A recent High Court case[1] illustrates the level of care required for executors and trustees when handling the sale of a deceased person’s property.
In this case, the deceased had four children; two were the executors of the estate. One of the four children was upset that the other two siblings made the decision to sell their father’s house to one of the grandchildren at two thirds less than the market value, even though this was in accordance with the deceased’s verbal wishes. The result was that the upset sibling received a significantly less portion of the proceeds of the sale than they expected.
The Court said that Trustees have a duty to the beneficiaries of the estate to get the best possible price in the sale of property. Although the Trustees were acting on the deceased’s instructions by selling the property at a discounted price, they failed in the standard of care required in considering the result for the beneficiaries.
The Court ordered the two siblings to pay a portion of the shortfall to the upset sibling.
Trustees or executors of estates be warned: You have a duty to get the best possible outcome for the beneficiaries of the Will which requires a particular standard of care. If in doubt, seek advice.
[1] Greenwood v Simpson [2018] NZHC 845.
Naomi Lee is a Law Clerk in the Succession and Wealth Protection Team at Norris Ward McKinnon. You can contact Naomi at [email protected]
