The Facts
Woman appoints de facto partner and son as co-executors of estate
In April 2011 a woman died at 60 years of age. She was survived by her two adult children and her de facto spouse.
The woman and the de facto spouse had lived together as a couple since about 1996 until her death, a period of about 15 years. They lived together on the NSW coast in a home unit which was owned by the woman.
The property was the woman’s only asset of any real value, which was estimated at $245,000 at her death.
The woman made her last will in 1998, appointing one of her sons and her de facto spouse as co-executors. The will left half the value of her home to her de facto spouse and the other half to her sons.
Probate of the will was granted to the son and the de facto spouse as co-executors.
Protracted negotiations between co-executors fail to produce results
Over six and a half years had elapsed since the woman’s death and the woman’s estate had yet to be finalised.
Negotiations between the son and the de facto spouse as to the sale of the coastal property or its purchase by the de facto spouse had failed.
The de facto spouse continued to reside at the property. In 2016 he married and his new wife and her children subsequently moved in to the house and continued to live there.
The property remained registered in the name of the deceased woman and could not be sold or otherwise dealt with without both executors reaching agreement.
Son commences legal proceedings to remove mother’s de facto as co-executor
The son commenced proceedings in the Supreme Court of NSW in November 2017, claiming the de facto spouse had prevented the woman’s estate from being finalised and had wrongfully interfered with the estate’s property rights by continuing to reside there without entitlement to do so.
He asked the court to remove the de facto spouse as co-executor and to order him to vacate the coastal property so that it could be sold.
De facto files cross-claim seeking family provision order
The de facto spouse filed a cross-claim in the court contesting the will, seeking a family provision order that he should receive the whole of the coastal property, because he had been the de facto spouse and the property had become his home over the years.
Expert commentary on the court's decision
Supreme Court decides in favour of sons
In the case of Wise v Barry; The Estate of Robyn Margaret Wise [2018] NSWSC 1726, the Supreme Court of NSW ordered that the de facto spouse, Mr Stephen Barry, be removed as an executor and the son, Mr Shane Wise, be appointed as sole executor, so that the final administration of the estate of Ms Robin Wise could be concluded promptly.
The court ordered that vacant possession of the property be given within 28 days and a writ of possession be made. Mr Barry’s claim for a family provision order was dismissed.
Revoking a grant of probate and removing an executor
The Supreme Court has an inherent power to revoke a grant of probate and remove an executor.
This is a matter of discretion and the court’s focus is the due and proper administration of the deceased estate in the interests of the beneficiaries.
Reasons why a court may remove an executor
The court may remove an executor where circumstances arise which satisfy the court that the due and proper administration of an estate has been put in jeopardy or has been prevented by the executor or by reason of other factors which establish the executor is not a fit and proper person to carry out the executorial duties.
This will depend upon the facts of the particular case. An executor who has been guilty of inexcusable delay, one who otherwise impedes the due administration of the estate, or who flatly refuses to do something necessary for the estate administration without sufficient reason may be removed. (For more information, please see What exactly do executors of wills do? and How do you choose an executor for your will? – the horror story edition.)
Breakdown of relationship between co-executors
A breakdown of the working relationship between co-executors, frustrating the process of administration of the estate, may also justify the removal of an executor, as may the existence of an actual, or potential, conflict of interest.
In the case of Wise v Barry, the court accepted that the due and proper administration of the woman’s estate had been prevented by the de facto spouse. The court also considered that because the proceedings were commenced and the parties were not able to resolve the matter by themselves, there was no realistic expectation they would work together to finalise the estate.
As an executor, the de facto spouse was under an obligation not to prefer his own interests to the interests of the other beneficiaries.
Weaknesses in de facto spouse's family provision claim
In NSW a claim for a family provision order must be commenced within 12 months after a deceased person’s death. A claim cannot be made out of time unless the affected parties consent or otherwise without sufficient cause being shown for the delay.
In Wise v Barry, the court considered the de facto spouse did not show sufficient cause because, among other things, he made the claim almost six years out of time and because he had sought legal advice from a number of solicitors during that period.
The court considered both sons would suffer prejudice if the court allowed the claim and in any event, the de facto spouse’s claim was not likely to succeed.
Even though the sons’ financial circumstances were better than the de facto spouse’s, when considering the provision made for the de facto spouse under the will and the fact that he had remained in occupation at the property, rent free, for approximately seven years, the court could not be satisfied that he was not adequately and properly provided for by the woman’s will. (For more information about family provision claims, please see Family provision claims in NSW – spare us the details and curb your expectations.)
Disproportionate legal costs in battle for modest estate
The deciding judge remarked at the outset of his judgment that “these are very unfortunate proceedings”. The proceedings took nearly 12 months to be determined and required a two day hearing. It was almost seven and a half years after the woman died by the time the case went to hearing.
Both parties were represented by lawyers and barristers. The son’s costs were estimated at $73,000 and the de facto spouse’s costs were estimated at $54,000. The combined costs therefore were estimated at $127,000.
The judge remarked that he tended to the view that perhaps, in this case, there had been both obstinacy and unreasonableness on both sides and that there had been a complete lack of proportionality between the legal costs and the value of the woman’s estate.
Co-executors, blended families and the need for careful estate planning
The case of Wise v Barry underscores the importance for willmakers of getting the executor selection right at the outset, to avoid conflict and unnecessary delays and costs.
In the context of blended families, the case also highlights the need for careful will and estate planning measures, such as provisions to deal appropriately with the family home in a way which balances competing interests and, where possible, maintains family harmony.
Preventative estate planning is key. Connecting with an experienced wills and estates lawyer for advice and assistance with your will drafting and estate planning well in advance of any problems could save you and your loved ones a whole lot of heartache and significant time and expense later on.
For more information, please see Is it a conflict of interest if the administrator of the estate is also a beneficiary?