Farlow v Fincher; Estate of Fincher  NSWSC 1515
The New South Wales Supreme Court was again asked to consider whether the conduct of an executor should result in that executor being removed.
The deceased died in 2009 and appointed her son and daughter the executors of her Will. The son and daughter applied for a Grant of Probate and commenced the administration of the estate. The Will left some specific bequests to various beneficiaries, with the residue of the estate to be divided equally between the son and daughter.
In accordance with the Will, after the payment of debts, testamentary expenses and the distribution of the specific bequests the proceeds of the deceased’s bank accounts were distributed equally between the son and daughter.
The main asset of the estate was a property in New South Wales. The son had lived with the deceased on various occasions during her lifetime and moved into the property following her death. The son continued to reside in the property for two years, not paying rent or boarding fees to the estate whilst receiving the benefit of living in the property.
During that two year period, the daughter attempted to convince the son to complete the administration of the estate and to deal with the property in accordance with the Will. The daughter made many attempts to contact the son and made various offers to try and resolve the matter, including offering the son the option of buying her share of the property.
After receiving no response from the son, the daughter made an application to the New South Wales Supreme Court to have the son removed as one of the executors so that she could deal with the property and finalise the administration of the estate.
The Court considered that executors have a duty to realise assets and administer an estate with reasonable diligence and to ensure that the estate is distributed to the beneficiaries in an effective manner. When applying for a Grant of Probate, the executors make an oath to administer the estate according to law.
The Court held that the son’s inactions demonstrated that he was not a fit and proper person to carry out the duties of an executor. As such, the Court ordered for the property to vest in the daughter as the sole executor of the estate.
The Grant of Probate was revoked and a fresh grant was issued to the daughter.
Due to the conduct of the son, the Court ordered that the costs associated with the application be paid by the son personally, or from his share of the estate, rather than from the general estate proceeds.
Comment - Being an executor is a position of great responsibility. When applying for a Grant of Probate an executor takes an oath to administer the estate properly and in accordance with the law. If an executor fails to do so and abuses their power they can be personally liable, as is seen in this case. It is important that executors are aware of, understand and abide by their obligations.
This case also highlights the importance of selecting the right executors. Given the circumstances, the outcome and conduct of the son may have been different if an independent executor was appointed to act with them. Careful planning and seeking the right advice can avoid these kinds of issues.