Executor Incapacity & Inaction: A Beneficiary’s Guide

Introduction

An executor is legally appointed in a will to administer a deceased estate, a role that carries significant responsibilities, and it is crucial to understand what an executor of a will is and what their duties are to ensure the deceased’s wishes are met. However, serious problems arise when an executor is unable or unwilling to act, or otherwise fails to carry out their duties, leading to considerable delays and stress for beneficiaries.

When an executor fails to fulfil their duties, beneficiaries have several options available to protect the estate’s value and their inheritance. This guide explains the steps that can be taken, from sending a formal letter of demand to applying to the court to have the executor removed, and underscores the importance of consulting a wills and estates lawyer to safeguard your interests.

Executor Duties & Estate Timelines

The “Executor’s Year” & Administration Timeframes

An executor is generally allowed a period of about 12 months to administer a deceased estate, which is commonly referred to as the “Executor’s Year.” This timeframe serves as a guideline for how long it should take for an executor to carry out their duties. However, this one-year period is not a strict deadline, as the time required can vary depending on the estate’s complexity.

Certain factors can legitimately extend the administration process, including:

• The specific nature and complexity of the estate assets.
• The contents of the Will, particularly if it establishes a life estate for a beneficiary.
• The presence of beneficiaries who are minors, which can add legal complexities.

Fiduciary Duty to Act in the Best Interests of Beneficiaries

When an executor accepts their role, they assume a fiduciary duty to the estate. This legal obligation requires them to act honestly, carefully, and always in the best interests of the beneficiaries. In practice, this means the executor must put the needs of the estate above their own personal interests.

This fundamental duty requires the executor to perform several key tasks with diligence and integrity. The core responsibilities of an executor include:

Responsibility	Description
Administering the estate	This involves collecting all assets, paying any outstanding debts and taxes, and ensuring a smooth transfer of property.
Distributing assets	The executor must identify all beneficiaries named in the Will and ensure they receive their rightful inheritance.
Acting impartially	An executor must treat all beneficiaries fairly and avoid any conflicts of interest that could compromise their decisions.
Keeping accurate records	It is essential to maintain detailed accounts of all financial transactions related to the estate administration.

Potential Consequences When an Executor Fails to Perform Their Duties

Financial Losses & Asset Devaluation for the Estate

When an executor fails to carry out their duties in a timely manner, the deceased estate can suffer significant financial harm. Prolonged delays in the administration process can lead to the depreciation of assets, such as property or investments, which negatively impacts the overall value of the estate.

Mismanagement by an executor may also result in other direct losses. For example:

• Assets might be sold for less than their market value.
• Important deadlines for paying taxes and debts could be missed.

Furthermore, if the probate process is unnecessarily delayed:

• Creditors may start legal proceedings to recover outstanding debts.
• Costly litigation may follow, further reducing the value of the estate available to beneficiaries.

Personal Liability of the Executor for Losses Incurred

An executor has a fiduciary duty to act in the best interests of the estate and its beneficiaries. If an executor breaches this duty through negligence or mismanagement, they can face executor personal liability for any financial losses the estate incurs as a result.

This personal liability means that if an executor’s actions or inaction cause the estate’s value to decrease, they may be required to compensate the estate from their own personal funds.

Courts take breaches of fiduciary duty seriously and can order the executor to repay any amount lost due to their failure to fulfil their duties properly. For instance, a court may hold an executor personally liable for losses after they mishandled assets and failed to keep accurate records.

Stress & Financial Hardship for Beneficiaries

The failure of an executor to perform their duties not only affects the estate’s finances but also places a significant emotional and financial burden on the beneficiaries, making it important to understand what your rights as a beneficiary are in NSW.

When the administration of a deceased estate is delayed, it can cause considerable stress and uncertainty for the family during an already difficult time.

Moreover, these delays can lead to serious financial hardship, particularly for beneficiaries who are relying on their inheritance for their living expenses. A delayed distribution of assets can disrupt their financial stability and prevent them from receiving the support intended by the deceased’s will.

Steps Beneficiaries Can Take When an Executor Fails to Act

Communicating Concerns Directly with the Executor

When an executor fails to carry out their duties, the initial step for a beneficiary is often to raise concerns directly with them. A frank and constructive conversation can sometimes clarify expectations or reveal the reasons for any delays.

This approach may prompt the executor to rectify their behaviour without the need for legal intervention. Often, an executor may not fully understand the scope of their responsibilities or the impact their inaction is having on the beneficiaries.

Direct communication provides an opportunity to resolve misunderstandings and encourage the executor to fulfil their duties in administering the deceased estate.

Seeking Legal Advice & Mediation to Resolve Disputes

If direct communication does not resolve the issue, it is important to seek professional legal advice. A solicitor specialising in wills and estates can help you understand your options and represent your interests if the executor continues to be unable or unwilling to act.

Mediation can also be a valuable tool for resolving conflicts in a structured environment. A neutral mediator can help facilitate discussions between beneficiaries and the executor to find a mutually acceptable solution, potentially avoiding costly and time-consuming court proceedings.

Should these efforts prove unsuccessful, formal legal action may be the only remaining option. This can involve applying to the court to:

• Give directions on how the estate should be administered.
• Remove the executor and appoint an independent person to take over.
• Seek financial compensation for any losses the estate has suffered.

It is crucial to obtain legal advice before starting court proceedings. The court’s primary goal is to protect the deceased estate, and if your application is unsuccessful, you could be held personally responsible for the legal costs involved.

Applying to the Court to Remove or Replace an Executor

Passing Over an Executor Before a Grant of Probate

If an executor is unable or unwilling to act before a Grant of Probate has been issued, an interested party can apply to the Supreme Court to have them “passed over.” This process removes the nominated person before they officially begin to administer the deceased estate.

Such action is often necessary when an executor has lost the capacity to fulfil their duties. Under sections 74 and 75 of the Probate and Administration Act 1898 (NSW), the Court can appoint another suitable person if it is deemed necessary or convenient for the proper administration of the estate.

To support an application to pass over an executor, you must provide evidence demonstrating why the executor is unfit to act. For example, this might include:

• Medical reports to prove a lack of mental capacity
• Other documentation showing the executor cannot fulfil their role

Removing an Executor After Probate Is Granted

Even after a Grant of Probate has been issued, it is possible to have an executor removed if they fail to carry out their duties. If an executor becomes incapacitated, neglects their responsibilities, or mismanages assets, a beneficiary or another interested party can apply to the Supreme Court to have them removed. This action brings their appointment to an end.

The court does not take the removal of an executor lightly, as its primary goal is to protect the deceased estate. Therefore, strong evidence must be presented to justify why the executor is no longer suitable for the role.

If the application is successful and the executor was the sole appointee, the court will appoint a suitable alternative administrator to finalise the estate.

Grounds for Removal Including Incapacity & Misconduct

A court will consider removing an executor for various reasons that jeopardise the proper administration of the estate. The decision is based on what is in the best interests of the beneficiaries and the estate itself. An executor may be passed over or removed if they are found to be unfit to perform their duties.

Common grounds for removal include:

Grounds for Removal	Description
Incapacity	The executor lacks the mental or physical capacity to understand and perform their legal obligations, or is of unsound mind.
Neglect of duties	There has been an unexplained delay, a failure to act with due diligence, or the executor has not taken steps to prove the will.
Misconduct	The executor has misappropriated assets, interfered with the estate, or engaged in inappropriate conduct.
Conflict of interest	The executor’s personal interests conflict with their duty to the beneficiaries.
Bad character	The executor has, for example, committed a serious crime.
Location or availability	The executor is overseas for a prolonged period or has disappeared.

The Importance of Consulting a Wills & Estates Lawyer 

How Legal Professionals Assist with Estate Administration

Engaging a lawyer can help an executor avoid delays and ensure they fulfil their duties correctly. Many executors are chosen for their trustworthiness rather than legal expertise, which means they may struggle with the complexities of administering a deceased estate.

Professional guidance offers several benefits, including:

• Helping executors understand their legal obligations
• Streamlining the probate process

A wills and estates lawyer also ensures compliance with all responsibilities. This support is crucial for:

• Preventing an executor from breaching their fiduciary duty
• Avoiding personal liability for any losses the estate might suffer due to mismanagement or unnecessary delays

Seeking Legal Advice When Disputes Arise

When an executor fails to carry out their duties, beneficiaries should seek legal advice to understand their options. A solicitor can represent your interests if the executor is unable or unwilling to act, especially when direct communication has failed to resolve the issues.

Legal representation is essential if you need to apply to the court to have an executor removed or replaced. An experienced lawyer can guide you through the complexities of court proceedings and help gather the necessary evidence to protect the deceased estate and your inheritance.

Conclusion

When an executor is unable or unwilling to act, it can lead to significant financial losses for the deceased estate and considerable distress for beneficiaries. Fortunately, beneficiaries have legal options available, from direct communication to applying to the court to remove an executor who fails to carry out their duties, ensuring the will is properly administered.

If you are facing challenges with an executor who has failed to fulfil their duties, it is crucial to seek professional guidance to protect your inheritance. For trusted expertise, contact the specialist Wills and Estate Planning lawyers at PBL Law Group in NSW and Sydney today to ensure the deceased estate is safeguarded.

Frequently Asked Questions