Advice for Executors and Trustees in Difficult Situations

Advice for Executors and Trustees in difficult situations:

Applications for Judicial Advice 

If you have been appointed as the executor of a will or the trustee of a trust and have a difficult or complex question regarding the management or administration of trust property, then this article is for you. 

When an executor has collected all of the assets of the deceased estate for distribution, he or she then holds those assets on trust for the beneficiaries of the will. At that point the executor becomes a trustee. Also, for tax planning and other family reasons, accountants often advise clients to create a trust during life to protect family assets and to provide effective estate and tax planning. 

In all of these cases, difficult questions can sometimes arise concerning the duty of the trustee. The correct course of action for a trustee may turn on a complicated or contested point of trust law. In such a case it may be pertinent to request the advice of the Supreme Court. Under section 63 of the Trustee Act 1925, a trustee may apply to the Court for advice or direction on any question with respect to the management or administration of trust property, or regarding the interpretation of the trust instrument. 

The essential purpose of proceedings under section 63 is to provide protection for trustees. If a trustee acts in accordance with the advice or direction given by the court, then he or she will be deemed to have discharged their duty as trustee in the subject matter of the application. This is provided that there is no fraud or wilful concealment in obtaining the advice or direction. This is beneficial to a trustee who can be rest assured that they will not be held personally liable for breach of trust in the event of a later claim against it. 

In relation to costs, ordinarily an applicant will be entitled to indemnity from the estate for reasonable costs incurred in obtaining judicial advice. 

If you have a question about the management or administration of trust property, or on any other issue of law, contact us today to speak with one of our experienced lawyers. 

 

The information contained in this article is not a substitute for legal advice and should be considered as general information only. 

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