Heavy duty

Getting rid of executors has never been easier. The recent case of Goodman v Goodman made it clear that the court can remove an executor under section 50 of the Administration of Justice Act 1985 before a grant of probate has been issued.

Goodman (although it concerned lay executors) is an opportunity to remind practitioners they may be removed before a grant.

The 2011 decision in Khan v Crossland marked a sea change, lowering the bar for removal. Section 50 gives the court a wide discretion to remove and appoint replacement executors. In all such cases, whether lay or professional executors, the court's primary consideration is the interests of the beneficiaries as a whole (see Letterstedt ?v Broers [1884]).

The grounds for removal are where:

• there is a conflict of interest between the executor and the beneficiaries

• the executor commits a breach of trust or duty;

• the executor-beneficiaries relationship breaks down such that it affects the proper estate administration or prejudices the welfare of the beneficiaries.

It is under the last point (in the absence of either of the first two being brought into play) that an application to remove a solicitor-executor is most likely to arise. However, there are two issues to consider.

First, while friction or hostility between personal representatives (PRs) and beneficiaries is a relevant consideration, it is not, on its own, a reason to remove the PRs: bad relations between parties is not enough. It is ?only when the proper administration ?of the estate or the beneficiaries' ?welfare is being adversely affected that removal will be considered (see Angus v Emmott [2010] and Kershaw v Micklethwaite [2010]).

Second, the testator's choice of executor is a relevant factor under section 50 applications. Where the choice does not arise out of an existing relationship and there is no particular reason for it, the court attaches considerably less weight to such a choice: it is relevant but not decisive.

In Khan the reasons for the choice of executor were unknown in circumstances that there had been little contact between the executor and the testator.

Additionally, the two adult beneficiaries claimed that the relationship between them and the executor had broken down arising from a very high estimate of the fees to be charged on the estate. Both ?adult beneficiaries sought to remove ?the executor.

Risky business

So what can be deduced from ?these cases?

• The testator's choice of you as an executor, where there is no previous or ongoing relationship, risks their choice carrying less weight. A written record of reasons will help. Gifts to minors, continuing trusts or concerns the client may have about disagreement between beneficiaries ?or inter-family disputes after death ?are good reasons for appointing a neutral professional.

• Disclose your firm's probate and estate administration charges and clearly explain them to the residuary beneficiaries (with any changes). If the fees do not change markedly from those previously advised, this may be less of an issue for the beneficiaries and may assist in defending ?any application.

• Friction between you and the beneficiaries is not enough, but if it causes difficulties the risk of properly administering the estate increases. It is also risky when combined with any of the above points. You need to show that, notwithstanding any friction, the proper administration of the estate will not be affected. Obvious things to avoid are being appointed alongside relatives as executors or trustees.

Lloyd Junor is an associate at Thomas Eggar

He writes the regular in-practice article on wealth structuring for Private Client Adviser