We are acting in the estate of T who made a Will appointing his Mother, M as the Executor and dividing the estate between his daughter J and his niece, N, who don’t get on.
The estate is substantial and we are just over a year into a complex administration. A significant amount of work has been carried out and IHT paid. Our fees to date have been - and will continue to be - discharged by rental income received by the estate.
All of a sudden, J has questioned the validity of the Will (not prepared by us) and is making enquiries in this respect. She is of course entitled under Intestacy to take the Grant and also inherit the entire estate (there was no previous Will).
If the Will is set aside, J will instruct her own lawyers to conclude the administration.
My question is, under those circumstances, we would have been instructed by someone who acted in good faith at the time but retrospectively has no authority, so would we be entitled to keep the monies already billed and paid?
As the executor of the estate is M, she is the person contractually liable for the fees, etc., with a right of indemnity from the estate for those costs properly incurred in the administration of the estate.
If the will is set aside, so that J is entitled to the estate on intestacy, this does not cause J to replace M as the client.
There was a case a few years back, when the issue was considered following the discovery and proving of a later will. The executor of the first will was a professional and, as a result of the second will being proved, ceased to be entitled to their fees, etc. However, the court agreed that they had provided a valuable contribution to the administration of the estate and should be allowed to retain some of what they had been paid.
Should J be successful, I anticipate a similar situation might apply, although in your case, any such order would be to relieve M of at least part of her liability to you. You will need to consider if you should apply to be joined in any probate action, for the purposes only of seeking to limit the amount that you might have to return to the estate and claim directly from M. Whilst in M’s interests to avoid her liability to you, on the basis that she has no other interest in the estate she might leave it to N to defend the claim, making only minimal statement of fact herself which might not even touch upon the costs so far incurred in the administration of the will.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals