Wed | Sep 19, 2018

Laws of Eve | An executor's job can be difficult

Published:Monday | April 2, 2018 | 12:00 AM

Proper estate planning is critical so that our loved ones do not face additional stress in their attempts to wind up our estates after we pass away. One of the fundamental features of estate planning is the preparation of a will, its proper execution, and the best choice of executors.

It is the latter decision on which I will focus today, because it is exceptionally important and involves more than simply asking a trusted friend to do you a favour. In all instances, the executor has to be committed to fulfilling the deceased person's wishes by properly administering the estate, and must be diligent and organised. The executor's competence and suitability are truly tested if the deceased person's estate is large or burdensome.

In basic terms, the executor's responsibility is to collect all assets, make the application for probate of the will, pay all debts, and distribute the estate to the beneficiaries. Those are broad headings that could include filing claims in court to protect the interests of the beneficiaries or even defending claims brought by dissatisfied beneficiaries, who may challenge the validity of the will or take action in court to have the executor removed. Such actions are, however, not common, and when they do occur, the expenses incurred by the executor are usually paid by the estate.

Eyebrows might have been raised because I used the word "usually", because executors do not expect to be 'out of pocket' when they are representing the interests of an estate. When this issue was examined in the case of Jones v Longley [2015] EWHC 3362, the court's conclusion that the executor may have to pay leaves the general rule intact, but serves as a reminder that executors must act reasonably.

Jones was the solicitor who drafted the will and Longley was the eldest of the deceased's three children; and they were both executors of the deceased's estate. Although they started out working together, the two executors had a falling-out. Jones then filed a claim in court to have Longley removed as an executor and Longley, who chose to represent himself, defended that claim. Eventually, Longley instead succeeded in having Jones removed as executor, because his siblings, who were adult beneficiaries of the estate, supported Longley's bid to remain the sole executor of the estate, and the court acceded to that request.

 

Judge's discretion

 

Generally, in civil cases, the judge has the discretion to determine which party should pay the other's costs. Although this often means that the person against whom a court order is required to pay the successful party's costs, it is not always so, and this was the case in Jones v Longley where Longley (the successful party) was required to pay Jones' costs! The reasons for this included:

The finding that Jones' action in filing the claim against Longley was reasonable because, with the executors in deadlock, the estate could only be protected if either, or both, executors was removed.

The conclusion that there was no basis for complaint about the steps taken by Jones in administering the estate.

The view that Longley's demands during the administration of the estate were "meticulous, pedantic and ... unreasonable" and caused Jones to go to court.

In representing himself in the court action, Longley (an intelligent non-lawyer) filed thousands of pages of documents that were prolix and repetitive.

In the end, Longley was ordered to pay costs because the court ruled that "there are not two sets of rules, one for lawyers and one for laymen. If you embark on litigation without a lawyer, you cannot expect to be judged by rules different from those which apply to litigants legally represented."

The case confirms that executors, such as Jones, will not be punished for doing the best they can to protect the estate, and all litigants should carefully consider whether it is better to hire a lawyer than attempting to represent themselves.

- Sherry Ann McGregor is a partner, arbitrator and mediator in the firm of Nunes Scholefield DeLeon & Co. Please send questions and comments to lawsofeve@gmail.com or lifestyle@gleanerjm.com.