An executor is the person appointed under a Will to oversee administration of the estate of a deceased person. An administrator plays a similar role however is appointed by the Court when a person dies intestate (without a Will) or the appointed executors under the Will are unable to act.
Whether acting as an executor or administrator, the legal personal representative of a deceased person will deal with third parties such as accountants, financial advisors, creditors and agents to oversee the proper distribution of the estate to the beneficiaries.
The administration of an estate where a valid Will has been left usually runs reasonably smoothly, under the guidance of a wills and estate lawyer. However, sometimes the terms of the Will may be challenged and an executor will need to deal with this.
A claim on a deceased estate can be daunting in already difficult circumstances. An executor who is also a beneficiary (which is often the case) will be faced with conflict and the person claiming is usually known by the executor and often a relative.
The following is a summary of how a family provision claim is made, the obligations of the executor or administrator in such circumstances, and how a lawyer can assist an estate facing a claim. The information is general only and you should obtain professional advice relevant to your specific circumstances.
Family provision claims
The terms of a Will, or the proposed administration of an estate under the laws of intestacy, may be contested under family provision laws.
A family provision claim may be made by an ‘eligible person’ which varies from state to state, but generally includes a spouse or de facto partner of the deceased, a biological, adopted child or step-child, and certain other categories of persons under specified circumstances. A lawyer will explain whether a person intending to make a claim is eligible to do so.
Strict timeframes apply for making a family provision claim, and the time limit will only be extended on application and in exceptional circumstances.
An eligible person must show that the deceased owed a moral obligation to provide for him or her and failed to do so. The Court must be satisfied that the claimant was left without adequate provision for his or her proper maintenance, education and advancement in life.
A number of factors are considered when assessing a claim including the terms of the actual Will and any evidence of the deceased’s intentions with respect to the claimant, the nature and length of the relationship between the claimant and deceased, the size of the estate and the competing financial needs between the claimant, other eligible persons and the beneficiaries.
If a family provision claim is successful, the Court can order an adjustment to the terms of the Will to satisfy the claim.
What are the obligations of the executor?
Generally, an executor has a duty to uphold the terms of the Will and to preserve the assets of the estate. The executor must also consider the consequences of a successful claim. A decision needs to be made as to whether to admit the claim and try to settle it (preferably through mediation to avoid the costs of litigation) or to defend the claim.
Indeed, some claims may be morally justified by applicants who may not have been adequately provided for, and the Will of the testator may not reflect what he or she really intended had all the circumstances been known.
An informed decision regarding the likely success of a claim should be made with the guidance of a lawyer. Each case is assessed on its merits and a lawyer will look at the relevant facts and advise on the options of compromising or defending a claim. Depleting estate assets through expensive litigation should be avoided.
Conclusion
Family provision claims are complex and executors or administrators must weigh up the advantages and disadvantages of defending or attempting to settle a claim. This can be achieved with the assistance of an experienced lawyer.
If you are an executor or administrator, you should seek legal advice immediately if you think that a claim may be brought against the estate.
If you or someone you know wants more information or needs help or advice, please contact us on (07) 4724 1152 or email [email protected].