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Choose your executor carefully to avoid problems

Catchwords: Wills, estates, family provision, testamentary trust, estate, executor, litigation, can’t easily remove an executor, bad faith

Providing for infant children in your will involves making some very special choices. Who do you appoint as executor of your estate and what about a testamentary trust under the will for the kids? If these choices are made unwisely your children could think that you’re running the farm from hell, rather than from heaven – your rightful place.

As to the appointment of your executor, keep in mind that it is difficult for a beneficiary, in New South Wales, to remove an executor if they don’t want to go. There is no express statutory power to remove an executor for misconduct. Instead, the court has to rely on its inherent jurisdiction to remove an executor by revoking the grant of probate and appointing somebody in substitution.

The court looks for special circumstances. These include prejudice to the interests of beneficiaries by a lack of due and proper administration by the executor putting the estate in jeopardy. Ill health, mental illness, or conduct showing that the executor is virtually useless may be reasons. But often this is not easy to prove and successful cases are rare and expensive to litigate.

If the executor you choose dies, then it will be the executor of the executor’s estate that will have the administration of your estate, and so on. This requires consideration of “down the road” executors, since this may involve inter family turmoil and politics, particularly if the estate has a substantial farm asset.

How fair will a non-blood relative be in the administration of the estate of your child? When the estate is fully administered, you may decide to have a testamentary trust under your will of, say, the farm asset, or one may arise by law. You may decide that you don’t want your child to have the farm at the age of majority, which is 18 years of age.

It is difficult for beneficiaries to compel trustees under standard wills to exercise discretionary “powers” and do particular things, for instance, pay money to some special expenditure, if they don’t want to.

You need some sort of bad faith or misconception on the part of the trustee. This is to be contrasted to “duties” under a will’s trust, which the trustee must do and can be compelled to do.

Conflicts can arise, particularly if the executor is also the trustee, and this is passed on to non-blood relatives.

See a solicitor or barrister and consider these issues and save your child costly litigation.

Jonathan de Vere Tyndall

Article updated 7 January 2015, originally published in The Land on 2 September 1999

Editors note: The articles published contain comment only and not legal advice, for which you should retain a solicitor. No responsibility is accepted for the accuracy of the contents.