Contesting an Executor of a Will
The person named as executor in a deceased’s last valid will has the right to apply for probate and to administer the deceased’s estate. If the will establishes testamentary trusts and names a trustee (who may or may not also be the executor) then that person has the right to act as trustee of those trusts.
However, if a person believes the last will is invalid, they may challenge it. If the court agrees that the last will is indeed invalid, the court will grant probate for an earlier valid will, and the executors and trustees named in the earlier valid will have the right to act as executor and trustee.
The power to act as executor or trustee derive from the will itself, or in some cases, a court order.
Grounds for Contesting the Appointment of an Executor or Trustee
Lack of testamentary capacity
A will made by a testator whose testamentary capacity was in question may not be valid and the will may be challenged on that basis.
By challenging the will, the claimant is, in effect, challenging the named executor’s right to probate and the named beneficiaries right to the estate under the terms of that will.
If the court finds the testator lacked the required testamentary capacity at the time of making their last will, the court may find that the will to be invalid and instead, grant probate to the executor named in an earlier valid will, or an administrator where the deceased died ‘intestate’, that is, without a valid will.
A will made under undue influence means a will made under coercion. A will made under coercion may be challenged.
If the court is satisfied that the last will was made under coercion and is invalid on that basis, the court may grant probate to the executor named in an earlier valid will, or an administrator where the deceased died intestate, that is, without a valid will.
Fraud or forgery
A will made through fraud or forgery is invalid and the will may be challenged on that basis.
If the court is satisfied that the last will was made through fraud or forgery the court will find the will to be invalid and the court will grant probate to the executor named in an earlier valid will, or an administrator, where the deceased died without a valid will.
Conflict of interest
Many wills nominate executors and trustees who are also beneficiaries. In most cases, holding the role as executor and beneficiary or trustee and beneficiary is permissible and is not a conflict of interest.
However, the executor or trustee must act in accordance with the terms of the will and statutory requirements. If they receive a benefit in excess of what they are entitled to under the terms of the will or statutory requirements, a conflict of interest may arise and the beneficiaries may bring proceedings for the removal of the executor or trustee.
Failure to fulfil duties
An executor or trustee who fails to fulfil their duties may be removed from their role by agreement or court order.
Whilst a minor or one-off failure or delay may not be sufficient grounds to remove an executor or trustee, a repeated and persistent failure to perform the duties will have more chance of success.
The onus will be on the person bringing the removal proceedings to prove the breaches.
Non-compliance with statutory requirements
An executor or trustee who fails to comply with their statutory requirements may be removed from the role by agreement or court order. In some cases, they may also be held personally liable for any losses suffered by the estate, trust or beneficiaries.
Breach of fiduciary duty
Executors and trustees have an obligation to act in the best interests of the beneficiaries. This is known as a fiduciary duty.
An executor or trustee who breaches their fiduciary duty may be removed from the role by agreement or court order.
Where the executor or trustee is found to have breached their fiduciary duty and the breach had resulted in a loss to the estate or the trust, the executor or trustee may be held personally liable for those losses.
The Process of Contesting the Appointment of an Executor or Trustee in NSW
File a Caveat
If a person intends to contest the appointment of an executor or trustee before they are formally appointed by the court, they may do so by challenging the will on the grounds the will is invalid.
In these cases, the claimant may choose to lodge a probate caveat against the estate. A probate caveat will prevent the court from granting probate in relation to the deceased estate for 6 months unless it is removed earlier.
It is important to note that a probate caveat is different to a property caveat.
Whilst a probate caveat is lodged against an estate and prevents the court from granting probate for a deceased estate, a property caveat is lodged against a specific property and prevents any dealing with the property (i.e., sale, transfer, mortgage) until the caveat is removed by agreement or court order.
File a Statement of Claim
As the person named as executor in a will is entitled to apply for probate, any person wanting to challenge a will should put the executor on notice of a potential claim as soon as possible.
If a person wishes to challenge a will and the claimant, executor and beneficiaries cannot reach agreement, the dispute may require the court’s involvement leading to contested estate proceedings.
In contested estate proceedings, the executor who has been notified of the claim may file a statement of claim and add the claimant as a defendant to the proceedings.
Serve the Statement of Claim
Once the statement of claim has been filed, it must be served on all defendants.
File a Defence
Once the defendants have been served with the statement of claim, they are required to file a defence setting out their claims.
After the statement of claim has been filed and before the court’s judgement is handed down, the parties may require another party to the proceedings to produce documents relevant to the proceedings. This is often referred to as discovery.
Most matters can be resolved through negotiations and mediation.
Mediation is where the parties meet with each other and an independent mediator who is responsible for facilitating the mediation, identifying each party’s claims, narrowing the issues, and exchanging offers.
If an agreement is reached during mediation, the parties can formalise the agreement in a formal binding document (i.e., Deed of Family Arrangement). In some cases, the agreement will need the court’s approval.
If the contested estate proceedings cannot be resolved through negotiations and mediation, the dispute may proceed to a court hearing before a Judge during which each party will be able to present their case and the court will make a final determination in relation to the dispute, for example, which of the deceased’s will was their last valid will.
Outcomes of Contesting an Executor or Trustee Appointment in a Will
Where a person contests the appointment of a particular executor or trustee before they have been appointed, they often do so by challenging the particular will that appoints the executor or trustee.
If a person successfully challenges a will, the court will grant probate to the executor of an earlier valid will, or if the deceased died without an earlier valid will, to an administrator.
Alternatively, if a person is seeking the removal of the executor or trustee after they have been appointed, because they have failed in the duties, breached their fiduciary duty, have caused a conflict of interest, or allege misconduct, if successful, the court will remove the executor or trustee and appoint one or more people to replace them.
Timeframe for Contesting Executor or Trustee Appointment in NSW
A dispute resolved through negotiations and mediation can often be resolved quicker, in a matter of months.
However, disputes that require a final court hearing can take a year or more.
Therefore, negotiations and mediation can often result in a faster, cheaper and less adversarial resolution between the parties.
Alternatives to Contesting Executor or Trustee Appointment in a Will
Where a person contests the appointment of an executor or trustee, they generally do so by challenging the will that contains the power of appointment.
Other reasons for contesting the appointment of an executor or trustee is where they have already been appointed but have failed in their duties, breached their fiduciary duty, have caused a conflict of interest, or engaged in alleged misconduct.
Most matters can be resolved through negotiation. An experienced wills and estate lawyer will be able to assist with negotiating you a favourable outcome by putting your best case forward and protecting your interests throughout the process.
Mediation is where the parties meet with each other and an independent mediator who helps facilitate the mediation, including identifying each parties claims, narrowing the issues, and exchanging offers.
If an agreement is reached during mediation, the parties can formalise the agreement in a Deed of Family Arrangement or similar formal binding document. In some cases, the court will need to approve the agreement.
The costs of mediation are often shared by the parties.
Removing an executor or trustee
After appointment, a person may seek the removal of the executor or trustee if they have failed in the duties, have breached their fiduciary duty, have caused a conflict of interest, or engaged in alleged misconduct. The strength of a claim will depend on the facts and circumstances.
Appointment of a independent executor or trustee
If an executor or trustee is removed by agreement or court order, another executor/administrator or trustee will need to be appointed.
Where the will names alternative or substitute executors or trustees, those individuals may remain in their roles or be appointed. Where the will does not name alternative or substitute executors or trustees, the court may appoint one or more other people to act as administrator and trustee. This can include the next of kin or other relatives or an independent representative, such as the NSW Trustee and Guardian.
Empower Wills and Estate Lawyers Can Help You With Contesting a Will in NSW
Empower Wills and Estate Lawyers can help with contesting the appointment of or removing an executor or trustee.
If you would like advice regarding the removal of an executor or trustee, call or email now for a free initial consultation to see if we can help.