An action can be taken against the executor in the Supreme Court.
An executor’s duties are to preserve, protect and administer the estate diligently so where an estate has suffered waste as a result of deliberate or negligent actions on the part executor this will amount to a breach.
Any action taken will be against the executor personally, not the estate. It will not be a defence that the estate has been fully administered and there are no assets to meet the claim. If found liable, the executor must make good any loss to the estate.
There are several types of breach and these can often overlap. The main categories of action against an executor are:
- Misappropriation
- Maladministration
- Breach of trust
Misappropriation occurs when an executor uses an estate’s assets to pay his/her personal liabilities or fraudulently disposes of them for a profit.
Where assets have been dealt with in a manner other than provided in the will or by law, an action for maladministration may sought. Examples of maladministration include a failure to pay and discharge debts; selling property undervalue and using assets for personal use. It is not a defence to an action for maladministration that the executor acted in good faith.
A breach of an executor’s duties can also result in an action for breach of trust. For example, an executor who fails to demand and enforce payment of a debt owed to an estate will be in breach of his duty of care. If a loss is suffered by the estate as a result of the failure to enforce the debt the executor will be liable to repay the loss. Further examples of breach of trust include:
- Failure to observe the provisions or directions in a will;
- Where an executor makes a profit whilst acting in as executor;
- The making of unauthorised investments resulting in a loss;
- Use of estate to pay for executor’s personal debt.
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