Grounds for Removing an Executor

Grounds for removing an executor include where the executor has lost capacity, the executor has committed a breach of law, the executor has failed to carry out their duties as executor or breached their duties, or where there has been a gross delay in the administration of the estate.

Mismanagement of Estate Assets

If the chosen executor mismanages the deceased estate, such as failing to keep proper accounts, not keeping accurate records, wasting the estate, or making poor investment decisions, the Court may remove the executor from the role. These types of mismanagement may demonstrate that the executor is failing to comply with their duty to act in the best interests of the beneficiaries.

Conflict of Interest

An executor of an estate must avoid conflicts of interest. If the named executor’s personal interests conflict with their duties, they can be removed. A conflict may arise when an executor benefits personally or makes decisions favouring some beneficiaries over others. In some cases, the Court can remove an executor who creates or finds themselves in a serious conflict of interest. 

Breach of Fiduciary Duty

Executors have a fiduciary duty to the estate. A fiduciary duty is a legal duty to act in the best interests of the beneficiaries of the estate. Examples of where an executor may be acting in breach of their fiduciary duty include where they put their own interests over the interests of the beneficiaries. The Court may remove the executor who has committed a serious breach of their fiduciary duty. 

Failure to Act in Beneficiaries’ Best Interests

An executor must administer the estate in a manner that benefits the named beneficiaries. If an executor fails to communicate with beneficiaries, delays the distribution of assets without valid reasons, or acts against the beneficiaries’ best interests, an application for the removal of the executor can be made. The Court can then order the removal of the executor to ensure the estate is managed properly.

Incapacity or Incompetence

If an executor becomes incapable of performing their duties due to physical or mental incapacity or incompetence in managing the estate’s affairs, a beneficiary may apply to the Supreme Court of New South Wales to remove the executor. Where the Court is satisfied that the executor is no longer fit to administer the estate, the Court may remove the executor and appoint another executor in their stead. It is common for the NSW Trustee and Guardian to be appointed in these circumstances. 

Fraud or Misconduct

Fraud or misconduct by an executor is a serious ground for removal. This includes dishonest actions such as embezzling estate funds, falsifying documents, or using the estate for personal gain. The Court can remove an executor who engages in fraudulent or unethical behaviour, ensuring the proper administration of the estate.

Delegation

Under section 75A of the Probate and Administration Act 1898 (NSW), an executor can, by Deed, appoint the NSW Trustee and Guardian or a trustee company. This option is available to an executor before applying for probate and after being appointed. If the will prohibits delegation, this section does not apply. 

Beneficiaries have the right to object to such appointments, and any objection must be lodged and served within 28 days. The appointment cannot proceed without court approval if an objection is filed.

Legal Process for Removing an Executor of the Will 

Removing an executor is a complex legal process requiring an application to the Supreme Court of NSW. 

The person who applies to have the executor removed will be required to produce evidence demonstrating the executor’s lack of fitness or suitability for the role. The process involves gathering evidence, making an application to the Supreme Court of NSW, and attending a Court hearing. If the executor is the only executor, the Court may appoint a new administrator to replace them. 

Filing an application with the Court

An application can be made to the Supreme Court of New South Wales to initiate the removal process. The application to remove the executor must clearly state the reasons for the application. A person wanting to make an application to remove an executor should seek legal advice before commencing proceedings to ensure the application has merit and the applicant understands the risks if the application is unsuccessful. 

Gathering Evidence and Documentation

Gathering sufficient evidence is crucial for the success of the application. This includes documentation proving the executor’s failure to faithfully administer the estate or comply with executor duties, such as financial records, communication logs, and any instances of misconduct. Beneficiaries of the estate must collect and present relevant and probative evidence that supports their claim that the executor is unfit to act. The evidence must demonstrate that the executor has not adhered to the responsibilities as executor.

Court Hearing and Decision

The Supreme Court will schedule a hearing where both parties can present their arguments. During the hearing, the Court will evaluate the evidence, consider the best interests of the estate, and determine whether the executor is unfit to act as executor and should be removed. The Court has the discretion to remove an executor but is generally reluctant to remove an executor unless there is compelling evidence of wrongdoing or incapacity. If the Court is satisfied that the executor is unsuitable, it will order the removal of the executor. 

Appointing a Replacement Executor

If the executor is removed, the Court may appoint a replacement administrator. This could be an alternative executor named in the will or a suitable administrator if no other executor is named. The newly appointed executor will be responsible for continuing the administration of the estate in accordance with the will and the law. The Court’s order will reflect the necessary changes, ensuring the proper administration of the estate.

Notifying Beneficiaries and Interested Parties

After the Court has made its decision, it is important to notify all beneficiaries and interested parties about the removal of the executor and the appointment of a new one. This ensures transparency and keeps all parties informed about the changes in the administration of the estate. 

Appointing a New Administrator

In New South Wales, the legal process available to appoint a new administrator ensures the proper administration of a deceased estate when the originally named executor is unable or unsuitable to perform their duties. Below are the steps and considerations involved in seeking the appointment of a new executor.

Eligibility Criteria for a New Administrator

If the Court has removed an existing executor, it may need to appoint a new administrator in their place. Prior to appointing a new administrator, the Court will consider the suitability of the proposed administrator. The new administrator must be a person who is trustworthy, competent, and capable of managing the estate’s affairs. Often, the Court will look at the individual’s relationship to the deceased and their ability to deal with the estate in the best interests of all beneficiaries. An administrator must be over the age of 18 and should not have any conflicts of interest with the estate or the beneficiaries.

Nomination Process

If a beneficiary or interested party has applied to the Court for the removal of the current executor and the appointment of a new administrator, they will usually be required to nominate a new administrator or a selection of new administrators to choose from. Sometimes, the will may name an alternative executor, or the beneficiaries may agree on a suitable replacement. 

Court Approval for the New Administrator

During the Court hearing, the Court will consider the suitability of the proposed alternative executor or administrator. If the Court makes a decision to remove the executor, the Court will revoke the grant of probate. If there is no alternative executor named in the will, the Court will grant letters of administration with the will annexed to a new administrator. 

Duties and Responsibilities of the New Executor

Once appointed, the new administrator will have the same duties and responsibilities as the original executor. This includes managing the assets of the estate, paying off any debts, defending the estate against litigation, and distributing the assets of the deceased to the beneficiaries in accordance with the terms of the will. The new administrator may be appointed to act as both executor and trustee, adhering to fiduciary duties and ensuring the proper administration of the estate.

Communicating the Change to Beneficiaries

Communicating any changes in the executor to all beneficiaries and interested parties is crucial. The new executor or the solicitor handling the estate must inform everyone involved about the Court’s decision, the reasons for the change, and any implications it may have on the estate administration. 

Transition of Estate Administration

The transition of estate administration from the old executor to the new administrator must be handled smoothly to avoid any disruption in the management of the estate. The new administrator needs to review all estate documents, understand the current status of the estate, and continue the administration process without delay. If the previous executor has already started the administration, the new administrator must ensure that all actions taken so far comply with legal requirements and the wishes of the deceased. 

Seeking Legal Advice From a Wills and Estates Lawyer for Executor Removal

If you believe an executor is not acting in the estate’s best interests, you should seek legal advice. Removing an executor is a complex legal process requiring a thorough understanding of NSW law and the specific circumstances involved. Empower Wills and Estate Lawyers specialise in this area, providing the necessary guidance and representation to ensure due and proper estate administration. For expert assistance, contact Empower Wills and Estate Lawyers today on 1300 414 844.

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Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources that are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.