Choose Executors for your Will with care: Lessons from the NSW Supreme Court in Wise v Barry (2018)

Background

The Supreme Court of NSW recently removed a co-executor to an estate so that the administration of the estate could be finalised. The case of Wise v Barry: The Estate of Robyn Margaret Wise (2018) NSWSC 1726 demonstrates the importance of those making a Will choosing executors with care. Failure to do so increases the risk of disputes leading to delays and extra costs. But who do you choose?

Key Facts

Ms Wise, who died in 2011 aged 60, was survived by her two adult sons and her de facto spouse. The woman's principal and only asset of worth was her home on the NSW coast valued at $245,000 at the time of her death.

Ms Wise had lived there with her de facto spouse for about 15 years. She had made her last Will in 1998. This Will appointed her de facto spouse and one of her sons as co-executors. The property was to be shared between her two sons, as a joint party, and her de facto spouse, receiving half each.

The co-executors were unable to work together, and over six years later the matter of selling the property had still not been settled. The spouse continued to live at the property and re-married in 2016 bringing his new wife and her children to live in the property.

Because the property remained in the name of the deceased, it could not be sold without agreement between the co-executors.

As a result of the impasse, the son who was co-executor, commenced proceedings to remove the de facto spouse as a co-executor and order him to leave the property so that it could be sold and the proceeds distributed.

Proceedings commenced in the NSW Supreme Court in late 2017. The de facto spouse, however, contested the Will and claimed that he should be the sole beneficiary of the property. He sought a family provision order because, as the de facto spouse, the property had been his home for many years. He claimed that Ms Wise had promised the property would always be his home. Moreover, he argued, he had made significant contributions to the running of the property both while his partner had been alive and since.

Key Issues

The NSW Supreme Court, using its inherent power to revoke a grant of probate and remove an executor, ordered that Mr Barry, the de facto spouse, be removed as executor meaning that Ms Wise's son would be the sole executor. The claim for the family provision by Mr Barry was dismissed, and an order was made for vacant possession so that the administration of the estate could finally be brought to a conclusion.

The Court can remove an executor when it is determined that the executor is thwarting the proper administration of a deceased's estate and they are not considered a fit and proper person to carry out their duties. The circumstances of each case will differ, but the breakdown of the relationship between the co-executors was indicative that they would not be able to cooperate sufficiently to finalise matters. Moreover, the de facto spouse was actively preventing this and, in contradiction of his duties, preferring his own interests to those of other beneficiaries.

As for the family provision claim, it was “out of time”. Claims must be made within 12 months after the deceased’s death unless the parties involved consent or sufficient cause is shown for the delay. The spouse had not demonstrated sufficient cause, making the claim after six years even though he had sought legal advice in that time on numerous occasions. Although the sons were comparatively better off financially than Mr Barry, the sons would be prejudiced if the claim were to be allowed and the de facto spouse had already benefitted having lived in the property rent-free.

The Court also commented on the disproportionate legal costs for what was a relatively small estate with total expenses of almost $130,000 caused by the obstinacy of the parties.

What Does it Mean?

The case demonstrates the importance of selecting executors to avoid unnecessary costs and delays and highlights the need for proper estate planning to deal with the family home where there may be conflicting interests.

Considerations as to who to appoint include: should there be more than one executor; should you appoint a beneficiary who may have an incentive to act expeditiously; or should the will-maker appoint an independent professional? Generally speaking, more than one executor is to be preferred even where a surviving spouse is to inherit everything and seems the obvious choice. In case both spouses die in a common accident, substitutes should be nominated. Some further matters for consideration are:

1). Age

 Selection of executors by age can matter. It is important to select people who are likely to survive you and are fit and capable of the task. For couples in their 60s or 70s when many people will be reviewing Wills made at the time of marriage the obvious choice may be to appoint their adult children to act with a surviving spouse. However, not everyone has children and even if they do they may not get on well together, are financially irresponsible or otherwise poorly qualified to take on the role.

2). Family Friction

 Friction in a family can lead to other problems. Choosing one child over another because they are more “sensible” may cause the others to feel wounded, resentful and possibly uncooperative. There may also be issues then arising with the division of some assets.

3). Problematic Assets

 Issues can arise when executors have to decide on the division of certain assets such as property or a farm. For example, if one child wants to farm the land, how do you ensure other children receive a fair share? Control of a family company can also cause issues. Independent executors who do not have a conflict of interest may provide a solution.

4). Professional Executors

Appointing professional executors may be justified to avoid disputes and provide the necessary skills to deal with tricky legal issues.

Choosing executors may not be simple, and over time the choices made will benefit from regular review as the family changes and your personal assets increase and become more complex.

Contact Us

Szabo & Associates Solicitors can offer expert advice on a wide range of legal matters including estate planning, making, updating or contesting a Will and preparing a Power of Attorney. Please call George Szabo on 02 9281 5088 or fill in our online contact form.