Claims against executors and administrators

Executors and fiduciaries may be subject to a range of legal proceedings. This can happen if a beneficiary of an estate believes that they have failed to execute their duties correctly. Or a beneficiary or third party such as a creditor may sue administrators seeking to be paid from assets of the estate.

Whatever the nature of the dispute, we can help. Our clients include successful individuals and families, executors, trustees and charities in the UK, the US and throughout the offshore jurisdictions.

Our New York team represented the administrators of a UK estate in a matter relating to one of the first major art restitution cases. A non-family member demanded $4.75 million from the estate, claiming that he had helped to recover a $19 million painting that had been taken from the decedent by the Nazis. There was no valid legal basis for the claims and we succeeded in having them dismissed in the US Federal Court.

In RSPCA v Sharp and Others, we acted for the charity. Its benefactor had left a property to Mr and Mrs Sharp, the executors of his will, along with ‘the maximum which I can give to them by this my will without Inheritance Tax becoming payable’. The executors interpreted this as meaning that they were entitled to the nil rate band then £300,000 and the property. This meant incurring inheritance tax and reduced the estate left to the RSPCA. We argued that Mr Mason had intended his estate to pass free of inheritance tax. The Court of Appeal unanimously upheld our case.

In one trust matter in California, our team represented the guardian of a minor beneficiary against the trustee, who had distributed the entire $1 million of the trust’s assets to herself, alleging her discretionary power to make distributions for her health, maintenance, and support. Our US team demanded a full account and sought damages for breach of trust enabling our client to recover the entire $1 million. She was also awarded $10,000 in sanctions, payment by the trustee of our attorneys’ fees and costs, and the removal of the trustee from the trust.

Taking a commercial view

Although we can bring considerable firepower to bear in court, we always take a commercial view and look to resolve disputes through alternative routes. When we acted for the executor of a New Jersey estate, we avoided lawsuits with potential legal costs in the millions of dollars by persuading the parties to engage in a successful mediation before claims were served for breach of fiduciary duty, theft and misappropriation.

Too frequently, our team sees fiduciaries take advantage of their position, which if not caught early, can result in substantial damages that are difficult to recover. “Bringing in a Withers’ lawyer at an early stage to review fiduciaries’ actions and accountings can save substantial money in the end and ensure the wishes of loved ones are carried out,” advises Jeremy Moffit, a San Diego-based partner.

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03 November 2016 - Article

To join or not join: the role of trustees in Family proceedings


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