Is a power reserved executor still a Trustee ?

SmithySue

Hi, my father died last year and his Will said:

"I appoint "my brother" & "me" to be my Executors and Trustees. The expression "my Trustees" means my personal representatives and the Trustees of this will and of any Trust that might arise under it"

There are no other Trusts mentioned in the will or under it. It's a very simple will according to my Solicitor, all standard stuff.

My brother - the other nominated Executor - did not want to apply for Probate and gave me a letter confirming his permission for me to apply for Grant of Probate in my name only, which I did and I put him down as Power Reserved. Several months later the Grant of Probate was issued with me as the sole Administrator and "power reserved to another Executor"

So far so good.

Then I start getting grief from my brother telling me I have to consult with him on all aspects of the Estate and that I cannot do anything without his permission. Eg; I wanted to list the property with an Estate Agent at the price advised by the Agent but my brother wanted to sell the property in a private deal to one of his builder friends at a discounted price.

As the sole Executor on the Grant I consulted a lawyer to confirm where I stood and he confirmed it was my legal duty to get in and manage all assets of the Estate, money and property, and obtain the best possible price for the benefit of the 2 beneficiaries - who are me and my brother. I have that advice in writing from the Solicitor so I put the house with an Estate Agent at the price he, and another Estate Agent, had advised in writing, and the Agent put it on Rightmove.

We now have an offer on the house that is very close to the asking price that I want to accept and, although my Solicitor says as I am the sole Executor & I do not have to consult with my brother as he has no official authority being power reserved, I asked my brother for his approval anyway to accept the offer.

Out of petulance or something, he is refusing to accept the offer and he has sent me a Solicitors letter threatening me with Court action because he is a Trustee and I did not consult with him or obtain his permission before making decisions ie putting it with an Estate Agent

I have asked his approval for the current offer, the Estate Agent says its a damn good offer accept it, but my brother is accusing me in his Solicitors letter that I did not get his approval in the decision to put the house with an Estate Agent.

All the complaints in his solicitors letter is based around him being "a Trustee"

My solicitor has written to him explaining that I am the sole Executor on the Grant of Probate, which my brother knows as he has a copy of the Grant, and he has been told several times he has no authority in matters of the Estate Administration and that if he wants he can apply to have his name put on the Grant and no-one is stopping him. In fact he was told that months ago and still hasn't applied.

So my question is this.

As he is voluntarily power reserved, according to Section 5 of The Administration of Estates Act 1925, it states "if an executor declines to take out probate his rights shall wholly cease and his Administration of the Real and Personal Estate in a like manner as though he was not been appointed Executor"

Does that mean that by declining to apply for the Grant of Probate he also lost any rights to be a Trustee (of Estate assets) of the will ?

His Solicitors letter, which was sent ie; hiding behind "Without Prejudice", says he still has all the rights of a Trustee of the will. Which I take it means he still has a duty to manage Estate assets on behalf of the Beneficiaries.

But I don't believe he has and I think his Solicitors letter is just threats that with the cost of going to Court I won't challenge him and make me decline the offer for the house so he can sell it to his mate.

How can my brother be a Trustee of Estate assets if he is power reserved ? He has no authority because he declined to apply for Probate and I am the only Personal Representative / Administrator on the Grant who has a legal Duty to manage the assets and it's my neck on the legal block if any asset is under sold or mismanaged ?

If you are an authority on Probate please clarify the situation for me as it's really doing my head in now.

many thanks

Savvy_Sue

I don't know, but your solicitor will. Rely on them, not the anonymous mind of the forum ...

SmithySue

Savvy_Sue said:

I don't know, but your solicitor will. Rely on them, not the anonymous mind of the forum ...

My solicitor says agree and do everything you can to avoid Court as the costs could be huge. 
I was hoping a Solicitor on here may know the legal position.
The law appears to only work for those that threaten court & not the ones in the right 

Savvy_Sue

Agree avoid court, but I'd ask your solicitor to reply confirming the position, ie he is no longer a trustee, quoting chapter and verse / precedent.

What you have to understand is that solicitors follow instructions. So even if his solicitor has said "You won't stand a chance if she calls your bluff" he may still think it's worth a try.

SmithySue

Savvy_Sue said:

Agree avoid court, but I'd ask your solicitor to reply confirming the position, ie he is no longer a trustee, quoting chapter and verse / precedent.

What you have to understand is that solicitors follow instructions. So even if his solicitor has said "You won't stand a chance if she calls your bluff" he may still think it's worth a try.

Yes I know, that's why everything he has accused me of is in a WP letter so it can't be used in Court and not an Open letter

Savvy_Sue

Taking a slightly different tack ... 

Your solicitor says "avoid court" and no-one could disagree with that. 

How does your solicitor suggest you avoid it? From my very limited perspective, you seem to have two basic choices, and I'd take their advice on which they think is best. 

1. Carry on and accept the offer, basically ignoring the latest letter
   
   
2. Ask your solicitor to reply to the letter, stating that you have received the letter, note its contents, and they are wrong, so you will carry on and accept the offer because as sole executor it is your duty etc etc etc. 

I am sure there are very polite ways for one solicitor to tell another they are wrong. 

And I am also sure your solicitor can explain the risks with each option, and there may be distinctions to be made which are less likely to sound like "bring it on, you will lose and my client will be awarded costs" than others. 

There is another thought, which is that your brother or his builder mate should compensate you for the difference between what you've been offered and what the builder is willing to pay. The trouble is, while you're farting about negotiating you may lose that buyer. 

I am sorry that you're having this hassle! Families, eh!

doodling

Hi,

It is not clear what your brother wants.  He appears to be complaining that you have marketed the house using an estate agent, but it is not possible to go back in time and change that.

Does he have another buyer lined up which would avoid the estate agent costs, whilst still achieving the same (or a greater) sale price?  If he does then it would seem reasonable to proceed with that buyer.

If on the other hand he is proposing a buyer who is offering a reduced sale price compared to the EA sale (once EA costs are taken into account) then I would be pointing out that he is failing in his duty as trustee (whether or not he has any rights as such) and asking him what he is going to do about selling the house at a sensible price.

As Savvy_Sue points out, if he really wants to sell the house at an undervalue then you can agree to that providing that he alone takes the financial hit.  I'd be wanting to set a fairly aggressive deadline for such a sale to take place however as it is very easy for people to try it on once they think they are guaranteed to buy it and you need to be clear that additional price reductions (e.g. after survey) are entirely at the brothers risk.

If he is not proposing a buyer then he is just wasting everyone's time.

I'd be tempted to carry on with the sale for now as you don't need his approval and your losses if he went to court after a sale (excluding court costs) are effectively limited to half the difference in price between what you sold it for and what he can convince a judge that his buyer would have bought it for.

Of course, if he actually commences legal proceedings before the sale then you might have to stop, but you might also find out what he really wants...

Keep_pedalling

No doubt your brother’s deal with his builder mate would involve a backhander so you would be the only beneficiary that would loose out on this discounted price. 

The fact is that the probate documents give you the sole right to administer the estate. An executor who has reserved there powers can later get involved but that requires him to obtain double probate which is usuallaly only obtained if the acting executor fails to administer the estate or become incapable of doing it.

Call his bluff, tell him you are willing to consider a private offer but only if it exceeds the one you already have. Alll he is going to do if he continues to be an idiot is cost both of you lots of money.

SmithySue

thanks for the comments guys, much appreciated.

Unfortunately my brother is a serious control freak and always has been. When control freaks realise they can't control things - as in this case - they loose it and go way OTT. He will not negotiate or be reasonable as per the above suggestions, so it's either his way and I give in or, as in the previous post, call his bluff and see if he does take me to Court. Hence my original question - does he still have Trustee authority of any assets.

As a non lawyer, this is my understanding of the relationship of an Executor & Trustee named on a will:

A person making a will can nominate anyone, without their knowledge, as an Executor. It could have been the nice man at the Butchers because he always chatted to my Dad about football etc and it only comes to light who he nominated when the will is read. No-one nominated an Executor on a will is obliged to accept and apply for grant of Probate and in our case that is what my brother did, he declined in writing, all above board and so he is Power Reserved.

As I am the only proving Executor I am the Personal Representative of the deceased and I have to administer the Estate according to the will and in the best interests of the beneficiaries. And as stated earlier Section 5 of the Act states quite clearly that my brother now has no authority over any of the estate assets.

Once probate is granted to one or more Executors named on the will, then they have a duty under Section 25 of the Act to "collect and get in the real and personal estate of the deceased"

And there are a variety of Sections of the Act that state, Executors on the Grant must act and agree together, they must discharge estate debts, liabilities, funeral costs and can charge administrative expenses to the estate - but not their time in doing any of that work.

So that is all clear and he can't argue with that, well he can but he won't get anywhere.

So as I am the only proving Executor all the assets of the deceased are therefore held in Trust by me on behalf of the beneficiaries, that's where the Trustee bit on the will comes in:

"I appoint "my brother" & "me" to be my Executors and Trustees. The expression "my Trustees" means my personal representatives and the Trustees of this will and of any Trust that might arise under it"

So to recap, I have been given the sole authority by the High Court on the Grant of Probate to collect and administer my fathers assets and they are under my care (Trust) until such time as the Trustee (me) distributes them to the beneficiaries according to the will; ie equal 50/50 split.

But as said in my original post, my brother declined to apply for the Grant, so he lost / resigned his ability to control any assets so if he hasn't got the authority to control the assets (Section 5) there are no assets that he is a Trustee of. But his threatening letter says he is still a Trustee of the assets.

As someone stated earlier, the letter from his solicitor could just be hollow threats in an attempt to force me to back down and do things his way but as he is a serious control freak and if he does issue Court proceedings I'd really like confirmation from someone who knows, or can find out for me, if my understanding that he is a Trustee (in name only) of no assets, is correct.

That is the bit I need clarifying.

If it is I'll call his bluff and do what my Dad would have wanted and use my authority under the Grant and agree the house sale with the Estate Agent for the best price possible and let my brother accept it or do whatever he wants.

You can't control or reason with a control freak unfortunately

many thanks

SmithySue

sorry, this bit should have read:

"Once probate is granted to one or more Executors named on the will who have extracted a Grant, then they have a duty under Section 25 of the Act to "collect and get in the real and personal estate of the deceased"

As it's only me on the Grant I just have to agree with myself !

theoretica

See also legal comment on similar situation https://www.dailymail.co.uk/money/experts/article-10427671/My-sibling-refuses-sell-home-inherited-do.html