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Executor role – Remaining neutral when a claim is made against an Estate

An executor role is to administer a Deceased’s person’s estate.  

Claims for reasonable financial provision from an estate pursuant to the Inheritance (Provision for Family and Dependants) Act 1975. This increases the likelihood that executors or administrators known as Personal Representatives (“PRs”) may have to deal with such a claim as part of the administration of the estate. This can be stressful, as PRs can feel caught between the two warring sides, i.e. the claimant on the one hand and the beneficiaries under the Will or intestacy rules on the other hand.

The starting point is that PRs should stay neutral in relation to a claim. The PRs’ role is to distribute the estate to whoever is legally entitled to it, but it is not for the PRs to decide.

It is therefore not for the PRs to form a view on the merits of the claim or to distribute the estate in accordance with that view. If they do so, they risk exposing themselves to personal liability for distributing the estate to the wrong person if their view turns out to be wrong. They may also jeopardise their right to indemnify themselves out of the estate in respect of their costs of dealing with the claim, because that indemnity only applies to costs properly incurred.

Instead, the PRs should insist that how they distribute the estate must be determined either by agreement between the parties or by the court. In particular, they must not allow any animosity they may feel towards either the claimant or the beneficiaries to undermine their neutrality.

If the PRs come under pressure from one or both of the parties, their fall-back position is to seek directions from the court as to what to do. A court order will generally protect the PRs from any personal liability and preserve their indemnity.

For PRs caught up in a claim, remaining neutral does not mean doing nothing. The PRs are the people who have knowledge of the estate and control over it. Therefore their main function will be to provide information about the estate to the claimant, the defendant beneficiaries and the court.

Even-handedness and neutrality should also inform the PRs’ response to a beneficiary who requests a distribution from the estate despite the threat of a claim. Generally, PRs are entitled to resist such requests on the basis that until a claim has been resolved (either by agreement or by the court), they cannot know with certainty to whom they should distribute the estate. They therefore cannot be expected to simply take a view and expose themselves to personal liability if that view turns out to be wrong.

If the claimant and the defendant beneficiaries wish to try to compromise the claim without a trial, the PRs should once again remain neutral and should take a ‘back seat’, providing up-to-date information about the estate when required to help the process but otherwise allowing the other parties to negotiate.

The PRs must avoid incurring unnecessary costs in the negotiations, as they might otherwise be criticised for reducing the estate unnecessarily.

It will generally be unnecessary for the PRs to incur the costs of attending or being represented at mediation, particularly if they can be contactable by telephone or email to answer any question regarding the estate which may arise during the mediation.

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