Head of Charity Estate Administration
Legacies | National Charity Legal Services | Private Wealth
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The prospect of someone acting as executor whilst simultaneously being a potential, or indeed actual claimant against the same estate often causes discomfort. Those against the idea will often say 'surely it is not allowed' or words to that effect.
Putting the legal position to one side for a moment, this seems like a reasonable enough position for them to take. Intuitively speaking, the arrangement does have a hint of 'conflict' about it, as the executor is involved in the estate in two separate capacities.
As executor, their role is to administer the estate according to the law, and to be concerned only with what is right, regardless of whether it benefits them personally (i.e., in a beneficiary capacity). As claimant, on the other hand, they are of course entitled to be solely concerned with their own interests.
If, as a charity, you were on the other side of a claim in these circumstances, you could be forgiven for raising an eyebrow and perhaps gently questioning the executor's ability to administer the estate without being swayed by their personal interests.
This question usually arises in the context of claims under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act). With other claims, the question is less likely to arise because the position is usually – dare I say it – obvious.
Take a testamentary capacity claim for example. If the claimant is trying to have a will ruled to be invalid – perhaps so the estate passes under the rules of intestacy – then it would be absurd for them to want to act as executor of that same will.
The application for probate requires a positive statement by the executor to the effect that the will is valid, and that is not a statement they would ever want to make as it would be the opposite of the position they are taking in the claim.
In those situations, it is often the case that no one acts as executor until the claim has been resolved, and, if the circumstances of the estate so necessitate, a temporary personal representative is appointed in the meantime.
The short answer is yes – it is indeed allowed in relation to claims under the 1975 Act. The textbooks have always said so, and the question was recently commented upon by the Court of Appeal in Bowser v Smith & Anor (Re Estate of Ian John Smith)  EWCA Civ 923.
The case was an unsuccessful appeal of a costs order made against a solicitor-executor in related proceedings. In those proceedings, the solicitor-executor had originally sought to have the deceased's estranged wife removed as his co-executor. With some encouragement from the court, an agreement was later reached that both executors should be replaced by an independent professional.
The costs order was made against the solicitor-executor for a number of reasons, one of which was that his position had been partly based on his view that a conflict of interests existed due to the deceased's wife's intention to make a claim under the 1975 Act. The court was clear that 'no such conflict exists as a matter of law'.
The rationale is that a claim under the 1975 Act is not inconsistent with the role of personal representative, whose role it is to administer the estate in the best interests of the beneficiaries. Normally, those beneficiaries are named in the will or determined by the rules of intestacy, and in those cases, it is of course commonplace for one or more of those beneficiaries to act as personal representative of the estate. No one would (sensibly) call that a conflict.
If, keeping that in mind, one views the 1975 Act as merely allowing for the addition of another beneficiary (or perhaps a rearrangement as between existing beneficiaries) in order to establish the proper distribution of the estate in accordance with the law, then it all starts to make sense.
The court also referred to the need 'for care to be taken by a 1975 Act claimant who is also a personal representative to keep the two capacities distinct'. This is important. In practice, someone in this position needs to be carefully advised. They don't need separate firms of solicitors, but I would strongly recommend separate files and separate advisers, ideally one specialising in contentious probate and the other in estate administration.
With help from those advisers, the client should be able to navigate the two capacities and be mindful of which hat they are wearing in relation to any and all actions and decisions that need to be made. If this approach is not followed, whether due to a lack of good advice or perhaps an unwillingness to follow it, then it becomes more likely that an application for their removal as executor would be successful after all. It would become a conduct issue as opposed to a conflict one.
As charities, you won't find yourselves in this situation because you don't bring claims under the 1975 Act, but you will often be on the other side of the fence, where you might be facing such a claim in circumstances where the claimant is also the executor or otherwise entitled to act as personal representative.
The moral of the story is that it would be inappropriate to steam in and demand that the claimant does not act and/or apply for their removal based solely on the perception of a conflict of interests. The court does not see it that way.
However, you will want to monitor the claimant's conduct carefully and satisfy yourselves that they are paying due attention to the two capacities and keeping them separate. If they are not (or you are concerned that they may not be) then it will be time to consult your advisers about the next steps, as, depending on the specifics, this may be a justification for having them removed as executor after all.
Charities do have to make these from time to time, so does the same logic apply, and should you as a charity feel comfortable acting as the personal representative of an estate where you are also making an application for rectification that may be contested?
The court often draws analogies between rectification claims and claims under the 1975 Act, although there are of course more differences than there are similarities. Again, the short answer is probably yes. But, due to the wide-ranging nature of rectification claims, which can of course impact any aspect of a will or codicil, I would say that this question could only be sensibly addressed on an analysis of the specific facts of the case.
If ever we can help you with a situation like those described in this article, please get in touch. Our Foot Anstey team is well-versed in navigating these situations for charity personal representatives and beneficiaries.