What do you do if you are the executor of an estate, and a family member decides to bring a claim?
An Executor has a duty to defend family provision claims brought against the estate. Their duties will depend on the nature of the legal proceedings but may include:
1. Contesting the claim on the estate by seeking to uphold the will and administer the estate in accordance with the will (or the default position in cases of intestacy);
2. Ascertaining the position of the beneficiaries in respect of the issues in the litigation;
3. Assisting the Court to make a decision in “all the circumstances” of the case and ensuring that the Court has access to all relevant material including, evidence of the beneficiaries’ financial or other circumstances;
4. Keeping the beneficiaries informed about the legal proceedings and any proposals to settle those proceedings;
5. Conducting informal settlement procedures; and
6. Participating in a mediation.
In a family provision case, an Executor is generally obliged to uphold the will and to place all relevant material before the Court, including most importantly, evidence of the circumstances and needs of the beneficiaries, financial and otherwise. If the claimant is ultimately successful and there is not enough money left in the estate to cover the award given to the claimant, the Executor can be held personally liable to cover the shortfall. Therefore the Executor must deal with the claim before any distribution is made.
Supreme Court Practice Note Eq7 sets out the documents required to be prepared on behalf of an Executor after a claim is commenced. The Executor’s solicitors generally prepare these documents. The practice note goes into further detail and can be accessed here.
Generally, all family proceedings in family provision claims are referred to mediation by the Court. Here the Executor must participate in the mediation in good faith and assist in clarifying the real issues in dispute. Depending on the circumstances of the case, the Executor’s role here may even extend to negotiating a settlement with the claimant and compromising the will.
The Executor’s costs of defending the claim are usually paid on a full indemnity basis out of the Estate.
It is crucial for the Executor to be properly advised in a family provision claim so they can perform their duties adequately. If you find yourself in this situation, please contact our Estate Disputes team to discuss this further.