When dealing with the administration of an estate, there may be a number of terms that are unfamiliar, one of which being ‘intermeddling.’ Intermeddling refers to anyone who takes steps in relation to a deceased’s assets and leads a beneficiary or creditor to believe he/she is authorised to deal with the estate.

What is considered intermeddling?

What constitutes intermeddling depends upon the type of activity and it must be significant, such as;

  • Disposing of the deceased’s personal possessions and selling assets.
  • Paying debts owed by the deceased.
  • Carrying on the deceased’s business.

What is not considered intermeddling?

  • Opening an executor’s bank account, without making a deposit;
  • Making enquiries into the extent of assets and liabilities;
  • Collecting in assets for safekeeping and insuring them;
  • Making funeral arrangements. Funeral directors will seek funeral costs from whoever has instructed them, whether or not they are entitled to instruct.

Importance of dealing with debts properly

There is a strict order regarding the application of assets of the estate discharging debts.

Debts and liabilities must be met out of the estate in the order set out in Schedule 1 Part 2 of the Administration of Estates Act 1925. If they are not, any beneficiary adversely affected can make a personal claim against the personal representatives (PRs.)

What should you consider?

The debts which should be discharged promptly so as not to cause any interest or penalties to the estate. If a personal representative pays a debt under a moral obligation e.g. to a family member when that debt is not, in fact, a debt which the estate is bound to pay, this will generally lead to the personal representative being liable (although consider the powers to compromise claims in good faith under Trustee Act 1925 (as amended by Trustee Act 2000).

Whether the debt may be statute barred i.e. out of time under limitation rules. If a PR discharges a debt which is statute barred, this can also lead to a personal liability against the PR.

Whether the estate is insolvent. If an estate is insolvent, then PR should administer the estate for the benefit of the creditors as opposed to the benefit of the beneficiaries (the persons who will inherit), either under the will or the intestacy rules.

What if an estate is insolvent?

A PR may wish to take care not to intermeddle in an estate if there is a possibility that the estate is insolvent from early on. They may wish to take legal advice on whether it is in their best interest to renounce, rather than fulfil, their role as executor or administrator and administer the estate.

If the estate is to be administered and is insolvent, debts must be discharged in the order set out in the Administration of Insolvent Estates of Deceased Persons Order 1986 as follows:

  • secured creditors (provided the asset is available in which the debt is secured against);
  • funeral, testamentary and administration expenses;
  • preferred debts and Preferential debts;
  • unsecured creditors;
  • interest due on secured loans;
  • deferred debts.

All liabilities in a category must be settled before moving down to the next category and if there are insufficient funds to settle one category they will need to be apportioned to each creditor within that category.

Liability to account for IHT on assets within the control of an intermeddler is imposed by the Inheritance Act 1984.

What if intermeddling has occurred?

If you have intermeddled in the administration of an estate, you cannot renounce probate and may be cited to take a Grant.

A person not lawfully appointed to deal with the estate, but who has intermeddled is known as an executor de son tort, and is accountable as if he/she had authority. This means, for example, a beneficiary can request an inventory and account from such an individual directly or by an application to the court.

Also note that a person receiving instructions as agent and acting accordingly may also be held accountable (unless he/ she can show they acted honestly and reasonably i.e. was misled to believe the person giving instructions had authority (see the not so recent cases of Thomson v Harding (1853) and Sharland v Mildon (1846).

How to prove intermeddling has occurred

If you suspect intermeddling has occurred, we advise you to contact your solicitor to receive advice on the matter, gather your evidence, notify the beneficiaries of your concerns, and lastly, bring the issue to the court’s attention if advised by your solicitor.

If it is found that intermeddling has occurred, the consequences may include delays in the distribution of the estate, increased legal costs if legal action has been taken and potential depletion of assets if unauthorised actions result in financial loss which cannot otherwise be recovered from the PR who would be personally liable for such loss in the first instance.

If you have a contentious probate matter which you would like to discuss further, please do not hesitate to reach out to a member of our team who will be happy to help discuss your matter further.

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John advises individuals and charities in wills, trusts and inheritance disputes.

John draws upon his background as a non-contentious private client solicitor when dealing, for example, with the construction and effect of Wills and Trusts, and also when structuring tax-efficient settlements on behalf of clients.

Whilst firm in his approach, John is an advocate for the use of Alternative Dispute Resolution, to seek a resolution of disputes in a sensible and proportionate manner.

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Published: 3rd June 2024
Area: Estate Administration

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