As discussed in our previous blog, beneficiaries can challenge the executor in certain circumstances. One such scenario is that beneficiaries may bring a devastavit claim, i.e. wasting of assets, against the executor if he/she has caused loss to the estate by a breach of duty.
The liability for this is personal to the executor rather than the estate. When taking legal action for devastavit, in addition to damages, beneficiaries can seek an account of profits, avoidance of a transaction that the executor has entered into, and/or removal of the executor from office, which is also discussed in our previous blog.
A devastavit claim may be based on:
- Misuse of assets;
For example, the executor takes assets for his/her own personal gain.
- Maladministration; or
For example, the executor fails to: (1) distribute the estate in accordance with the Will/intestacy rules; (2) account for liabilities, like debts, before making a final distribution of the estate; (3) collect and get in the deceased’s real and personal estate; or (4) fulfil his/her duties by squandering the assets.
- Negligence.
For example, the executor carries out his/her duties without taking care which would be reasonable in the circumstances.
Defences
The Court has the discretion to totally/partially relieve an executor of personal liability if he/she acted ‘honestly and reasonably and ought fairly to be excused for the breach of trust and for omitting to obtain the directions of the court in the matter in which he committed such breach’.
- Exclusion clause in the Will;
The executor may escape liability because the deceased’s Will contains a clause modifying his/her duties or excluding liability.
- Acquiescence of beneficiaries; or
An adult beneficiary who, with full knowledge of the facts, consented to an executor’s breach of duty cannot succeed in a claim against the executor.
- Protection against unknown/missing claimants.
Where the executor has distributed the estate not knowing of the existence of a beneficiary, the executor is personally liable if the omitted beneficiary later brings a claim. However, the executor will be protected from liability if he/she placed advertisements in accordance with section 27 of the Trustee Act 1925. The omitted beneficiary would then be able to claim his/her entitlement from the beneficiaries who wrongly received their share of the estate.
If the beneficiaries are known to have existed but cannot be found, the above mentioned section 27 would not apply to protect the executor against personal liability to beneficiaries. In that case, the executor should have obtained a Benjamin order, which is discussed in our previous blog, or insurance or an indemnity from beneficiaries.
Limitation period
The time limit for an unpaid/underpaid beneficiary to bring a claim to recover a share/interest in an estate is 12 years running from the date on which the right to receive the estate accrued.
There is no time limit to bring actions for fraudulent breaches of duty or where the executor has taken property from the estate for his/her personal gain.
How can Nelsons help
Ronny Tang is an Associate in our expert Dispute Resolution team, specialising in defamation claims, contentious probate and inheritance claims, Trusts of Land and Appointment of Trustees Act 1996 claims, Equality Act 2010 claims and Protection From Harassment 1997 claims.
If you need any advice concerning the subject discussed in this article, please do not hesitate to contact Ronny or another member of the team in Derby, Leicester, or Nottingham on 0800 024 1976 or via our online enquiry form.
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