Recognising a Conflict When a Beneficiary is Also an Executor
Can someone be both executor of a will and a beneficiary under the will? This is quite common – but what if there is a conflict of interest?
Beneficiaries and executors
A beneficiary of a will is a person named in the will as someone who will inherit money or property, or benefit from a trust. An executor of a will is the person named in the will who is responsible for arranging the allocation of a deceased person’s property and carrying out their wishes. An individual can be both a beneficiary and an executor for the same will. However, it is possible for the courts to remove an executor, if a conflict of interest arises from a will dispute.
What powers do the courts have to remove an executor of a will?
Usually, the court will make a decision to remove an executor of a will when the executor is at fault through their actions. The Administration of Justice Act 1985 (s50) gives judges the power to remove an executor where they see fit, and a wide discretion to do so.
In the recent High Court case of Heath v Heath, Timothy Heath, an executor and beneficiary of his mother’s estate, was removed as executor because he had raised a dispute to contest the will. The court’s decision to remove him as an executor was unusual, because Timothy was not at fault through his actions. However, the court thought that there was a conflict of interest: Timothy was in charge of dividing up property according to a will with which he disagreed, in respect of his own inheritance.
The case of Heath v Heath
Three brothers, Dominic, Jeremy and Timothy Heath, were beneficiaries in their mother, Rachel Heath’s will for one third each of her estimated £1.8 million estate. As well as beneficiaries, the brothers were all named as executors of the will. Dominic and Jeremy Heath had both left the family home and achieved successful careers in medicine. Timothy was a qualified barrister but did not pursue a career; he continued to live in his mother’s house for over 50 years and cared for her when she suffered from dementia.
Timothy stated, “I have been looking after mother for many years, a difficult person to look after. I was her principal carer for many years.” Two paid live-in carers had also worked at the house, but Timothy argued that he had done a third of the work of caring for his mother, unpaid. He also argued that his brother Jeremy visited their mother twice a year, and Dominic once a month for about an hour. The will splitting the estate into thirds was written in 1971, long before his mother became ill. His brothers were both wealthy due to their careers in medicine, whereas Timothy was not employed. Timothy challenged the will on the grounds that he was deserving of more than one third of the estate.
The Removal of Timothy Heath as Executor
Dominic Heath argued that his children should benefit from their grandmother’s estate and Timothy was preventing this by refusing to fulfil his duties. As an executor, Timothy Heath was responsible for dividing the estate into thirds for himself and his brothers according to the 1971 will. However, Timothy had argued in court that he should be entitled to more than the one third of the estate that was allocated to him in the will.
Dominic and Jeremy Heath made a claim against Timothy to have him removed as one of the executors. The judge, Mr Justice Carr ruled in their favour, removing Timothy as an executor of the will. Timothy was replaced by in independent solicitor. Dominic and Jeremy were ordered to pay their own costs of £25,000 for making the application to remove Timothy (rather than removing this money from the estate). Mr Justice Carr warned Dominic and Jeremy that they might also be removed as executors should further conflicts arise. Timothy Heath’s will dispute is on going.
What this means for an executor who is challenging a will
It is possible for someone who is both an executor and a beneficiary to contest a will. However, the case of Heath v Heath shows that someone can be removed as executor if there is a conflict of interest. Such a conflict may arise, if like Timothy Heath, the individual challenges the allocation of property, which he or she is responsible for distributing.
If you are the executor of a will that you also benefit from – or think you should benefit from, and are considering whether to challenge the will, get in touch with us!