Avoiding claims against your estate

There has been a drastic rise in the number of claims issued against executors in the past year - data recently released by the High Court shows that 368 claims for breach of fiduciary duty by executors were lodged in 2013, up from just 107 in the previous year. So what is the reason behind such a substantial increase?

The rise in claims of this nature appears to correspond with an increasing number of testators appointing lay persons, rather than professionals, as executors of their wills. People may view friends or family members as a safe pair of hands, yet unfortunately in many cases this couldn’t be further from the truth. Acting as an executor in the administration of an estate is an onerous, time-consuming and potentially complex task. While it is only natural that lay people are less au fait with the complexities of the role than professionals who deal with these matters on a daily basis, ignorance of your duties as an executor is no excuse in the eyes of the law.

In more extreme cases, a manipulative executor who is not subject to any form of professional regulation may use their lack of expertise as an excuse for intentionally favouring a particular beneficiary or even themselves. While this sounds somewhat unlikely, a number of the claims issued last year involved allegations that executors had favoured themselves when making distributions, or even intentionally stolen assets from the estate.

Other contributors to the rise in claims against executors include: the growing complexity of family relationships; executors who are beneficiaries and therefore in a position of conflict; larger estates; and an increased willingness to commence court action. People appear to be less afraid to engage in litigation these days, perhaps because it has become less of a taboo subject or because of the ease of accessing information online about how to bring a claim.

Our advice to testators would be to think long and hard before appointing “DIY” executors to act alone. The cost savings may seem attractive but the long-term reality does not always match up with that hope or expectation. The most practical suggestion would be for testators to consider appointing a solicitor alongside a lay person in order to limit costs but also to secure the professional advice and guidance that may well be needed, particularly in a complicated estate.