Posted: Tuesday, 19 April 2022 @ 10:24
As in any legal dispute, where possible it is best to use targeted legal action to achieve one's objectives. Far better to get the case resolved as quickly as possible with minimal fuss.
Concerning difficult executors and inheritance disputes, some points to remember:
1 Remember Power Lies With The Executors
An executor will generally remain entitled to grant of probate and to administer the estate in priority to anyone else. At a practical level the executor has control of the money and the documents. The secret of effectively bringing the executor to account is skilful use of legal procedures and negotiation techniques to effectively outmanoevre the opponent.
2 Use the First Year Carefully
The executor is given one year to distribute the estate – As a result during that year be cautious (unless there is a risk of assets being illegally distributed) in taking action. After ten months from date of death it starts becoming a different ball game and the beneficiary/person with an interest can start by being more aggressive in challenging the executor.
3 Distinguish Between Pre-Grant and Post Grant Legal Steps
In inheritance disputes a key factor is whether probate has been obtained as this influences the legal options available.
With respect to Pre-Grant Caveats oten a sensible first step in stopping a grant of probate to an unsuitable executor is to enter a caveat, as it prevents a grant being made in respect of an estate (except grants ad colligenda bona or pendente lite). Indeed in some cases such as citations, a caveat is a necessary precursor..
Caveats are an inexpensive blocking tool and can actually quite effective to bring the other side to the table. Be warned that your bluff may be called and then you have to be prepared otherwise your client will face a costs award. As we see later, they must be used if you are about to issue a citation.
4 Be Proactive and Consider Targeted Action
With respect to the targeted action, (beyond Removal) consider some of the following below which are effective ways to challenge the executor:
i) Pressure to Renounce. Renunciation. Renunciation is only an option where a nominated executor is cooperative since the executor cannot be forced to renounce. This can only be used where an executor has not already intermeddled with the estate. Anyone named as an executor in a will may abandon the role by signing a renunciation witnessed by a disinterested witness, ie the witness must not be mentioned in the will, and should not be a family member.).
ii) Citations. Where renunciation is not possible, citations are a good tactical way of trying to force a delaying executor into action, or to entitle someone else to administer the estate. There are two main types to consider: a citation to accept or refuse a grant, and a citation to take a grant applies where an executor has not intermeddled and cannot be persuaded to renounce. Citations are a nice form of legal action as it is quite targeted, can put the executor pressure and force him or her to start dealing with the Court. Even with the most difficult executor, do not underestimate the fear which an executor can have when faced with specific Court action.
iii) Passing over. Within the scope of s.116 of the Supreme Court Act 1981 the Hig Court may appoint someone other than a nominated executor (or any other entitled person) to administer the estate if it considers that by reason of any ‘special circumstance’ it would be ‘necessary or expedient’ to do so. This can be over disputing co-executors, where there is a conflict of interest, and it can also be useful where the executor is thought to be of bad character, or where he is unlikely to administer the estate properly.
iv) Grant ad colligenda bona. If the dispute looks set to continue on for some time, it is possible to consider an application for a grant ad colligenda bona defuncti. This gives a limited grant of administration enabling the estate to be administered in the meantime for the purpose of preserving its assets. A key aspect of a grant ad colligenda bona – and why it is attractive to the registrars and the court – is that it merely preserves, and does not allow for distribution of the estate as between competing legal parties.
v) Inventory and account. My favourite application as it can achieve so much and with respect to executors who are committing fraud, it can provide access to bank accounts which fraudulent executors hate; it is also inexpensive. I have seen the most obstructive executors fold once they have faced a costs order and the threat of committal if they breach an order.It is the quickest way to compel a lazy or uncommunicative executor to account for his activities is to apply for an order that he exhibit an inventory and account in respect of the administration (see AEA s.25(b)). Why I like Inventory and Account. It is a relatively low risk application. Unlike other court actions such as removal of executor which are not certain to win despite the evidence, it is a relatively risk-free court step and clearly defined. As a consequence, there is little downside in making the application and less stress for the client to go to Court.
vi) Part 64 legal proceedings within the High Court as a mechanism. The downside is you face greater costs risks but on a matters of more complexity Part 64 is the way to go to. On matters of real financial complexity you should also consider instructing a forensic accountant to give added strength to your arguments. The Court has wide power under CPR Part 64 to direct such accounts and inquiries as necessary. Where the action is for an account it can be brought under this part and is supported by a Claim form.