The role of the Executor is an administrative one. It is about ensuring that the estate is protected, gathered in and distributed to the beneficiaries.
An Executor who has no financial interest in the dispute (as often occurs with Professional Executors) should at all times remain neutral. It is for the beneficiary who has the financial interest in the estate to defend the claim and to put his ‘head above the parapet’ in the context of the litigation. This occurs in
- Claims under the Inheritance (Provision for Family and Dependants) Act 1975
- Claims for rectification under s 20 of the Administration of Justice Act 1982
- Validity Claims
- Claims relating to the interpretation of a will
Paragraph 5.1 of the Law Society Guidance note on Disputed Wills cautions that
“As an executor you are a fiduciary with duties to the beneficiaries of the estate, whoever they turn out to be. If you are partisan in the litigation, you risk a costs order being made against you personally. Provided you act neutrally in any litigation the costs of the executor should come out of the estate. So far as the warring parties are concerned, it is no longer the case that costs in probate litigation will necessarily be ordered from the estate. Costs are at the discretion of the court, and it is increasingly the case that the unsuccessful party will have to bear them.
To avoid being at risk of costs you should therefore remain neutral and allow the beneficiaries of the will or next of kin to pursue the litigation. Your only obligation in the proceedings is to provide information and to preserve the estate”
An Executor who confuses his role and adopts a partisan approach favouring one party or the other risks unnecessarily exposing himself to costs (see Shovelar v Lane [2011])
An Executor who acts neutrally is entitled to an indemnity for their costs from the estate (see CPR 46.3 (3)).
What are the executor’s duties if he is also a beneficiary of the estate?
An Executor who is also a beneficiary should take care to distinguish their role.
By way of example in claims under the Inheritance (Provision for Family and Dependants) Act 1975 the Executor who is also a beneficiary would not be criticised for taking steps to gather in the assets of the estate but should not take steps to distribute pending the conclusion of the claim.
The Executor/beneficiary would also produce two statements. The first would be the Executor’s statement in accordance with CPR 57.16 (5).
The second statement would be a statement setting out the stance of the beneficiary in opposing the claim so as to protect their financial interest in the estate
Can a solicitor act for both an executor and beneficiary of an estate where the executor is also the beneficiary?
A solicitor can act for an Executor and beneficiary but should exercise caution.
Paragraph 5.2 of the Law Society Guidance Note on Disputed Wills cautions that
There may sometimes be circumstances in which it is difficult for the beneficiaries to conduct the litigation and you, as executor, may wish to do so on their behalf. If so you should:
- be clear that you are making yourself a party to the litigation with all the risks of adverse costs orders being made against you
- protect yourself where possible by taking out an indemnity for costs from adult beneficiaries
The safest course of action is for you to suggest to the beneficiaries that they seek separate advice.
In Parnall v Hurst and others [2003] Langan J (in the context of an Inheritance Act claim) considered that it was expedient in terms of time and costs for the Executor and residuary beneficiaries to be represented by one solicitor.
In doing so it is important that the solicitor distinguishes between ‘administration costs’ incurred in taking instructions from the Executor on estate issues and ‘beneficiary costs’ incurred in providing partisan advice to the beneficiary. The former are recoverable from the estate. The latter are subject to the usual costs rules of costs following the event.
The solicitor should also be mindful of the risk of a conflict of interest occurring.