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breach of trust, supervision of trustees powers of the court, Trustees, Trusts

Executors’ obligations to account

The role of executor of an estate and the on-going responsibilities and obligations are not always well understood.  Where there is a legal advisor the executor may be well schooled in the relevant obligations and the administration of the estate can be expected to proceed in a timely and proper manner.

However, sometimes this is not the case.  Where there are beneficiaries who might be unaware of their appointment there can be few people to hold the executor accountable, especially where the executor has no legal assistance or oversight with the administration of the estate.

So what are a beneficiaries options? Firstly, if the beneficiary can if wanting to clarify matters, seek a copy of the probated will from the High Court.  So that might confirm the beneficiary’s entitlement under the estate, but how to find out what the estate comprises?

Here s 44 of the Administration Act can assist.  This section provides that a court can direct the administrators of an estate to exhibit on oath an inventory and account of the estate. What is the ambit of such an inventory?  In Jay v Gilbert & Ors France J notes regarding s 44 at [5] that:

“… There is little judicial consideration to date of s 44. That is no doubt due to it being sparingly used or needed. The purpose of the provision seems to be to confirm the role of the Court in assisting beneficiaries and others with an interest in the estate to obtain an up to date statement of the position of the estate. The nature of the information to be provided under s 44 is clarified to a certain degree by r 27.32 of the High Court Rules but there is still some flexibility. For example, what is covered by the concept of an inventory is not addressed. I accept the proposition in Reeves v Freeling that the Court has a discretion as to the nature of the inventory that will be accepted. That also suggests, as one would expect, that there is capacity for an applicant to return to the Court to request compliance with an order that has been made.”

However, s 44 does not provide a mechanism for challenging the executor’s actions.  For this the appropriate course of action might be s 83B of the Trustee Act 1956, which provides for the audit of a trust estate by or on behalf of a beneficiary of the trust estate.

The reality is that executors can have  a lot of power over the deceased’s estate and sometimes somewhat less scrutiny and supervision than might be expected.  Beneficiaries of estates should keep this in mind and if necessary take advice as to how best to supervise matters and protect their interests.

References:

  • Jay v Gilbert & Ors [2015] NZHC 1791
  • Administration Act 1969, s 44
  • In the estate of Colin Russell Gilbert HC Wellington CIV 2009-485-2354, 27 May 2013
  • Tiffin v Tiffin [1916] NZLR 656
  • High Court rules, r 27.32
  • Trustee Act 1967, s 83B
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