologised profusely to the court and the claimants, but not before the court had imposed a freezing order on the assets of the estate and found him to be in breach of his duty and then in contempt of court.
The judge gave him a chance to comply which Mr Totton gratefully took. He admitted he had found himself unable to deal with the situation and so had tried to ignore it.
The claimants had suffered detriment due to his inaction.
Mr Totton was handed down a four-month sentence for the contempt of court which was suspended if he complied by a specific date.
The moral of the story is to be careful when you flippantly agree to things. Being an executor is not a job to be taken on lightly and you might well end up needing a get out of jail card.
I am grateful to Herbert Smith Freehills LLP for their insight into this case.
Amanda Taylor
Thank you Amanda for this interesting post. May I have your reply to my following queries?
There were 3 beneficiaries and one of which was Mr. Totton. Two of the beneficiaries informed the Executor that they wished to terminate the trust. Could they do that if only 2 beneficiaries and NOT all three of them? Because I note that ALL the beneficiaries together may terminate the trust as in the case of Saunders v Vautier.
If the testator (Mr. Totton’s late mother) specified in her will that the executor and trustee was only Mr. Totton and could not be replaced, then could the court issue order to remove the executor from his role and to appoint one of the other two Beneficiaries as replacement trustee on the request of the other two beneficiaries?
If the testator specified in her will that the trust could be terminated only upon the fulfilment of certain conditions in the trust, can ALL the beneficiaries (e.g. 3 beneficiaries in this case) terminate the trust if not all the conditions in the trust are fulfilled?
Dear KC,
Thank you for your comment. Amanda Taylor has been in touch and has commented as follows:
1. No all 3 beneficiaries need to agree
2. No because if the trust exists and, for instance Mr Totton died, then a mew trustee and administrator would need to be found
3. It is unlikely that clause would be valid because the settlor, testator now has no control and the trust would not be able legally to continue forever anyway.
Best wishes,
UG Laws