The brother who wouldn’t budge

Gareth had five children, three sons who lived overseas, another son, Rhys who lived with Gareth in the family home and a daughter who lived nearby.  Gareth died in March 2014 without leaving a will and a trustee company was appointed to administer Gareth’s estate. When the New Zealand based family did not appear to be taking any steps to administer Gareth’s estate, one of the overseas based sons, Idris, contacted the trustee company in August 2014.

Idris chased up the trustee company many times, but very little progress was made until August 2015 when the trustee met Rhys and Rhys agreed he would buy the family home.  The overseas based family were not very happy about this decision, but could do little to prevent it as the trustee had decided the sale of the house to Rhys was in Gareth’s estate’s best interests.

However Rhys did not appear to be taking any steps to purchase the home and in December 2015 the trustee company issued Rhys with a notice to quit.  Rhys finally signed an agreement to buy the house, with settlement in April 2016.  Settlement day came and went without Rhys buying the house.  Idris was concerned that the trustee company appeared powerless to do anything to finalise Gareth’s estate and, towards the end of April 2016, complained to us.

Idris’s view

Idris considered the trustee was bending over backwards to accommodate Rhys.  Not only was Rhys living rent free in the family home, but he had stolen $12,000 from Gareth’s account ostensibly to carry out repairs he could not substantiate.  Idris considered Rhys was doing everything he could to delay finalising Gareth’s estate, and the trustee company was facilitating this delay.

Idris complained to FSCL.

Review

When the trustee company reviewed the complaint, it agreed the staff member who had been administering Gareth’s estate had made a number of errors, including:

  • delaying winding up the estate
  • failing to do a Will search with the Law Society
  • failing to apply to the High Court for approval to administer the estate within a reasonable timeframe
  • advising the incorrect sale price to Rhys’s lawyer
  • failing to communicate with the beneficiaries and ignoring reasonable questions
  • failing to acknowledge and address the complaint.

After discussion with us, the trustee company wrote to all the beneficiaries advising that following a complaint from one of the beneficiaries the trustee company had discovered the estate had not been properly administered and the family was essentially in the same position as they were when Gareth died.  The trustee company apologised, offered to reverse the $7,000 in fees it had charged to date as well as compensation of $2,000 to each beneficiary for the inconvenience caused.  The trustee company then put forward two options:

  • as the trustee company did not yet have Letters of Administration appointing it as executor of Gareth’s estate, the beneficiaries could proceed with a different trustee company
  • continue the administration with the trustee company, and a plan for administration was put forward which included seeking vacant possession of the family home and selling it on the open market.  The trustee company was unable to advise the exact costs of the administration, but did provide an estimate.

Outcome

The beneficiaries decided to proceed with the trustee company, and the complaint was resolved on the basis that if there were any further problems the beneficiaries could refer a further complaint to us.

Our insight

Estate administration can be difficult, especially when a beneficiary refuses to leave a property owned by the estate.  However, a trustee company must be able to show that it has acted professionally and efficiently to administer the estate in the estate’s best interests.