Executor Conflict of Interest

Skier_G

My Father died in a house fire in January 2024.  After Probate was declared in June 2024, two of my Brothers were appointed as Executors. They and one other Brother along with myself are residual beneficiaries. The Will states the Executors actions are subject to STEP edition 1 apart from needing to consult all beneficiaries concerning the sale of the house.

In July this year, the executors announced that they had received and accepted a private offer for my Fathers  house, subject to some repair work estimated at around GBP20k. The Executors would not disclose who the buyer was, and stated only that the conditions were an agreed price and that the buyer could complete before the remedial work was done.  

Five months later, the Executors said in emails they were still paying expenses on the house and that the sale was not yet completed as they had not received any funds from the buyer. When asked about the terms and conditions of the sales contract, we were informed they and the identity of the buyer were protected by a non disclosure agreement.

A subsequent search on Land Titles determined that the buyer was the Wife of one of the Executors and that title had been transferred a week before we were informed of the sale.

Several questions:

1. Is the Executor selling the house to his Wife of 50 years considered a conflict of interest?
2. If so, as the second Executor is the Brother of the conflicted Executor and therefore not an independent trustee who can approve the sale as being in the best interests of the Estate, is the sale legal?
3. Is agreeing to an NDA a breach of fiduciary duty?
4. Is not receiving any funds in exchange for the house title a breach of fiduciary duty, or even considered theft?
5. Is continuing to pay expenses on an asset no longer legally owned by the Estate a breach of fiduciary duty or even fraud?  
6. What action can we take given the Executors refuse to give us any information directly?

Baldytyke88

Skier_G said:

Five months later, the Executors said in emails they were still paying expenses on the house and that the sale was not yet completed as they had not received any funds from the buyer. When asked about the terms and conditions of the sales contract, we were informed they and the identity of the buyer were protected by a non disclosure agreement.

A subsequent search on Land Titles determined that the buyer was the Wife of one of the Executors and that title had been transferred a week before we were informed of the sale.

Challenging such issues can be expensive, is there a solicitor dealing with this?

Dead_keen

Skier_G said:

My Father died in a house fire in January 2024.  After Probate was declared in June 2024, two of my Brothers were appointed as Executors. They and one other Brother along with myself are residual beneficiaries. The Will states the Executors actions are subject to STEP edition 1 apart from needing to consult all beneficiaries concerning the sale of the house.

In July this year, the executors announced that they had received and accepted a private offer for my Fathers  house, subject to some repair work estimated at around GBP20k. The Executors would not disclose who the buyer was, and stated only that the conditions were an agreed price and that the buyer could complete before the remedial work was done.  

Five months later, the Executors said in emails they were still paying expenses on the house and that the sale was not yet completed as they had not received any funds from the buyer. When asked about the terms and conditions of the sales contract, we were informed they and the identity of the buyer were protected by a non disclosure agreement.

A subsequent search on Land Titles determined that the buyer was the Wife of one of the Executors and that title had been transferred a week before we were informed of the sale.

Several questions:

1. Is the Executor selling the house to his Wife of 50 years considered a conflict of interest?
2. If so, as the second Executor is the Brother of the conflicted Executor and therefore not an independent trustee who can approve the sale as being in the best interests of the Estate, is the sale legal?
3. Is agreeing to an NDA a breach of fiduciary duty?
4. Is not receiving any funds in exchange for the house title a breach of fiduciary duty, or even considered theft?
5. Is continuing to pay expenses on an asset no longer legally owned by the Estate a breach of fiduciary duty or even fraud?  
6. What action can we take given the Executors refuse to give us any information directly?

There is a rule about an executor self-dealing.  Basically, the sale can be voided (undone). Google "executor self-dealing" and use ChatGPT to find out more.  Then find l solicitor to help you.  To me the lack of sale consideration and the NDA shows a lack of good faith by the executor. Double check with the solicitor but my understanding is that the costs of pursuing this to get the sale voided will fall on the executor personally and cannot be claimed against the estate.

My guess at your answers is:
1. Yes
2. The will (if it says it), all beneficiaries or the court.
3. In the context of hiding his wife's name, it's breaches an executor's fiduciary duty.
4. Yes, it's breaches the fiduciary duty.  But it is not theft.
5. I'll leave that to someone else. 
6. Do some ChatGPT-ing, find a solicitor.  They will probably write a "strong" letter demanding immediate answers.  If the executor is not helpful then the next stage would be to go to court to get the sale undone and the title back to the estate. You'd probably also want them both replaced executors.

I'd suggest finding a solicitor today. Ideally one who knows about this sort of stuff.  The wife of the executor may be trying to sell it to a third-party herself or get a mortgage on it.  

sheenas

The real question for me is what price was paid for the house, was it fair market value. I am sure the executors would ague that price was due to the condition the house and therefore worth less than market value. The fact remedial work was done would suggest that was not the case. This likely would not be accepted in a court and the executors would be liable for any loss. The what when and how are all fuel to a fire, but not really material to what you need to focus on. Executors self dealing is prohibited and can be reversed, the title dead should have the money paid for the house which you could confirm with right move or similar. The grant of probate is also public record and you can look that up to.

You are very close to out of time on challenging the probate, I think you have six months. 

WillowLeaf

This is a sorry tale, from the way your father passed to how families can lose their morals (if they had any) when money is dangled in front of them. I sympathise with your position. Hell is other people.

Savvy_Sue

Skier_G said:

6. What action can we take given the Executors refuse to give us any information directly?

What you would need is a solicitor well versed in Contentious Probate. As already pointed out, you appear to be close to the limit of being able to challenge the granting of probate, possibly even past it. 

And you also need to be aware that Contentious Probate is an expensive business, and you may need to pay a solicitor up front without actually being certain of success in court, if it goes that far. It's possible that a strongly worded letter from such a solicitor to the Executors, reminding them of their responsibilities, would achieve results, but who knows? 

Keep_pedalling

Savvy_Sue said:

Skier_G said:

6. What action can we take given the Executors refuse to give us any information directly?

What you would need is a solicitor well versed in Contentious Probate. As already pointed out, you appear to be close to the limit of being able to challenge the granting of probate, possibly even past it. 

Probate has already been granted, but there are no time limitations for legal action where any form of fraud has taken place. 

Skier_G

@Baldytyke88,  no solicitor yet - one of the decisions I need to make when I have enough information.

Dead_keen  - Thank you.
sheenas -  I believe the house price quoted by the Executor is on the low side but acceptably so in normal circumstances and with a quick completion. Neither of us are against my Brothers Wife buying the property but take into account no payment to date and the expenses picked up by the Estate and it is less attractive. In addition, I strongly suspect other shenanigans.  At one stage this year my Brother said the outstanding repairs would be paid for from the remaining insurance money (contents?) - now there is no insurance money. If he gets away with this - what is next to drain the Estate?  Probate is not an issue either - it was in June 2024. I had no reason to object at that time.