It is often the case that beneficiaries under a deceased’s estate will intimate an intention to bring a claim seeking to challenge the validity of a will but fail to issue a claim by a certain date.
Often, despite the notice of an intended claim, beneficiaries will be pushing for the executors to distribute the estate. To do so, however, may leave the executors exposed to an allegation that they had acted in bad faith, with the consequence that they may well not be afforded the usual protection under Section 27(1) of the Administration of Estates Act 1925. What, if anything, can the executors therefore do to ensure that they can proceed with the administration of the estate?
Part 64 of the CPR governs proceedings in respect of estates, trusts, and charities. CPR 64.2(a)(i) allows the court to determine any question arising in the administration of an estate of a deceased person. Such provision includes seeking an order that the intended claimant of the probate claim be directed to issue a claim within a specified time period.
The court considered such an application in the case of Cobden-Ramsay V Sutton . In this case, one of the deceased’s children contended that the codicil was invalid on the basis that the testator lacked testamentary capacity to execute the same. He was, however, reluctant to issue a claim and instead, insisted that the executors bring a claim to prove the validity of the codicil. The executors, who had no personal interest in the estate, wished to distribute two pecuniary legacies provided for by the codicil and accordingly, they made an application to the court. Having considered the merits of the application, the court made an order directing that if the deceased’s child did not issue his claim within a defined time period, the executors would be free to distribute the estate according to the terms of the (will and) codicil – a so-called “put up or shut up” order.
Considering an application under CPR 64
When considering whether to make an application under CPR 64 it is important to bear in mind that when considering the application, the court will consider whether the purported claim is insubstantial, remote, or speculative, i.e. the potential merits of the purported claim.
To consider the merits, all available material relevant to those merits, including documentation and information relating to the purported claim, needs to be available. In the Cobden-Ramsay case, the executors had provided the deceased’s child with all material relevant to the question of the testator’s capacity. He was therefore in possession of all relevant information and documentation necessary for him to reach a decision as regards the potential merits of his purported claim. Had the executors not provided full disclosure, however, the court may well have refused to grant the order.
The purpose of a “put up or shut up” order
Whilst the purpose of a “put up or shut up” order is to enable executors to get on with the administration and distribution of a deceased’s estate, it should be noted that they do not operate as a debarring order preventing the potential challenger from bringing a claim in the future. However, should a successful claim subsequently be brought by the claimant they would not be able to seek recovery from the executors personally; instead, any recovery would be against the beneficiaries to whom the estate had been distributed.
An application for a “put up or shut-up” order is not limited to potential claims regarding the validity of a will (or codicil). It may also be used in some cases where a notice of a purported claim under the Inheritance (Provision for Family & Dependants) Act 1975 had been received, although some protection is offered to the executors in this respect in view of the primary limitation for bringing such a claim being 6 months from the date of the grant of probate.
In addition, it may be possible to use the same in relation to purported breach of trust claims, although in such cases the question as regards the reasonableness and/or validity of the trustees’ actions will also need to be considered.
Whilst an application under CPR 64 will not prevent a prospective claimant from subsequently issuing a claim, it does at least allow executors (and trustees) to press on with the completion of the administration of a deceased’s estate (or trust) and affords them protection in doing so. They can, therefore, be a useful tool for executors (or trustees) and can often result in a successful resolution of any disputes once notice of the intention to issue such an application has been provided to the purported challenger. In this respect, it is useful to remember that such notice could also include an indication of the executors’ intention to seek recovery of the costs of the application from the purported challenger.
If you are executors where a beneficiary has indicated an intention to bring a claim but has failed to do so and you wish to receive legal advice as regards the possibility of issuing a Part 64 application then please contact Ally Tow in our firm’s Dispute Resolution team by phone on 07894 512 991, or by email at [email protected].
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.