When administering an estate, the obligations of an administrator or executor (collectively referred to as the Personal Representatives or “PRs”) must administer the estate with reasonable care and skill, within a reasonable timeframe, and in accordance with the terms of the will or the intestacy rules, according to B P Collins’ contentious probate team.
Whilst ‘executors’ are referred to below, the rules apply equally to administrators where there is no will.
What is a reasonable timeframe to administer an estate?
The time which is reasonable to administer the estate depends on the estate itself. In simple estates the administration may take only a few months. However, if there are complicating factors such as many beneficiaries, complex trust arrangements, foreign assets, high value investments, business or agricultural property or assets, or claims against the estate, administration might reasonably take several years to complete.
In most estates the rule of thumb is that administration should be completed within the “executor’s year”, meaning within a year of the date of death.
Delays at the probate registry in recent years have meant that administration has taken longer, through no fault of the executors, because it has taken four months or longer to receive a grant of probate after the application for probate has been lodged. The probate registry has been working hard to clear the backlog and at the time of writing the estimated timeline is that most estates should receive their grant ‘within’ 16 weeks of submitting the application.
Can an executor delay probate?
In some cases, the executor might be advised to delay distributing the estate for a specific period. In general, an executor is advised to wait:
- Two months after placing statutory advertisements. These are notices that the estate is being distributed and inviting unknown claimants and creditors to come forward to make their claims against the estate known; and
- At least six months from the date of the grant of probate or letters of administration which is the limitation for anyone to issue a claim for reasonable provision from the estate under the Inheritance (Provision for Family and Dependants) Act 1975 (1975 Act Claims). In cases where claims are more likely, executors may be advised to wait up to 10 months after the date of the grant because whilst claimants have six months to issue their 1975 Act Claims with the court, they then have a further four months to serve those claims.
It will usually not be unreasonable for an executor to delay probate or not to make interim distribution where:
- They have been professionally advised to wait for the reasons set out above;
- They are aware that there are claims against the estate or issues between the beneficiaries which have not been resolved;
- HMRC has raised queries about the tax paid or payable by the estate;
- The executors believe that there are further assets to be collected or additional liabilities to be paid by the estate.
When would it be unreasonable for an executor to delay probate?
There are circumstances where executors are delaying, and it is not reasonable to do so. These include:
- The executor has taken no steps to administer the estate or apply for probate, and there is no reason not to do so;
- The estate is suffering a loss, for example, because assets are falling in value or property is falling into disrepair;
- There are no disputes between the beneficiaries;
- More than 10 months has passed since the grant was issued and no 1975 Act claims have been brought;
- The executor is unable to provide any reason for their delay.
Can executors be forced to make interim distributions?
In some cases, there may be reasons for the executors to withhold some of the estate but make an interim distribution of some of the inheritance. For example, if the executor has sold all of the estate properties and is holding the proceeds in cash. There may be some minor outstanding issues such as HMRC confirming the final balance of the tax payable. In these circumstances, the executors may make interim distributions, holding back a cautious amount to cover any final amounts owing including tax, and legal or other professional costs.
However, whether and when to make interim distributions – and how much to distribute – is a matter for the executor to determine and the beneficiaries cannot force them to do so.
On the other hand, if an executor has completed the administration but is holding onto funds without any reason to do so, the beneficiaries may have claims against the executor for breach of duty. The court in those circumstances would likely order that the executor pay the outstanding amounts to the beneficiaries and compensate the beneficiaries for any loss incurred (for example, the executor would likely be ordered to pay interest for the period in which they unreasonably withheld payment).
What can be done about an executor who is delaying?
Unreasonable delay may be grounds for a claim for breach of duty. In the case of professional executors (for example, solicitors) there may also be a claim in professional negligence. However, the beneficiaries bringing that claim would often need to show that a loss had been caused to them or the estate by the delay. Sometimes this may be clear, such as interest and penalties on late or unpaid inheritance or income tax. In other cases, loss may be difficult to prove, especially where the executor argues that there was good reason to delay.
In most cases what the beneficiaries actually want is for the estate administered. Often the quickest and most cost-effective way to achieve this is to have the executor removed and someone else appointed in their place. This can be achieved by an application under s50 Administration of Justice Act 1985. In many cases it may be appropriate that a professional solicitor is appointed in place of the removed executor to finalise the administration of the estate. There is usually no need to prove that a loss has occurred to bring a successful application for removal. The court simply needs to be satisfied that the executor has not complied with their obligations (for example, by unreasonably delaying the administration) and / or that the administration of the estate is hamstrung.
Who pays the costs of an application to remove an executor?
The costs in any litigation claim are a matter for the determination of the court. However, the general rule applies to s50 claims as to any other claim. This is that the unsuccessful party will usually pay the costs of the successful party. However, there are some nuances. For example:
• If the executor disputes the application and is removed by the court, they will often be ordered to pay the costs personally.
• If the executor has good reasons to have delayed (such as ill health preventing them from administering the estate) but is still removed, the court may order that the costs are paid from the estate.
• If the executor agrees to be removed, the court may order – or the parties may agree – that the costs are paid from the estate.
• If the beneficiaries are unsuccessful in their claim, the costs may be paid from the estate or from their share of the estate.
Applications for removal of executors can be complex. Our specialist Contentious Probate solicitors can advise in relation to claims, having substantial experience acting both for claimants and defendants in s50 applications.
If you are concerned about executors delaying the administration of an estate or you require any advice regarding claims against a PR or an estate, please contact the contentious probate team at B P Collins by emailing enquiries@bpcollins.co.uk or calling 01753 889995.
