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My co-executor client is a nightmare – what can I do?

My co-executor client is a nightmare – what can I do?

You were appointed by a long-standing client as an executor of his Will in conjunction with his daughter as your co-executor.  Following the death of your client, probate was granted to you and his daughter jointly.  Both the daughter and other family members are beneficiaries under the Will.  Over a period of time you and your co-executor have been finding it extremely difficult to agree on many aspects of the administration of the estate especially in view of the fact that your co-executor does not get along with her siblings.  You have become very stressed about the situation and your work is suffering.  What can you do?

It is not uncommon for solicitors to find that the duties of being an executor of a client’s will and trustee of their estate can be difficult and stressful especially where there is ongoing family disharmony.

A recent decision of the Supreme Court of Victoria

 Such was the case recently for a country solicitor who found it necessary to apply to the court to be discharged as an executor of the will and trustee of the estate.  The decision was handed down on 8 May 2018.  (1)

In this case, the deceased had been a farmer near Nhill and the major asset of the estate was a farming property with associated plant and equipment.  The executors to whom probate was granted were his solicitor and his daughter who was the principal beneficiary of the estate.  There were two other adult children of the deceased who had instituted Part IV proceedings by their respective litigation guardians.

The trial judge summarised the solicitor’s difficulties this way:

9. In his affidavit sworn 8 February 2018, the plaintiff sets out his reasons for seeking to be discharged as an executor and trustee of the estate. He deposes that, prior to and since the deceased’s death, ‘there has been very considerable acrimony amongst the family’ as Heather does not get on with her siblings and there have been disagreements between Heather and the plaintiff as to various estate administration matters. As a solicitor in a small community and in circumstances where the plaintiff has known the other parties for many years, he has found the further acrimony between the siblings since the commencement of the Part IV proceedings increasingly stressful. The administration of the estate and the Part IV proceedings increasingly occupy his time, to the detriment of his other work in his legal practice. He also disagrees with Heather as to the conduct and position of the estate in respect of the Part IV proceedings. Heather objects to this statement by the plaintiff, asserting that the plaintiff seeks to disclose a matter of joint privilege. She submits that when two people have a common interest in a document or communication the subject of legal professional privilege, each of them as a party to litigation can avail themselves of the privilege enjoyed by the other.

10 The plaintiff deposes that no third party will be prejudiced if he is discharged and he will not seek an executor’s commission. He does seek payment of his legal costs to date from the estate of the deceased.”

The trial judge set out the applicable principles for application by the court and her reasons for granting the solicitor’s request for removal:

Applicable principles

26 Pursuant to s 34(1)(b) of the Administration and Probate Act 1958, the Court is empowered to discharge a personal representative who wishes to be discharged from the office and, if the Court thinks fit, appoint a new administrator in his or her place. There is no requirement that the Court appoint a new administrator.

27 Ultimately, the decision to discharge a personal representative depends on the facts and circumstances of the particular case and is a determination to be made at the discretion of the Court after consideration of the interests of the beneficiaries, the security of the estate property, the efficient and satisfactory exercise of the trusts and a faithful and sound exercise of the powers by an executor or trustee. “

Should the plaintiff be discharged as an executor and trustee of the estate?

30 The plaintiff’s application is not made lightly. He has committed to being an executor for some time. However, his relationship with Heather as his co-executor is not functional and now causes difficulties for him, both professionally and personally. Their relationship cannot be described as simply displaying a degree of acrimony and lack of co-operation. It is such that the plaintiff no longer wishes to remain in this difficult situation. The plaintiff’s position is untenable for the purposes of the administration of the estate. He is unable to work with his co-executor as he cannot reach agreement with her, both in the past and present and, on balance, he considers he will be unable to agree on future issues arising in the administration of the estate. The estate administration and litigation is also distracting him from his own work commitments and making it difficult for him to live in his small rural community. He is mindful of these matters as well as his obligations under the Civil Procedure Act 2010as an executor and as an officer of the Court. For all of these reasons, the plaintiff seeks to be discharged as an executor of the estate.

31 In such circumstances, it is appropriate that the plaintiff be discharged as an executor and trustee of the estate and be paid his outstanding legal costs to date, such amount to paid out of the estate in the first instance. This order may be revisited in the Part IV proceedings as there is likely to be an issue as to where the burden of those costs falls in the administration of the estate of the deceased.”

This is an important decision for solicitor/executors to keep in mind as it underscores the overriding jurisdiction of the court in relation to estate matters whereby executors can seek relief from the court in appropriate circumstances.

Professional Guidance

 Our experienced solicitors at ethics4lawyers are available to provide telephone or written ethics advice to our valued subscribers. Call us on (03) 9098 8644 or email admin@ethics4lawyers.com.au

Michael Dolan is an Australian Legal Practitioner.  Michael is the Legal Director of ethics4lawyers and was previously a Senior Ethics Solicitor at the Law Institute and is passionate about legal ethics.  Michael enjoys advising and assisting other lawyers respond to their ethical challenges.

References

 Re Flavel; Application by Lipshut [2018] VSC 228 (8 May 2018)