In the complex world of estate administration, particularly under the rules of intestacy, executors and administrators often face unexpected challenges that can delay distributions and expose them to personal liability.
We recently represented the surviving spouse of a deceased individual in a case that highlights the importance of proactive legal strategies to counter frivolous claims. This matter not only secured a favourable outcome for our client but also underscores how administrators can protect themselves and the estate from undue delays.
Case Background
The deceased passed away without a will, meaning his estate was distributed according to the rules of intestacy. Under these rules, the estate passed to his surviving spouse and their two children. One of the primary assets was a significant holding of shares in a private company, which formed a substantial part of the estate’s value.
Complications arose when the deceased’s mother sent a letter before action to the surviving spouse, asserting a claim against these company shares. Our initial assessment was that the claim appeared frivolous, lacking substantial legal merit. We responded robustly to the letter, outlining the weaknesses in her position and demanding evidence to support her assertions. Following our response, we heard nothing further for several months, suggesting the claim might have been abandoned.
However, as the legal administrator of her husband’s estate, our client—the surviving spouse—remained cautious. Distributing the estate while aware of a potential claim could expose her to personal liability if the claim later proved valid.
Challenges and Legal Strategy
Estate administrators are in a precarious position when faced with unsubstantiated claims. Even if a claim seems meritless, ignoring it entirely risks future litigation that could hold the administrator personally accountable for any improper distributions. In this case, the prolonged silence from the claimant created uncertainty, potentially stalling the estate’s administration indefinitely.
To address this, our team adopted a proactive approach. We issued several letters to the deceased’s mother, clearly stating that unless she formalised her claim by issuing court proceedings within a specified timeframe, we would apply for what is commonly known as a ‘put up or shut up’ order. This type of order compels a potential claimant to either pursue their claim promptly or risk being barred from doing so.
The claimant employed various delay tactics, including multiple requests for extensions of time to respond or gather evidence. Despite these efforts, we persisted, gathering compelling arguments to demonstrate the claim’s lack of substance and the undue burden it placed on the estate. Our strategy emphasised the need for swift resolution to prevent erosion of estate assets through ongoing administrative costs and to allow beneficiaries to receive their entitlements without further delay.
The Outcome
We successfully applied to the court for the “put up or shut up order”. The judge granted our request, permitting the estate’s distribution if no claim was issued by a specified date. This deadline provided a clear path forward, ensuring the administrator could proceed without fear of retrospective liability.
In addition, the court awarded costs in our favour, which are recoverable from the deceased’s mother. This not only reimbursed our client for legal expenses incurred but also served as a deterrent against similar baseless assertions in the future. The ruling affirmed our assessment that the claim was indeed frivolous and reinforced the court’s intolerance for tactics that unnecessarily prolong estate matters.
Broader Implications and Key Takeaways
This case illustrates the inherent risks of litigation, particularly for those making unsubstantiated claims. Pursuing a ‘dangerous avenue’ like litigation without solid grounds can lead to adverse cost orders and wasted resources. For estate administrators, it demonstrates a valuable tool in their arsenal: the ability to seek court intervention to force a claimant’s hand.
Nuisance claims, while rare, can disrupt the orderly administration of an estate. By initiating their own proceedings for a protective order, administrators (or executors) can mitigate personal liability and expedite distributions. This approach is especially crucial in intestate estates, where assets like private company shares may attract opportunistic challenges from extended family members.
Our expertise in probate and estate litigation ensures clients receive robust protection against such threats. We advise administrators to document all communications, assess claims critically, and act decisively to safeguard the estate’s integrity.
If you’re administering an estate and facing potential claims, or if you need guidance on intestacy rules and asset distribution then our Contentious Trust and Probate team is here to help you navigate these challenges with confidence and efficiency. Contact Paul Levy in the Contentious Trust and Probate team to discuss further or complete the form below to connect with our specialists.
