“I am the residuary beneficiary of an estate. The Personal Representatives are not being transparent or forthcoming with any information. I fear that they are not administering the estate correctly. Is there anything I can do?”

This question is one often asked by a beneficiary keen to understand their ability to obtain information concerning an estate that they have an interest in. A beneficiary is often anxious to determine whether there is any action they ought to be taking where, in their view, a Personal Representative is failing to administer an estate properly.

What are the duties of Personal Representatives?

Personal Representatives (that is to say, the executors appointed by Will or, in the absence of a valid Will, the administrators appointed by virtue of the Intestacy rules) are under a duty as set out under the Administration of Estates Act 1925. They must collect and get in the real and personal estate of the deceased and administer it according to the law.

Personal Representatives have a duty to account to residuary beneficiaries and this is often achieved by way of formal estate accounts. Estate accounts ordinarily detail the assets as at the date of death, the costs incurred by the estate during the administration period, any funds received during the administration period and the account balance being held.

A Personal Representative who fails to carry out any part of their duty can be in breach and exposed to a claim. Personal Representatives who, through their own negligence and default, cause a loss to an estate will be exposed to a claim by a beneficiary. This could be due to several reasons such as, a failure to carry out the provisions of a Will or perhaps selling assets at an undervalue and thereby failing to maximize the value of an estate.

Although a Personal Representative is protected by an indemnity from an estate, an action can be brought for any breach. If found liable, a Personal Representative will be ordered to pay their costs and the beneficiary’s costs personally without the protection of an indemnity.

If, in the view of a beneficiary, a Personal Representative is failing to administer an estate then one of the most aggressive options available is to apply to the Court to seek their removal and appoint replacements.

Removing Personal Representatives

An application can be made under section 41 of the Trustee Act 1925 with the request that a Court make an Order appointing a new Personal Representative. The Court will only use this power where there are serious problems, such as a breach of duty, or serious friction between the parties.

Separately, under section 50 of the Administration of Justice Act 1950, the Court has discretion to appoint a new Personal Representative in substitution for some or all of the existing Personal Representatives.

Such action – either under section 41 or section 50 – has a high degree of risk for any beneficiary. If the Court does not find in their favour, then a cost’s order is likely to be made against them.

As an alternative to an application for removal, a beneficiary can consider a cheaper method, namely, an application under the Non-Contentious Probate Rules for an order for inventory and account.

The benefits of this are that it is a non-contentious procedure available in the Probate Registry, as opposed to the High Court.

Ultimately, anyone with a beneficial interest in an estate can apply at any time for an inventory and account. Application is by summons from the registry which issued the grant and should be supported by an affidavit setting out the details of the estate, the applicant’s interest in it and the reasons why an account and inventory is required.

The costs of producing an account will fall on the Personal Representatives if there is an underlying problem which justifies the production of the account (or if the cost is increased because of the way the Personal Representatives have kept the estate records).

This may have the effect of triggering the Personal Representatives into action and avoid the need for the beneficiary to take on the cost risk of seeking their removal.

Final recommendations

Before substantial costs are incurred, it is good practice to put requests for information in writing in an effort to resolve matters.

Whilst seeking the removal of a Personal Representative may appear an attractive option, we would always recommend that a beneficiary concerned over the lack of progress in the administration of an estate takes appropriate advice to consider their options.

Further information

If you do have further questions or require advice on this topic, please speak to:

• Paul Levy on +44 (0)20 7216 5584 or p.levy@druces.com