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Life estate, probate, Wills

‘Come hither, Little One,’ said the Crocodile

The great tragedy of any will that  omits children, or provides for a grossly disproportionate split, is the difficulty to assess the whys and hows of the matter when the who is dead.

Matters can be further complicated when the sole recipient of their parent’s bounty is also the sole executor.

Consider for example Estate of Joan Courtenay relates to family protection claim by the deceased son and granddaughter where the deceased left her entire estate to another son, who was also the executor of the estate.

The sole executor who was also the sole beneficiary, was not forthcoming with information following the challenge by his brother and niece.   So what were they to do?

First up the question of conflict was addressed by the Court and it was considered necessary for the executor to be represented separately in his executor and beneficiary capacities.  McKenzie J noting in a minute referred to in the later decision referred to in this blog that:

“[3] The defendant has two distinct and separate roles in these proceedings.  The first is his role as executor.  In that role, he owes a duty of even-handedness between the plaintiffs, as claimants against the estate, and the beneficiaries of the estate.  Aspects of that duty are given statutory expression in s11A of the Family Protection Act 1055.  The duty is wider than that.  The second role is as beneficiary.  In that capacity, the defendant is able to take a partisan stand supporting the dispositions in the will.

[4] That dual role of the defendant creates a conflict of interest.  The defendant … does not consider that he has a conflict of interest.  That is wrong.  He does.  The conflict is, as a matter of law, inherent in the dual role.”

In the first instance the executor was given time to arrange separate representation of his separate capacities.  However, when he failed to do so in any meaningful way the court ordered the re-call of probate and appointed a new independent trustee and executor whose fees were to be met from the estate.  While the matter was complicated due to the international aspect of the will in question, the court was not persuaded that this ought result in a different outcome.

The case has practical and local relevance.  Will-makers are wise to consider who they leave to the execution of their final wishes and – where there are testamentary imbalances; what challenges (and costs) might arise where the sole beneficiary is the sole executor.

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References:

Estate of Joan Courtenay [2015] NZHC 2653

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