WA Executor of a Will - Breach or Misappropriation of Duties?

[Errol du Boulay]

In a will, there is a specific clause entitled 'Specific Gift' which gives money in a bank account to a charity. Despite there being more than enough money in the Trust account, the Executor of a will took the money for their own fees. I think money is real property just like a building, car etc.

My questions are:
Has the Executor misappropriated the money and denied the charity what was expressly left to them.
And has the Executor breached their statutory duties by their actions?

Thanks.

 

[Tracy B]

Hi Errol du Boulay,

Money in a bank account is not treated the same as a building or car. It is classified as a "specific gift" if there is enough money in the residuary estate or designated estate for fees, expenses and debts. If there is not enough money elsewhere, the money in the account will become "general" and will be one of the first to be tapped into, before any real property or specific goods.

When you say there is enough money in the trust account, what trust account are you referring to? Could there be insufficient money after funeral and administrative expenses, paying off debts on the estate, taxes (if any) and other reimbursements for payment of executor fees?

 

[Errol du Boulay]

A property was sold so the executors had $200k in the trust account for distribution prior to admin expenses

 

[Tracy B]

Hi,

If the property was gifted under the will to specific beneficiaries (and not the general estate) then any proceeds from this property will still belong to the beneficiaries. Generally, the executors should not be selling real property first for covering expenses, they should tap into ready cash.

Was this property gifted to someone under the will? Or was the property sold before death (by the original owner) and proceeds placed in trust specifically to pay for expenses and fees?

 

[Errol du Boulay]

Hi Tracy
A beneficiary had the option to purchase the property for the value determined by a licenced valuer. 1%deposit was payable within 30 days of the granting of probate and the balance payable 60 days after GOP. The beneficiary was entitled to 50% of the estate. The Executor sold the property to the beneficiary for half the appraised value. This resulted in the main beneficiary receiving more than 50% of the estate and the remaining beneficiaries paying all the cost of the administration from their entitlement.

 

[Tracy B]

Hi,

The administration fee is born by the executor, from proceeds of the estate asset. It should not be coming out of the house unless there is not enough other estate assets to cover the administration fees and debts. Therefore:

• Was there a designated account where fees,funeral costs and debts were to be paid from?
• If not, did the estate assets include any bank accounts and other general (or unallocated) assets?

If the will gave the beneficiary (A) 50% of the house, who received the other 50% (beneficiary B)? Did beneficiary A later pay 50% of the appraised value to beneficiary B to buy his/her share in the house?