Ideally, the administration of a deceased estate should be a structured and somewhat straightforward process. Generally speaking, the assets of the estate are identified, the liabilities are discharged, and distributions are made in accordance with the deceased’s Will or the rules of intestacy.

However, in practice, estates are often complicated by individuals, whether it be a conflict or some form of dispute.

In real terms, a challenge to the validity of the Will, or a dispute between beneficiaries can quickly bring the administration of the estate to a halt. If this occurs, the role of the executor can become frustrated meaning the executor is unable to carry out the administrative tasks they need to do.

In these circumstances, the appointment of an independent administrator can be critical to ensuring the estate is finalised efficiently, objectively, and with minimal further conflict.

The issue with conflict

When a dispute arises, executors can be placed in a position of conflict. This is especially the case where the executor:

• is a beneficiary themselves;
• is occupying a property of the estate;
• has received funds from the deceased prior to death;
• has a personal relationship with one or more parties to the dispute; and
• may be perceived (rightly or wrongly) as favouring one side of the dispute.

Sometimes, even if an executor acts appropriately, the perception of bias can be enough to stir the emotion of the parties resulting in disputes being escalated, the administration being delayed and perhaps the incurrence of (sometimes, unnecessary) legal costs.

In more contentious estates, this can lead to:

• a breakdown in communication between the parties;
• the beneficiaries or other parties refusing to cooperate;
• challenges to the executor’s decisions; and
• applications to the Court for removal of the executor.

These circumstances result in delay, legal costs and further erosion of the estate.

The role of an independent administrator

In most cases, an independent administrator is a solicitor appointed by an order of the Court to step into the role of administrator of the estate. The appointment of an independent administrator can be made either by an agreement between the parties, or by a disputed application before the Court.

The key advantage of an independent administrator is neutrality.

Generally speaking, the Court will appoint a solicitor to be the independent administrator of an estate where:

• they have no personal interest in the estate; and
• they have professional experience in the area of law relating to estates.

The benefit of these aspects is that the independent administrator understands their legal obligations to the parties and can act as a buffer between the disputing parties.

Their independence allows them to make decisions that are not influenced by family dynamics or emotional considerations, but rather by what is required to properly administer the estate.

Progressing the estate where there is a gridlock

By far the greatest advantage of an independent administrator is their ability to progress the administration of the estate when it has been gridlocked. 

Given their impartiality, an independent administrator is not personally entangled in the dispute. They are better positioned to cut through the issues that may have caused a gridlock prior to their appointment. An independent administrator can:

• take control of the assets of the estate;
• engage professionals (accountants, valuers, agents) where required;
• communicate with the parties in a methodical and consistent way;
• make decisions regarding interim and final distributions to the parties; and
• respond succinctly to claims or litigation in the estate.

Reducing risk

There is a personal risk to executors who continue to act notwithstanding an ongoing dispute, especially where there are allegations against the executor for breaching their duties.

Stepping aside in favour of an independent administrator can:

• reduce personal risk to the executor;
• (potentially) protect existing relationships;
• ensure compliance with legal obligations; and
• avoid the stress and burden of managing a contested estate.

For beneficiaries, it provides reassurance that the estate is being administered fairly and transparently.

De-escalating dispute

The appointment of an independent administrator means that an estate can continue being administered in an effective and commercial manner. In real terms, an independent administrator can:

• de-escalate dispute and conflict;
• restore confidence in the parties that the administration is progressing; and
• allow disputes to be addressed without gridlocking the estate.

While the appointment of an independent administrator will incur additional cost, it will often be more commercial than the costs the estate would have incurred if it was left in a state of delay and dispute. 

Conclusion

Where an estate is gridlocked due to disputes between beneficiaries, a challenge to the Will or allegations against an executor, it is difficult (and often impossible) for the executor to navigate a way forward.

An independent administrator brings objectivity and structure. In doing so, they provide the best opportunity for the estate to be finalised in a way that is fair, compliant, and ultimately—productive.

Contact our team if you have any questions regarding independent administrators or any estate administration legal matters.