Disputes between executors can put an estate into deadlock. In Key v Key, the court considered when conflict between co-executors justifies appointing an independent administrator and how related disputes about estate property may be approached.
When deciding whether to remove an executor, the court’s main concern is whether the estate can be administered properly. The court does not have to find wrongdoing before it can remove an executor. Equally, a beneficiary cannot insist on a change of executor simply because they would prefer a different person to manage the estate.
In practice, the court may consider:
- Can the estate be administered effectively? The court looks at what has already been done, what remains to be done and whether the current executors can complete that work.
- Is there a real risk of unfair or improper administration? The court may remove an executor if there is a real risk that they will not act fairly and conscientiously or cannot be expected to administer the estate effectively.
- Is the relationship breakdown affecting the work? A poor relationship or personal hostility is not, by itself, enough. The key question is whether the conflict makes the administration difficult or impossible.
- What did the testator want? The identity of the executors named in the will is relevant, but it is one factor in the overall decision.
- What do the beneficiaries want? Their views matter, but the court must balance competing interests rather than simply follow one beneficiary’s preference.
- What will a replacement cost? The court considers whether the expense of appointing a professional is proportionate to the size of the estate and the work left to do.
The court’s approach is therefore practical, rather than punitive. It is not simply deciding who was to blame; it is deciding whether the proposed arrangement is likely to achieve a fair and effective administration.
Where the parties’ distrust is deep-rooted, resolving the immediate disagreement may not be enough. Other issues may arise later, requiring further negotiations or court applications. An independent administrator can make decisions impartially and may reduce the risk of the administration repeatedly returning to court. The appointment still needs to be justified, including by reference to its cost.
Key v key
The case of Key v Key focuses on the above and the options available to the court to deal with the estate. The case also provides useful guidance on disputes about estate property:
- A sale at an independent valuation may be appropriate – An open-market sale is not the only possible way to establish a fair price. Depending on the circumstances, a properly instructed expert valuation may provide a suitable basis for a purchase.
- Occupation rent is not automatic – The starting point is that one co-owner does not necessarily have to pay rent merely because they occupy a property while another does not.
- Fairness depends on the circumstances – Relevant factors may include the property’s market rental value, whether occupation benefited the estate and the expenses properly incurred in maintaining the property. Personal occupation expenses should be distinguished from proper estate or property expenses.
These points matter where a beneficiary or executor remains in an estate property. The question is not simply whether that person has lived there, but what arrangement would be fair in light of the estate’s interests and the parties’ respective contributions.
The judgment also addressed the procedure in a Part 8 claim. The court held that a defendant may seek a different remedy arising from the matters raised by the claimant without making a separate counterclaim. A counterclaim is different: it would involve a separate cause of action.
The case concerned two siblings who were both executors and beneficiaries of their late mother’s estate. The sister sought an independent administrator, relying on the breakdown in their relationship and complaints about the brother’s handling of estate matters. The brother opposed that appointment and sought directions on how the administration should proceed. The court found fault on both sides, but concluded that there was no realistic prospect of the siblings working together to finish the administration. It appointed an independent professional administrator.
The court also expressed views on the proposed sale of the house and occupation rent. Those issues did not need to be finally determined once the administrator was appointed, but the court considered that an independent valuation could support a sale and that any occupation rent charge should be assessed fairly in light of all relevant circumstances.
Executors should focus on keeping the administration moving, sharing information and recording decisions. Where cooperation has genuinely broken down, the court will look beyond the parties’ competing complaints and ask whether the estate can realistically be administered in the hands of the current executors.
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Faye Dunkley is an Associate in our expert Dispute Resolution team, specialising in inheritance and Court of Protection disputes.
If you need any advice concerning preliminary trials, please do not hesitate to contact Faye 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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