When you make a will, choosing an executor may seem straightforward. You simply choose someone who you think will do a good job of sorting out your affairs. However, over time, that person’s situation may change. They may eventually be in a situation in which they can’t act as executor of your estate because they lack the capacity to carry out their duties. If this happens, what can be done?

Executor duties

Before we look at this issue, it’s worthwhile understanding what an executor does and what the law requires of them.

An executor is appointed by a person’s last will and testament to finalise that person’s estate after they have died. (This person is known as a testator).  The executor must collect the estate’s assets, pay off all the debts and then sell or distribute the remaining assets in accordance with the provisions of the will. The law imposes obligations on executors to act properly and competently. They must also:

• Deal with the estate without unnecessary delay.
• Properly communicate with the beneficiaries.
• Account for the estate’s assets and debts.

The executor must apply for a grant of probate, if probate is required. Probate is the legal process of proving the will. When probate is granted, the Supreme Court officially recognises that the will is valid and gives the executor permission to deal with the estate and distribute it according to the terms of the will.

It is important that the executor takes their duties seriously and is able to understand their legal obligations. It’s also important that the executor is in a reasonable state of good health so that they can properly administer the estate.

Sometimes, an executor is appointed in a will and then many years pass before the testator dies and the executor must act. In this time, perhaps the executor’s health has declined and no one has considered how this will impact on the executor’s legal duties to administer the testator’s estate.

Appointing an Executor in a Will

If just one executor is appointed in a will, it can be a real headache if that person becomes incapable of acting as executor. There’s usually a lot of legal to-ing and fro-ing and in many cases the Supreme Court must eventually make a decision about what to do. This also means that there’s a drain of money from the estate to pay for the legal fees and court application.

Thankfully, a simple mechanism is incorporated into most wills to get around this issue. A substitute executor can be appointed. This means that the will sets out that the executor is appointed to administer the estate, but in the event that that person is unable or unwilling to act as executor, a different person can be appointed as executor.

This is a neat solution to the problem and in many cases prevents any disruption to the administration of a deceased estate. Sometimes, however, neither the executor nor the substitute executor can act. Or sometimes a person has appointed just one executor in the will.

This brings us back to our original issue. What happens if the executor can’t act and there’s no substitute executor to take over?

Passing over versus removal

If an executor needs to be relieved of their duties before probate has been granted, they are “passed over” as executor. This means that the executor is removed before they have a chance to act as executor.

If an executor needs to be relieved of their duties after probate has been granted, the executor must be removed, meaning that their executor duties are brought to an end.

In both circumstances, there must be an application to the Supreme Court supported by evidence to show why the executor should be passed over or removed. In the case of incapacity, it is likely that there would need to be medical evidence to prove the incapacity of the executor.

Incapacity to act

An executor may be passed over or removed for many reasons. They include:

• The executor is of bad character (for example, they have committed a serious crime).
• The executor has neglected their duties.
• The executor has somehow interfered with the estate.
• The executor is overseas for a prolonged period.
• The executor is in ill health.
• The executor doesn’t have legal capacity (they aren’t competent to deal with the estate).
• The executor is of unsound mind.
• The executor has disappeared.
• The estate is insolvent.

An executor may have some physical or mental limitations that stop them from performing or understanding their duties. For example, in her will, a woman nominates her husband as executor. Many years later she dies. In that time the husband has considerably slowed down with age and has also developed dementia. He can’t physically do what is required of him to gather and distribute the estate’s assets. Nor is he capable of understanding what needs to be done or why it needs to be done. In short, he lacks legal capacity and consequently lacks legal capacity to be executor of the estate.

Interested parties, for example beneficiaries to a will, can apply to the Supreme Court to have the executor passed over or removed. In making its decision, the Court will consider what is necessary for the due and proper administration of the estate and also the interests of the estate’s beneficiaries.

The Court also needs to consider whether the executor is likely to be temporarily or permanently incapacitated. If it believes that the executor is likely to recover from their incapacity, then it may grant a limited order that someone else can act on the executor’s behalf while the executor is incapacitated. A general order is made when the incapacity of the executor is permanent so that someone else can permanently take over as executor.

If the executor is passed over or removed and there is no substitute executor, the party making the application may ask the Court to appoint another executor, known as an administrator.

The executor of a deceased estate has an important job to do and appointing an executor is not a decision that should be taken lightly. However, even when an appointment is made with the greatest of care, unexpected events can happen down the track. If you are experiencing issues with or as an executor, the best course is to seek legal advice as soon as possible.

Websters Lawyers has a team of outstanding inheritance and estate lawyers who can assist you. Contact us today for a free first interview.