Wills Disputes: The Duty To Account Is Not Absolute

Beneficiaries frequently ask us whether trustees or personal representatives can be required to provide a financial account. Their request may already have been refused. They may be concerned that the estate and/or the trust is being mishandled or clarification regarding specific assets is desired.

The trust and probate disputes team at Osbornes Law are experienced in advising trustees, executors and beneficiaries where an estate or trust dispute arises, as well as beneficiaries seeking important information to which they are entitled. We also regularly advise clients where trust assets or family members are overseas.

Terminology

A Personal Representative (PR) is the umbrella term for ‘executors’ and ‘administrators’. If a deceased person died with a valid Will and the person(s) named in the Will are willing to act in the estate administration, this person is the executor. If a deceased person dies without a valid Will, an administrator will deal with his or her estate. Executives and administrators perform the same functions and owe the same duties, the key difference being that an executor derives authority from the Will itself. In contrast, an administrator’s authority is limited until such time as a Grant of Letters of Administration has been obtained.

What is the ‘duty to account’?

A PR, when required to do so, must render an account of the administration of the estate under section 25 of the Administration of Estates Act 1925. In practice, this means that the PR must keep estate accounts, and these should be made available for inspection by a beneficiary (or creditor) on request.

Suppose a PR refuses to provide a copy of the estate accounts or otherwise fails to account to the beneficiaries for the assets comprised in the estate. In that case, the beneficiary can apply to the court for an Inventory and Account under The Non-Contentious Probate Rules or the Civil Procedure Rules. Such an application can be made whilst the estate administration is ongoing or some years after. This is because an executor or administrator remains so for life unless the court terminates their authority;

however, if an application is made after a substantial lapse of time – it may be rejected, as happened in a recent case¹. So notwithstanding a PR’s duty to account, the beneficiaries are not automatically entitled to an account on request.

What was the issue?

This was an unusual estate administration, given the lengthy-time period involved. The claimants, one of whom now lives in New Zealand, asked the court for a wide-ranging order requiring a trustee to provide estate accounts – 28 years after the administration of their grandparents’ £multi-million estate was completed.

The PR had acted as executor for the estate administration and a trustee of the trusts from their inception until his retirement in 2020. He was now aged 89 and was in poor health. The order sought covered a period of 49 years and concerned what had become of a portfolio of properties.

The claimants sought details of the PR’s dealings in his capacity as trustee of the trusts created under their grandparents’ wills, having been dissatisfied with the PR’s answers to their questions. The court action stemmed from concerns principally in relation to the ownership of a portfolio of properties held before the grandfather’s death. The current value of the trust assets was around £3.75m.

The judge found that the PR had complied with his duty by producing estate accounts which they had historically prepared. But what of the claimants’ outstanding concerns – should the PR be ordered to provide a further account?

Given the exceptional circumstances, the judge refused to exercise his discretion and order an account to be produced. The delay in bringing the application was unjustified. The key reasons were as follows:

1. the 28-year delay in seeking further accounts was unjustified and excessive. There was no good reason why a claim could not have been brought “much sooner”;
2. the effect of such a delay was “oppressive and unconscionable” given the PR’s age, his failing health and the added burden of a task of such a scale; and
3. any benefit to the claimants would not be proportionate to the burden imposed on the PR to comply with such an order.

Key takeaway

Whilst beneficiaries ordinarily have the legal right to an account from trustees and PRs, this is not absolute. Any individual seeking further information from trustees or PRs needs to carefully consider whether they could effectively be time-barred from succeeding in a claim – particularly in circumstances where the remedy sought would be disproportionate and oppressive for the other party.

A failed application could prove costly. Expert advice from experienced contested trust and probate solicitors should be taken before any steps are taken. The wider background to the case will be an important consideration before any potential action.