Claims against executors on the increase
According to statistics released by the Chancery Division there has been a three-fold increase in Court claims issued against executors in a twelve month period. It is reported that there were 107 claims issued for breach of fiduciary duty in 2012 which rose to 368 in 2013, including claims relating to wrongful distribution of the estate to favour some beneficiaries over others and thefts from estates by the executors.
The rise has been attributed to an increase in the use of non-professional (or “lay”) executors who choose not to instruct solicitors to assist in the estate administration, possibly to save money and believing the task is more straightforward than it is. However this can be a false economy. Many people may not appreciate that in acting as an executor they will be personally liable if the estate is incorrectly administered. There can be a number of risks in executors not seeking professional advice including: misinterpretation of the Will; misunderstanding their duties; making insufficient enquiries regarding the extent of the estate and any debts; incorrectly reporting and paying – or even not reporting and paying – tax that may be due in respect of an estate including inheritance tax, capital gains tax and income tax; mismanaging the administration itself; and making incorrect distributions.
One way to ensure your estate is properly administered and to seek to avoid such difficulties would be to consider appointing a combination of lay and professional executors. For advice on acting as an executor or who best to appoint as your executor, please contact any member of our private client team.