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Executor Conflict of Interest and the Administrator Pendente

The key functions of executors are to call in the estate assets, to manage them competently and to distribute them in accordance with the deceased’s wishes as set out in the will. In a perfect world, these functions would be performed by a person without any personal interest in the estate, ensuring that all matters are managed with an even hand.

For a number of reasons, this is often not the case. Perhaps the most common of these are:

  • Cost. Independent trustees and executors can be expensive, particularly if a trust company is involved.
  • Privacy. While appointing a key family friend or a trust company can avoid conflicts, it also opens up the family’s finances to outside scrutiny.
  • Myopia. Testators are usually optimistic that no disputes will arise.
  • Balance. Potential problems can sometimes be avoided by appointing multiple persons. Of course, in the absence of unanimity disagreements may still arise.

In the administration of most estates, the appointed persons discharge their duties without incident. In many other cases, the executor will take steps to diligently resolve conflicts among beneficiaries which usually relate to distributions but can also involve management of trust assets and liabilities including the pursuit or defence of claims for or against the estate.

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