Head 10: Executries Flashcards
Who is an executor?
An executor is an individual responsible for gathering, administering and disposing of the estate of a deceased person in accordance with the testament or the rules of intestate succession.
What happens if an executor is incapacitated?
Rule found in Murray Petr 2012
Murray Petr 2012
⁃ This case involved a partial question about who could be appointed the executor-dative on the estate of the deceased where a gentlemen had died intestate. Ordinarily the widow would have been entitled to be appointed since she was entitled to the whole estate by virtue of prior rights. However she was incapax so couldn’t be appointed. The question was - did he incapacity mean that she wasn’t included on the list (and therefore the son of the deceased would be able to act as executor-dative) or did it mean there was a major problem and there wouldn’t be able to be an executor-dative?
⁃ The court held that it was possible for the son to act as the executor-dative (but it wasn’t entirely clear whether the court proceeded on the basis of s 9(4) [the list] or whether it proceeded on a general concept that since she was incapacitated someone could act on her behalf.
- question about who could be appointed as executor-dative on the estate of a deceased gentleman who had died intestate. Ordinarily the widow would have had the right to be appointed as the executor-dative under s 9(4) on the basis that her prior rights exhausted the estate. However, she was incapax: child appointed
Who is an executor-nominate?
⁃ An executor nominate is an executor who has been nominated in the testament of the deceased.
What is the process of nomination of an executor-nominate?
⁃ The process of nomination is fairly straightforward - normally the word executor will be used (e.g. I appoint Dan Carr as my executor). Sometimes the testament might not use the word executor but this is not necessarily a problem - the court will look at the provision and consider whether a nomination can be implied into the words (e.g. I appoint Dan Carr to collect and gather my estate).
Is a constructive executor nomination possible?
- ‘constructive’ executors nominate possible if testament fails to identify executor or identified executor is dead, refuses, incapacitated: Executors (Scotland) Act 1900, s 3.
⁃ If the deceased died testate, there are a number of individuals who may be ‘constructive’ executors-nominate.
⁃ This is provided for under the Executors (S) Act 1900 s 3
⁃ This is most important if a nominated executor is incapacitated, dead or rejects the nomination.
⁃ Broadly speaking this allows for testamentary trustees, a general disponee / universal legatee or a residuary legatee to be constructive executors-nominate. [In other words people who have been given legacies which aren’t specific legacies might be constructively deemed to be executors-nominate too.]
Who is an executor-dative?
An executor-dative is an executor who is appointed by a sheriff rather than a testament.
When will an executor-dative be required?
⁃ The most important reason why an executor-dative will be required is where the deceased dies intestate, though it can occur in some situations where the testament has failed to appoint and executor-nominate.
How is an executor-dative chosen?
There is a list of priority of persons who can seek appointment as an executor-dative. The first person the sheriff finds on the list will be asked if they want to be the executor-dative. The list is as follows (from first entitled to last):
⁃ 1) General disponees
⁃ Includes people with mixed legacies (of heritable and moveable property), universal legatees, and residuary legatees
⁃ 2) Surviving spouse entitled to the whole estate by prior rights (s 9(4) S(S) Act 1964)
⁃ 3) Persons entitled to ‘free estate’ (s 2 S(S) Act 1964)
⁃ 4) Deceased’s creditors
⁃ 5) Specific legatees
⁃ 6. Etc.
Does it matter whether you are an executor-dative or an executor-nominate?
⁃ Not in most situations. There is only one thing which really matters: in some cases it will be necessary for an executor-dative in order to be confirmed as an executor-dative to lodge caution[ This is the lodging of money with the court (so that you don’t run away with the estate!)]. [Practically speaking this doesn’t happen in exactly this way these days - as an executor you will actually contract with an insurance company who will pay the bond of caution on your behalf].
What are the steps in the executory process?
The executory process is a series of different steps:
1) Decerniture
⁃ This is where the sheriff chooses who is going to be an executor (if there is an executor nominate then there is no need for decerniture - only necessary if there is an executor dative.) [When the sherif is doing this they are technically sitting as something called a commissary - not important.] In the absence of executor nominate.
2) Inventory
⁃ The executor must prepare a detailed list of all the deceased’s assets for the sheriff and IHT[ Inheritance tax.].
⁃ This inventory is important for 2 reasons:
⁃ 1) Anything on the inventory will be subject to confirmation (the confirmation allows the executor to administer the property without breaking the law). If the property is not on the inventory the executor cannot touch it. If the executor administers property which is not on the inventory he is known as a vitious intromittor.
⁃ 2) This will form the basis for the calculation of inheritance tax.
3) Confirmation
⁃ Confirmation by the sheriff is the crucial stage. At this moment, the sheriff (acting as a commissary) gives the executor legal title to administer the assets that are contained on the inventory.
⁃ Confirmation puts the ownership of the estate into the executor. This is not like any other normal type of ownership - it just means that he is the owner on behalf of people who are entitled to it. [Ownership doesn’t transfer until confirmation and the deceased cannot own any property. SO who owns in this intervening period? Nobody knows.]
4) Eik
⁃ This is where the inventory is prepared but later more property is discovered that was not contained in the inventory - the executor can lodge an ‘eik’ with the court.
Is there a separate procedure for smaller estates?
There is a special simplified procedure for small estates under the Confirmation to Small Estates (S) Act 1979 which provides for less formal procedures than there are in the normal case.
What is a small estate?
A small estate is an estate worth no more than £36k (Confirmation to Small Estates (S) Order 2011 SSI 2011/435)
Are executors trustees?
Trustees and executors are generally thought to be slightly different things - however the authorities tend to be quite inconsistent on this matter, there are many contradictory quotes:
⁃ Erskine and Bell - “executors are trustees for all interested in the executor”
⁃ Lord Dunedin in Taylor v Ferguson: “emphatically [an executor] is not a trustee”
⁃ The Trusts (S) Acts and Executors (S) Act 1900 suggests that there may be an overlap between their powers.
One thing to keep in mind is that executors might be considered to be like trustees in some respects - many of their fiduciary obligations are the same. They both have property vested in them in order to carry out some kind of purposes or objective which will not benefit them directly.
How can executors and trustees be distinguished?
One way to analyse the difference is that:
⁃ Executors deal with winding up an estate so they will distribute the estate and once they’ve done so their role is over.
⁃ Trustees might have a short lifespan like executors, but they might also have a longer, more continuing lifespan (some trusts are hundreds of years old).
So often when you look at a testament the deceased provides for the appointment of executors and trustees to emphasise the fact that the executors will deal with the estate but they may well be creating a trust with the intention that it will continue on longer.
