It is common for an individual to appoint the same person as their attorney and executor of their estate. However, an issue arises where the individual acting as an attorney misuses their authority resulting in the deceased individual’s estate having fewer assets and leaving beneficiaries deprived. In such circumstance, it is unlikely that the executor will sue themselves to recover the loss. There may also be other factors which leave an executor unwilling to take action against the attorney (e.g. the executor may be exposed to personal liability if unsuccessful etc.).
The options available for the deprived beneficiary includes bringing an action against them:
- executor or trustee of the estate to compel them to sue the third party for the loss; or
- attorney directly to recover the loss.
The case of Bird v Bird (No 4)[1] provides an example of where a deprived beneficiary successfully sued the executor. In this case, Percy Bird appointed his wife Mona and two sons as his attorneys severally. Mona, acting as attorney sold 4 properties owned by Percy and deposited the proceeds of the sale into a bank account in her sole name.
Percy died 3 years after the properties were sold. Percy’s executors failed to identify the wrongful action by Mona and did not undertake any steps to recover the sale proceeds. Percy’s daughter (a beneficiary of the estate) brought an action against the executors to recover the loss. The Court held that the executors had a duty to call in and collect assets of the estate and if necessary, to bring a proceeding to do such. As the executors failed to bring an action against Mona, they were held liable for mismanagement of the estate.
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