What if the person appointed as an executor of a will is not an appropriate person to act in that role?

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Posted By and on 14/12/21 at 10:54 AM

Circumstances may change from the time a person makes their Will and it becomes apparent that the person they appointed to be their executor and trustee is no longer suitable or capable to act in that role.

In Victoria, if the named executor refuses or is unable to act, to relinquish their role as the executor, there are legislative provisions which allow an application to be made to the court to either pass over that person (which essentially means that they are not permitted by the court to apply for and be granted probate of the Will) or, if they have already been granted probate, to have them removed as the executor.

As the court does not lightly interfere with a person’s choice of executor, these applications should only be made in serious circumstances where there is sufficient evidence to show that the executor is unfit or incapable of acting in that role.

Case example – application to remove executor

The Supreme Court of Victoria recently dealt with an application on this issue in Re Vasiliades; Pappas v Vasiliades [2021] VSC 720.

The deceased was survived by her four children. Her Will appointed one of her children (the defendant) as the executor with another child as the substitute executor, both of whom resided outside of Australia.

The application for the defendant’s removal was brought by another child and supported by the substitute executor who did not want to be appointed. The defendant opposed the application with the support of the fourth child (essentially two children on each “side”).

The plaintiff and defendant children were the deceased’s attorneys (financial and medical) prior to her death and there were a number of disputes between them as to the management of the deceased’s affairs. In particular, one of the disputes related to a family property which was the subject of a VCAT proceeding. The plaintiff contended that the defendant should renounce probate due to the breakdown of the family relationship, the fact that the defendant was resident overseas, was subject to proceedings brought by the Commissioner of Taxation, had sought to intermeddle in the estate’s administration prior to probate being granted, may have or may possibly seek to unlawfully benefit from the estate and was subject to the dispute in the VCAT proceeding. When the defendant refused to renounce, the plaintiff issued proceedings pursuant to r 5.02 of the Supreme Court (General Civil Procedure Rules) 2015 (Vic) (seeking a grant in peculiar circumstances) seeking orders that the defendant be passed over as an executor and that State Trustees Limited be appointed as an independent administrator of the estate. A caveat had also been lodged on behalf of the plaintiff.

However, as the probate caveat lapsed in the meantime, the defendant sought and was granted probate.

The plaintiff alleged that the defendant improperly sought the grant without disclosing the existence of the passing over application to the Registrar. The plaintiff proceeded to amend the originating motion and summons to remove the executor.

The court considered the principles relating to section 34 of the Administration and Probate Act 1958 (Vic) which enable an executor to be removed if they remain outside of Victoria for more than 2 years or is unfit or incapable of acting as well as section 48 of the Trustee Act 1958 (Vic) which enables the court to appoint a new or substitute trustee in his or her place.

In this case, the court was not satisfied that the defendant’s conduct in applying for a grant of probate without disclosing the passing over application, nor the alleged conflict between his duty and interest, was sufficient to have him removed as an executor as the plaintiff failed to provide sufficient evidence to substantiate her claims. The fact that the defendant was also resident outside of Victoria was also not sufficient as he must have been overseas for two years from the date of the grant (which time had not yet expired). The reason the VCAT proceeding was not considered sufficient for removal was that the defendant was not actually a party to the proceeding and the estate did not actually have an interest in the proceeding.

Questions

This case demonstrates that there are a number of legal avenues that can be pursued in this type of situation. Whilst it is certainly possible for the court to make orders either passing over or removing an executor, as it has done so on a number of occasions, the basis for the application and strategy should be carefully considered. It’s also important that the parties not assume that the costs of both making the application and opposing the passing over application will be paid out of the estate. It is within the discretion of the court as to who pays the costs, and the court is at liberty to make orders as it considers appropriate (including ordering costs against parties personally).

Please do not hesitate to contact us should you or someone you know find themselves in a situation where you consider that an executor is incapable or unfit to act. We would be happy to discuss the provisions with you in more detail.

KHQ Lawyers - Rachael Hocking

Rachael Hocking Special Counsel

Rachael is a highly experienced Wills & Estates lawyer.  She is an accredited specialist in Wills & Estates with the Law Institute of Victoria, and is also a full member of the Society of Trust... Read More

Ines Kallweit Principal Solicitor & Notary Public

Ines Kallweit leads our Wills & Estates team.  She is an Accredited Specialist in Wills & Estates (with the Law Institute of Victoria), a member of the Society of Trust and Estates Practitioners,... Read More