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    What to do when an Executor puts the Estate in jeopardy

    Jun 6, 2019 11:08:10 AM

    The sense of loss and grief after losing a loved one is heightened when the Executor seems to be unwilling or is unable to process the Will by applying for the grant of probate. A delay can see the assets devaluing.

    The beneficiaries in these circumstances have two options:

    1. A beneficiary may serve notice on any executor requiring them to apply for probate, pursuant to Part 78 Rule 55 of the Supreme Court Rules 1970. If the Executor does not comply with the notice, the other Executor may apply for probate or the beneficiary may apply for Letters of Administration with the will annexed pursuant to s69 of the Probate and Administration Act 1898. Leave is reserved for the non-applying Executor to join the application at a later stage.
    2. If an Executor fails to apply for probate within three months of the death of the deceased, a beneficiary may, after obtaining consent or serving notice on all other beneficiaries under the Will, apply for Letters of Administration with the Will annexed pursuant to s75 of the Probate and Administration Act 1898.

    This leads into a second question: what if the Executor due to their acts or omissions puts the due and proper administration of the Estate in jeopardy?

    The recently reported South Australian decision of the Estate of Thornton (deceased); Australia Unity Bank LTD v JT Holdings (SA) PTY LTD [2019] SASC 49 highlights that nominated executors have a responsibility to act on their duties as an executor.

    In this matter the deceased gifted his Estate to his sons John and Andrew in equal shares.

    Andrew made an application that John be passed over as Executor of the Will and that Andrew be appointed as administrator of the Estate with the Will annexed. Why did he do this?

    Andrew considered that:

    • John appropriated, for his own benefit, money belonging to the Estate
    • John had obtained personally or directed to his personal account rent from properties forming part of the Estate and had not accounted for any of that money
    • John had failed to insure or properly manage any of the six properties in the Estate
    • John had failed to pay rates or make arrangements with rating authorities
    • John had failed to liaise with mortgagees with respect to the properties
    • due to the default position across the six properties with the banks, there was a real risk that the first mortgagees would foreclose
    • John did not insure the Estate property
    • John resided in one of the Estate properties and, therefore, precluded the ability for the Estate to benefit from rental income
    • John had not liaised with creditors in order to satisfy outstanding debts against the Estate. The debts accrued interest

    The omissions by John are the types of complaints often complained of by our clients when they seek our advice regarding the failure of Executors to act responsibility.

    Andrew was of the view that this unsatisfactory situation needed to be addressed urgently. The court was satisfied that the due and proper administration of the Estate had been put in jeopardy, or prevented, by the acts or omissions of John in his capacity as Executor. The Court was satisfied that John was not a fit and proper person to take the grant. Andrew was granted letters of administration with the Will annexed. 

    If you have further questions about the responsibility of an Executor, please contact Andrew Frank at afrank@franklaw.com.au

    This is not legal advice.

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    Andrew Frank

    Written by Andrew Frank