Over the past few years, we have seen a marked increase in the number of disgruntled beneficiaries bringing claims against those in such positions, and it seems unlikely that Covid-19 will change that. Indeed, if anything, it is probably safer to assume that the increased financial hardship many individuals may face as a result of the current coronavirus crisis could make them even more inclined to pursue action in respect of any perceived breaches of duty by executors and trustees.
In light of that, we have put together a quick list of reminders for trustees and executors so they can remain alert to their responsibilities, and seek to protect themselves from any allegations of a failure to meet the standards required of them.
Duty to act promptly and with reasonable care
It goes without saying that, although it may be more difficult for executors and trustees to continue to properly comply with their duties during the current pandemic, they must do so. Their duties do not simply fall away as a result of social distancing. Executors and trustees should give sufficient time to ensure any deadlines are met (for instance as to payment of taxes) - alert to the fact that many institutions including the Court and HMRC are seeing increased delays in terms of processing correspondence.
Duty to protect and maximise the value of the Estate
The primary duty of any executor or trustee is to protect and maximise the value of the estate or trust fund. Practically, in the case of a recently appointed executor, this will mean taking immediate steps to ensure that a newly Deceased’s assets are secure (including by, for instance, removing valuables from an unoccupied property and informing the property’s insurers that it is empty). This step remains critical, irrespective of Covid-19.
Duties in respect of Investments
It is likely that beneficiaries feeling (or fearing) a financial pinch caused by the current pandemic will be increasingly concerned as to the performance of any trust or estate investments – and executors and trustees will presumably share this anxiety. They should therefore ensure that they are in regular communication with beneficiaries as to the performance of any trust or estate assets.
Executors and trustees should also be familiar with the scope of their duties, and any requirements imposed on them in respect of investments held by the trust or estate.
If appropriate, executors and trustees should consider seeking urgent professional advice as to risk and strategy in respect of any investments in order to minimise the extent of potential losses.
Duty to be ready with accounts
As at all other times, trustees and executors must ensure they keep trust accounts and other records up to date. The fact this may be more difficult in current circumstances is no protection in itself, and trustees and executors should ensure they are actively keeping on top of matters – and can readily respond to any beneficiary’s requests for accounts or other information.
Responding properly to any difficult issues or criticism
The unfortunate reality is that even the most industrious executor or trustee can find himself or herself subject to criticism. If that is the case, the best possible response is to take prompt advice as to how to mitigate a difficult situation – so please do contact us for guidance and advice should you need to do so.