When a person dies, someone needs to take responsibility for dealing with their estate and distributing their assets. This person is known as an administrator, or they may also be called an 'executor' if they were named in a will.
The vast majority of estates and trusts are administered with no issues, but this isn't always the case. Even if the process starts harmoniously, problems can arise that result in one or more of the beneficiaries having concerns about the suitability of the administrator or administrators. Tensions can quickly build and cause serious complications which is why we see people wanting to contest a will.
The same issue can arise with trustees. It may be that a trustee feels a fellow trustee is being obstructive. Alternatively, it could be that one or more of the beneficiaries do not feel one or all of the trustees are acting properly.
There are steps that a concerned individual can take to resolve the situation. In the most extreme circumstances, this could involve court action to remove an administrator or trustee from their role.
What is the problem?
The steps that can be taken to resolve a disagreement in estate administration will largely depend on what the problem is.
The relationship between those involved in the administration of an estate and/or running of a trust is often filled with emotion. One or more people control money and/or other assets that ultimately belong to someone else. It's also often the case that those in control may also benefit from the money or assets alongside others. It is easy to see why this can result in disagreements. In the most hostile circumstances, a desire arises to control taken away from the people in charge.
Removing an executor, administrator or a trustee from their role should be seen as a last resort. Often, issues can be resolved without the need for removal, and sometimes, the court can step in to order directives to resolve the matter.
However, if a matter is too complicated for this, or relations are so fraught that the parties are unable to work together, removal may be the only option.
Who can make a claim?
Anyone who is affected by the actions of the problematic executor, administrator or trustee can make a claim for removal. This includes co-administrators, executors or trustees, as well as beneficiaries.
It is not uncommon for co-administrators, executors or trustees to fall out, especially when they are also beneficiaries.
What do you have to do?
Firstly, it is important to always bear in mind that the courts strongly encourage parties in a dispute to try and resolve matters between themselves. This applies to issues between administrators, executors or trustees and those they are working with and those they are working for.
The courts tend to frown on parties who rush into making a claim without first taking all reasonable steps to resolve the situation amicably. Parties who the court deems guilty of acting unreasonably may be penalised when it comes to the recovery of their costs from another party, even if they are ultimately successful in getting the other party removed from their role.
As such, we almost always recommend first writing to the executor, administrator or trustee who is causing problems, setting out in detail what the issues are and how we consider they could be resolved.
Exchanging letters back and forth may seem like a longwinded process, but it is an important stage because even if the situation is not resolved amicably and court proceedings have to be commenced, the paper trail is essential in demonstrating to the court that:
- (a) you have acted reasonably in trying to resolve the situation and
- (b) it is the other party's conduct that has meant court proceedings have to be commenced.
The court will be far more inclined to order an administrator, trustee or executor's removal if they can see from correspondence that the issues appear incapable of being resolved otherwise.
It is also worth bearing in mind that in most circumstances, even if an administrator, executor or trustee agrees to step away from their role, an order from the court will be required. This is because an administrator, executor or trustee is not allowed to simply walk away once they have assumed the role and accepted the responsibilities. But if an agreement can be reached with the administrator, executor or trustee that they will be removed, the court application is usually a lot more straightforward as it is made on a consensual basis. Only in the rarest of cases would a final hearing then be required.
Assuming stage 1 has been completed and no amicable resolution is achieved, someone looking to remove an administrator, executor, or trustee will have to decide whether to issue a court claim. This is not a decision to be taken lightly, not just due to the time, emotion and cost involved but also because there are always risks.
Whilst you and we may be convinced that the problem administrator, executor or trustee should be removed, the court may disagree. Of course, we would not advise anyone to proceed with this course of action unless we consider it appropriate, but some situations are clearer than others.
For example, if a trustee has sold trust assets to a contact of theirs for less than market value without the consent of the beneficiaries, this would be a good reason for them to be removed as trustee. Unfortunately, not every situation is so obvious.
It is not uncommon for beneficiaries to lose faith in trustees because they feel they are being secretive - but trustees do not have to share everything with the beneficiaries. In those circumstances, we would have to consider whether, on balance, it is in the interests of the trust as a whole for the trustees to remain in place (perhaps with some direction from the court as to what documents they should share with the beneficiaries) or whether it would be best that they be removed.
We can never predict with 100% certainty what a court will decide, but there are steps we can take to mitigate the risks of being unsuccessful.
For example, we can offer the court options as to what order it makes. Removal of an administrator, executor or trustee may be our preference, but we can include an alternative option, which usually involves asking the court to direct that the administrator, executor or trustee must do certain things. This could require them to obtain an additional valuation of an asset to ensure it's not being undervalued or restrict them from deducting certain expenses incurred.
If it is a co-administrator, executor or trustee making the application, it can be advantageous to also offer the court the option of an entirely independent person being appointed in place of all current administrators, executors or trustees. This can be an appealing option for the court, especially if it is clear that leaving one administrator, executor or trustee in place is likely to cause further problems in the future.
Once we have decided what we are going to ask the court to order, we have to prepare the application. An application to remove one or more administrators is made under section 50 of the Administration of Justice Act 1985, while an application for the removal of trustees is made under section 41 of the Trustee Act 1925.
Claim form
The claim form is a formal document that sets out the names of the parties and what we are asking the court to order. We would prepare this on your behalf and then ask you to approve its content.
Witness evidence
It is important that we include witness statements for all those who are making the claim, as this is the only real opportunity we will have to explain to the court why it should make the order we are asking for, other than at any court hearings. We have to set out the background to the matter, identify the issues, and explain how we have got to this point. We also have to include copies of all relevant documents, such as a copy of the will, grant of probate, trust deed, etc.
A witness statement is a very important document, and it is crucial that it is an accurate record of events. If a claim does go all the way to a final hearing, the court may not require witnesses to give oral evidence and may simply rely on the witness statements. As such, we need to make sure it includes all relevant information and documentation.
A draft of the order we want the court to make
Usually, when you first submit your claim, you include a draft of the order that you are asking the court to make. This does not mean you will necessarily get everything that is included in the order, but it is considered a starting point from which the court will then make its final order. It is important that the order is as accurate as possible, but it is only a draft, so it can (and most likely will) be amended before the court makes its final order.
Once the above documents are all in order, they can then be issued at court and, once accepted by the court, served on (i.e. sent to) the other parties.
After this, the claim is in the court system, and there are certain deadlines that the parties must comply with. The first of these is the deadline for the defendants to the claim to respond to it. They usually have two weeks to do so, though this can be extended to 28 days. Once they have responded, we will know whether they intend to contest the claim. If they don't, it may be that the application can be tweaked so that it is consensual.
Relatively soon after this, the court will set a first court date. This is for a short hearing that usually only the legal representatives attend. It is generally held by video/telephone call, and the purpose of the hearing is to make sure everything is in order before the final hearing and for the parties to request the court to order any specific directions.
After this, the claim will proceed to a final hearing. At the final hearing, the parties' barristers (or the parties themselves, if they have not instructed lawyers) will argue their position. The judge will then make an order as to the outcome of the claim and who should pay what costs. Usually, if an administrator, executor or trustee has opposed an application for their removal and the claimant is successful in having them removed, the court will order the removed administrator, executor or trustee to pay at least some of the other parties' costs. However, the court has discretion as to what cost order it makes.
Assuming the administrator, executor or trustee is removed, there will be steps that have to be taken. They will need to transfer any estate or trust funds they hold to either the new or remaining administrator, executor or trustee, and they will need to hand over any files they hold in relation to the estate or trust. It may also be necessary for a copy of the Grant of Probate along with a copy of the court's order to be sent to the court.
How long does it take?
This is a difficult question to answer at the outset because it will depend on how the claimant and the other parties engage with one another - and if the matter ends up in court.
Understandably, by the time lawyers are involved, tensions are usually running high. This might not, on the face of it at least, be conducive to resolving the matter swiftly and amicably. However, once they are faced with a threat of a removal application, administrators, executors, and trustees often quickly come to an agreement as otherwise, they risk exposing themselves to the risk of a costs order against them personally. However, it doesn't always work out that way.
As a rough guide, if the parties are able to engage amicably and resolve the matter without the need for contentious court proceedings, we would expect it to be resolved within a year. However, in a worst-case scenario, if the claim had to be issued at court and went all the way to a trial, it could take two years or more for the matter to be concluded.
Who pays to have them removed?
A beneficiary claimant will, initially at least, have to pay their own costs upfront. This would include our costs, the costs of a barrister, the court fees and any other disbursements incurred along the way. If the claimant is a trustee, executor or administrator, they may have access to trust or estate funds, which they can use to pay their legal costs.
However, only once the matter has been resolved a decision will be made as to who pays the costs. If the court has to make an order, the usual rule is that the 'loser' pays the 'winner's' costs. If the claimant is a beneficiary and they successfully remove an administrator, executor or trustee who is stubbornly refusing to step aside, then the court will likely order that most (but rarely all) of the beneficiary's costs should be paid by the problem administrator, executor or trustee personally.
However, if it considers the administrator, executor, or trustee has not acted unreasonably, then it may order that the costs be paid from the estate or trust fund. It will largely depend on the facts specific to each case, but it would be unwise to assume that if you apply for the removal of an administrator, executor, or trustee, you will recover all your costs from another party or the estate or trust. You also need to be aware that the court may order that a trustee, executor or administrator is entitled to recover their costs from the trust or estate, which may mean reducing the funds available to you if you are a beneficiary.
When can you apply for removal?
There is no real deadline by which you have to apply for their removal, but it is worth noting that you cannot apply for their removal before the deceased person has died (in the case of an estate) or before the trust has been set up.
Reasons people may be removed
- An administrator or executor is refusing to communicate with the beneficiaries of an estate. After making all reasonable efforts to engage with them (e.g. sending letters, emails, attempting to call them, inviting them to meet), it may be appropriate to apply for their removal.
- An executor or administrator is threatening to do something which goes against the terms of the will, or they have actually done something that goes against the terms of the will. This could be anything from paying for illegitimate expenses, giving cash assets to people who aren't entitled to them, using estate assets in a way they shouldn't, or not giving an estate asset to those who should receive it.
- There are suspicions as to actions that an executor or administrator took during the person's lifetime, which need investigating. It is not unusual for the same person who was appointed as attorney for the deceased person to also be their administrator. If it comes to light that there is reason to believe that person may have abused their powers whilst acting as an attorney, it may be that the estate should actually be worth a lot more. It would be inappropriate for that person to investigate the matter, so a replacement may be needed. They would need to be removed to allow this to happen.
This list is not exhaustive. There can be any number of reasons why an administrator or executor should be removed. Each case will be fact-specific. But the fundamental question is whether the administrator, executor or trustee in question has compromised their independence. If they have, arguably, they should be removed.
Can I remove myself?
It is not always the case that it is a co-administrator, executor or beneficiary wanting a person to be removed. Sometimes, the person who is named in the will as administrator or executor oes not want to do the job, or perhaps they may have wanted to do it, but then dealing with the estate became more complicated or hostile than they expected.
The question of whether they can step aside of their own volition or whether the court's permission is required will depend on how involved they have been in the estate administration. If an administrator has 'intermeddled' - which essentially means that they have dealt with estate assets in such a way that they cannot simply walk away - the permission of the court will be required.
If someone named as an executor in a will wishes to step aside as soon as the testator has died, then they can do so without the court's permission. They would need to sign a deed of renunciation.
How much does it cost?
This is the question that most people ask, but it is very hard to answer as the costs will largely depend on the following:
- Whether the involvement of the court is needed.
As above, it can be possible for an executor named in a will to step aside without the need for the court to be involved. If everyone is in agreement, this can cost as little as a few hundred pounds. However, if the court's permission is required, it will cost significantly more (see below).
- Assuming the court's involvement is needed, a key factor will be whether the application for removal is contested or not.
If all parties are able to agree that one or more administrator(s)/trustee(s) should be removed, the application can be made on a consensual basis and is likely to cost a few thousand pounds. However, this would just be for the application itself. Usually, there is a pre-application stage, during which correspondence is exchanged and negotiations are had. The cost of that initial stage will depend on how quickly the parties are able to reach agreement. It could cost several thousand pounds.
If agreement cannot be reached, the application will cost significantly more as the party making it will need to prepare evidence persuading the court that the administrator(s)/trustee(s) should be removed. The administrator(s)/trustee(s) would then need to decide whether to defend the application. If they did, and the case went all the way through the court system to a final hearing, the costs could easily exceed £100,000.
However, most cases settle prior to a final hearing, but the costs would still likely be tens of thousands of pounds.
- An additional point to bear in mind is that if one or more administrators or trustees are removed, it may be necessary for a replacement to be appointed. Usually, this is a professional who would be entitled to charge for their time in administering the estate or trust.
Case studies
Mr P
Our client was one of three trustees of an estate. The other two trustees were unable to agree on how the discretionary trust created by the deceased's will should be administered. This resulted in a deadlock. Our client applied for their removal, which ultimately they consented to. As our client remained a trustee, there was no need for a replacement to be appointed.
Ms M and Ms T
Our clients were appointed as executors and trustees of their parents' estate along with a third sister. However, the third sister refused to work with them to administer the estates. We initially sought directions from the court on the basis that this was deemed more proportionate than a removal application, but their failure to comply resulted in a removal application. The application was made on a consensual basis as the executor and trustee in question accepted their need to be removed.
