Article by Manny Wood published in the Coffs Coast News Of The Area on 27 October 2023.
Paul, Amy, Grace and Harry are the adult children of Brian.
Brian appointed Paul as executor of his will, as he thought having his 4 children as executors would just be too many cooks in the kitchen. Brian has considerable assets which are to be split equally amongst his children.
After Brian passes-away, Paul retains a solicitor to assist him with obtaining a grant of probate and to provide advice regarding the administration of the estate.
However, while the grant of probate was being processed by the Court, Paul decides to sell Brian’s classic toy collection, without discussing his intentions with his siblings.
Paul invites over a few of Brian’s friends who are also classic toy enthusiasts.
Paul is keen to sell the toys and accepts the amounts offered by Brian’s mates.
When Paul tells his siblings that he has sold the toys and now wants to divide the proceeds of sale according to the will, things get very hot in the kitchen.
Amy and the other siblings seek legal advice, alleging that Paul has sold the toys well below market value.
This resulted in a lawsuit filed by the aggrieved beneficiaries, alleging that Paul as the executor, had failed in his duty to protect the estate’s assets and maximise its value.
By selling the property below its market value, the Court held Paul had failed to properly realise the assets of the estate, thereby breaching his fiduciary duty to the beneficiaries.
This scenario serves as a potent reminder that executors have a legal obligation to manage the estate with utmost care and integrity, while acting in the best interest of the beneficiaries. If they fail to uphold these responsibilities, executors can be held liable for any losses that the estate or the beneficiaries suffer as a result.
Thank you to Anthony Fogarty for his assistance with this column. Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487. This column is only accurate at today’s date and cannot be relied upon as legal advice.
