How to defend a claim against an estate when you are appointed Executor in a Will

Originally written by Martin Mallon in his capacity as Associate at Attwood Marshall Lawyers and first published by Attwood Marshall Lawyers on 19 November 2021. Reproduced here pursuant to the permission previously granted for Martin Mallon to use his published work for professional promotional purposes. Copyright in the original publication remains with Attwood Marshall Lawyers. This archival republication is not affiliated with or endorsed by Attwood Marshall Lawyers.

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The article reflects the law and circumstances at its original publication date and is not current legal advice.

When we hear about people contesting a Will, we generally think about people that have been left out of a Will entirely, or those who feel they have not been left what they consider to be fair. It is not uncommon for disputes over Wills to arise and for family members to come forward and challenge the amount that they believe they are entitled to receive in the estate. There are a number of parties involved in the process when a Will is contested, and legal representation is important for all parties affected.

One of the most important stakeholders that plays a role when a Will is contested is the person, or persons, named Executor of the estate. The Executor has the task of defending any family provision claims.

For the Executor of the estate, having to defend a claim can be very complicated and stressful, especially if this is their first time acting in such a role. The role is certainly not for everyone!

When can a Will be challenged and/or contested? A Will is usually contested or challenged when a person:

receives substantially less or feels aggrieved by the provision contained in the deceased’s Will and files an application in Court seeking an order for further provision to be made to him/her/them from the estate for their proper maintenance and support (known as a Family Provision Application); alleges that the deceased lacked testamentary capacity or was not in the right state of mind at the time the Will was executed and claims it is invalid; claims the Will was not prepared or executed pursuant to the requirements under legislation.

The role of an Executor in estate disputes An Executor plays a critical role in estate disputes because they step into the shoes of the Will-maker and they have a positive duty to represent the interests of the estate.

Executors and personal representatives have statutory duties and obligations that are set out in section 52 (1) of the Succession Act 1981 (Qld) (and analogous legislation in other jurisdictions) and under common law.

In the Will of W F Lanfear (dec’d)(1940) 57 WN (NSW) Williams J succinctly summarised the responsibility of an Executor faced with a family provision application:

In the ordinary case, especially where the estate is a small one, it is the duty of the Executors either to compromise the claim, or to contest it and seek to uphold the provisions of the Will. For that purpose, they should place all the relevant evidence before the court relating, not only to the case generally, but to any particular circumstances which the court should take into consideration relating to any particular gift in the Will.

The Executor’s role can be daunting and time consuming, especially without the assistance of a lawyer who practices exclusively in this area.

Determining if a Family Provision Claim has merit Will disputes and estate litigation is a very complex area of law, and people involved in litigation are often going through some of life’s most stressful events. It is understandable that emotions will be running high.

Unfortunately, these types of events can present an opportunity for disgruntled siblings or family members to bring a claim against the estate simply to cause trouble or provoke an argument. That’s not to say a claim doesn’t have merit. But there are instances where some family members have a sense of over entitlement and may try to seek further provision from an estate that is simply not warranted.

It is the Executors role to respond to any claims made however it can be difficult for an Executor to determine if the claim has merit or if it should be dismissed. For this reason, it is imperative that an Executor seek the advice of an experienced estate litigation lawyer. If a claim has no merit, then an estate litigation lawyer will aim to have the claim dismissed at the earliest opportunity so that it does not drain the estate through excessive legal costs.

Avenues available for an Executor if the application lacks merit Pursuant to Rules 658 of the Uniform Civil Procedure Rules 1999 (and analogous legislation and Court procedure in other jurisdictions), an Executor may make an application to Court seeking orders to summarily dismiss an Applicant’s application seeking further provision and costs. The purpose of this application is designed to seek an order that the proceedings be dismissed sooner rather than wait until a full trial due to the associated costs that could drain the estate.

His Honour Judge Bernard Porter QC stated in his decision of Charlesworth v Griffiths & Anor [2018] QDC 115 at paragraph 16:

…in my view, if it were demonstrated that the proceedings were “useless and futile” because by the time a trial was completed, the estate would be so diminished as to make it plain that the applicant’s claim was in all the circumstances doomed to fail, it would be open to the Court to dismiss the proceedings on a summary basis.

If the Executor’s application is successful, the Court may dismiss the family provision application with costs. However, these types of applications are rare because an Executor must show that the applicant has no real prospect in successfully obtaining an order from the Court for further provision and in all the circumstances it is doomed to fail.

It is highly recommended that Executors seek assistance from a lawyer who specialises in this area to provide them with comprehensive advice on this complex issue because if an Executor files a summary dismissal application and it is unsuccessful, the Court could make an adverse cost order against him/her personally.

How does the Executor defend a Family Provision Claim? The Executor must act in the best interests of the beneficiaries of the estate at all times and, although their role is to uphold the provisions of the Will of the deceased, they must also act reasonably.

It is an extremely demanding role and legal proceedings can take their toll on even the most experienced Executors. These situations can become more complex if the Executor also happens to be a family member or if they are known to the family. The Executor is handing very sensitive and personal matters and it can be challenging to remain neutral when disputes arise.

Once the Executor is notified of a family provision claim, they will need to:

• Respond to the claim, which can involve meeting with an experienced estate litigation lawyer who can help guide them through the process;
• Ensure no assets of the estate are distributed before seeking legal advice;
• Prepare Court documents and affidavits;
• Set out the nature and value of the estate;
• Respond to allegations made by applicants.

The Executor must participate in the court process and alternative dispute resolution. If mediation is not achieved, the matter may be determined at a full trial where all the evidence would be tested.

In approximately 80 to 90 per cent of all cases, a resolution can be achieved at or before mediation if both parties are willing to negotiate, reducing the risk of the matter going to trial. However, an Executor can elect to strenuously resist the application up until a full hearing.

A lawyer who specialises in this area can effectively point out the weaknesses of the applicant’s claim and utilize strategies to place the estate in a strong position on the question of costs.

At Attwood Marshall Lawyers, we provide advice on our view of the applicant’s prospects of success and the range of a possible award by the Court (if any) and seek instructions from Executors if they wish to resolve the matter in an effort to minimize loss to the estate.

If negotiations fail, then it will be necessary for the Executor to defend an application at trial.

Costs If an Executor has acted appropriately, in good faith, in upholding the deceased’s Will and complying with his/her duties then their costs will usually be borne by the estate. However, a defendant Executor is only entitled to his or her costs from the estate when they are reasonably and properly incurred in regard to his or her conduct in the litigation. The Courts have taken the position that a defendant Executor should objectively assess the evidence and the merit of the application and if necessary, compromise an action brought on an estate (see: Collett v Knox [2010] QSC 132).

If an Executor refuses to negotiate and deliberately drains the estate in legal costs in total disregard to the interests of the beneficiaries of the estate, then it is open to the Court to make an adverse cost order against them personally.

Are all Executors up to the task? Fulfilling the role of an Executor is not necessarily for everyone. If a person is named as an Executor under the deceased’s Will, there is no obligation to accept the position. Although some people may feel that it is an honour to perform this role and to ultimately step into the shoes of the deceased to manage their affairs and distribute their assets in accordance with the Will, it can get you in hot water if you fail to perform your duties properly or fail to seek the appropriate advice.

Executors must be careful to remain neutral and always act in the best interest of the estate and its beneficiaries. If you have been appointed as an Executor of an estate that involves complex family dynamics, blended families, and the risk is high of someone contesting the Will, you may want to think twice before accepting the role and meddling in the estate or if you do, ensure you obtain advice from someone who can guide you through the process.

It can be easy for Executors to let their emotions get the better of them, especially if they are related to other beneficiaries who are contesting the Will. An Executor can try to settle all claims made against an estate at the earliest opportunity for the least cost or depending on the circumstances defend the claim “at all costs”.

Executor removal If an Executor is found to not be performing their duties appropriately, or they are dragging out the process of administering the estate through an excess period (years) or found to be acting in their own best interests, an application may be made against them to have them removed from their role.

The Court has a discretionary power to remove an Executor and to replace him/him by appointing an Administrator with the Will annexed under s 6 of the Act.

Section 52(2) of the Act states that if the personal representative neglects to perform his or her duties the Court may, upon the application of any person aggrieved by such neglect, make such order as it sees fit.

There are some principles that are considered by the Court when deciding whether to remove an Executor from the estate. Firstly, a Court will not likely interfere with a testator’s appointment of Executors and trustees. Secondly, the due administration of the estate in the interests of the creditors and beneficiaries is paramount. As it was put in Miller v Cameron (1936) 54 CLR 572 by Dixon J:

The jurisdiction to remove a trustee is exercised with a view to the interest of the beneficiaries, to the security of the trust property and to an efficient and satisfactory execution of the trusts and a faithful and sound exercise of the powers conferred upon the trustee.

In light of the general principles, it is always best to get the support of an experienced estate litigation lawyer if you are an Executor defending a claim to ensure you can identify the strength of the claimant’s case and possible range that they may be entitled to and work out a strategy in whether you are open to negotiation or wish to take a hard line approach. An estate litigation lawyer will help you carry the burden of being an Executor and ensure disputes are resolved effectively.