Once an Executor is awarded a Grant of Probate (or Letters of Administration if there is no valid will made by the deceased at the time of death) and is entitled to administer a deceased’s estate, the following duties and responsibilities apply (without intending to be exhaustive):

1. the overarching duty to act in good faith in relation to the interests of the beneficiaries by reference to the directions made by the deceased in the will;
2. obligation to ensure to ensure that the assets of the estate are preserved and maximised;
3. maintain reasonable transparency with the estate beneficiaries;
4. maintain a separate account in relation to the funds received from the deceased’s estate;
5. attend to payment of all liabilities which may include but are not limited to: funeral expenses, valid debts (loans, bank debts, utility debts) and any tax liabilities; and
6. maintain accurate records for all assets of the estate and liabilities paid.

Recent decision

Williams J was recently required to make a determination in respect of an application made by four plaintiffs (three stepchildren and a daughter from the deceased’s first marriage) against the deceased’s executor in the matter of Turnbull v Fleming [2024] NSWSC 918.

Briefly the facts where as follows:

1. the late Thomas John Brooks died on 26 December 2018;
2. the deceased was survived by 1 child from his first marriage, 2 children from his second marriage and 3 stepchildren;
3. the deceased’s will dated 24 February 2017, appointed his solicitor Ms Fleming as executor;
4. the deceased’s assets were valued at approximately $4,729,765 which consisted of real property, shares in private companies, cash in bank accounts and various motor vehicles;
5. apart from the transfer of a property to one of his children and the discharge of a mortgage for the benefit of his brother-in-law, the residue of the deceased’s estate was to be distributed to all 6 children equally;
6. the plaintiffs alleged that the executor ‘acted so imprudently as to display a want of honesty and good faith’ by:
   • acting imprudently in the sale of the motel property and motel business in January 2020 which resulted in a sale at a price that the plaintiffs alleged was below the market value by approximately $400,000;
   • acting imprudently in delegating Elders the sale of grain stored in silos on one of the deceased’s properties which resulted in a sale at a price that the plaintiffs alleged was almost $10,000 less than the market value; and
   • failing to recover stockyards located on one of the deceased’s properties.
7. the executor denied the allegations and submitted that she acted prudently and that the plaintiffs were relying on a flawed valuation which did not take into account certain defects that existed at the property.

Outcome

His Honour examined all separate allegations separately and found as follows:

1. in relation to the sale of the motel property and motel business, it was determined that the valuation evidence provided by the plaintiffs’ expert valuer ‘carried no weight’;
2. in relation to the grain sale, it was determined that the manner in which Elders determined the price for the grain and organised the sale was in accordance with the ‘ordinary course of business for rural clearing sales’; and
3. in relation to the stockyard dispute, it was determined that ‘there is no evidence that the price for which the [property] was sold … was reduced by reason of the stockyards having been removed’ and ‘there is no evidence of the value of the stockyards or even that they had any material value.‘

Upon consideration of the facts and the evidence before the Court, his Honour found that the executor had acted imprudently in some respects but ultimately rejected the plaintiffs’ submissions, dismissed the proceedings and indicated that the plaintiffs should be liable for costs.

Seek advice early

This case highlights the importance of evidence and valuations prepared by expert witnesses to support any claim for loss and compensation.

It is important that you seek advice early if you are an executor wanting to sell estate assets or are a beneficiary that is concerned with the manner in which the executor is performing his/her duties.

Costin Stan at FCW Lawyers is a Contested Estate practitioner and can help  you understand your legal rights and how to protect them.