Executors: Conflicts of Interest
Are you an executor of a friend or family member’s estate? Being able to identify a conflict of interest is an important skill for any executor. Failure to identify possible conflicts of interest can often have significant consequences.
How to Identify Conflict of Interest
A conflict between an executor’s duty and interest can arise in a number of circumstances. One of the most common situations where there may be a conflict of interest is where the executor wants to commence a family provision claim. In these circumstances the executor has a clear duty to either compromise a family provision claim or contest it and seek to uphold the will. There is clearly a conflict of interest as the executor is seeking to take provision of the estate at the expense of other beneficiaries. Despite this conflict of interest an executor is still permitted to initiate a family provision claim.
However, not all conflicts of interest of an executor are treated so leniently. In McIntosh v McIntosh  QSC 99, the deceased died without a will. His next of kin was his mother and father, who were divorced. With the consent of the father the mother obtained letters of administration. She then made applications to the deceased’s three external superannuation funds as a dependent of the deceased to have the benefit paid directly to her rather than the estate. The trustees of the funds exercised their discretion and paid the funds directly to the mother.
The father commenced proceedings claiming that the death benefit funds should have been paid to the deceased’s estate. The Court agreed and held that an administrator has a duty to apply for payment of superannuation funds to the estate. Furthermore, any person who has an intention of making a claim against the superannuation death benefit personally should not act as an administrator of the estate. The Court ordered her to pay the death benefits back to the estate.
If you require any further information in relation to acting as an executor, contact our team of lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.