Administrator authority in litigation

Trusts Discussion
1

The Administrator of an estate is proposing to sign a settlement agreement, to settle outstanding litigation, between the estate and its the beneficiaries (being the Administrator and her two daughters) and a third party.

The settlement agreement is drafted to confirm that the agreement is in settlement of all claims and that the Administrator has the authority to sign on behalf of the estate and its beneficiaries.

The concern is whether:

  1. This is sufficient to bind the beneficiaries of the estate - or if the beneficiaries would need to also sign the settlement agreement;

  2. If the Administrator dies or is replaced, this is sufficient to bind a replacement/successor Administrator.

Does the Administrator have the authority to bind the beneficiaries, and to bind any future Administrator of the estate, to the terms of the Settlement Agreement?

Elizabeth Cotton
Capital Law

2

Whilst an administrator has power to compromise a dispute, I would be reluctant to rely upon it where the dispute involves the beneficiaries.

I would look to see any settlement agreement executed by all parties. Should any of them subsequently feel that the settlement was not in their best interests their signature, or that of their legal advisers, on the settlement agreement should be a significant protection for the administrator and their successors (provided that the settlement was reached in good faith and is not compromised by the party in question having been deliberately mislead).

Paul Saunders FCIB TEP

Independent Trust Consultant

Providing support and advice to fellow professionals