Disputes Amongst Beneficiaries On Death Of A Family Member

14 December 2018

Foo Soon Yien

​In the administration of an estate, disputes may arise between the executor and the beneficiaries. While some disputes may be resolved by agreements between the parties, others may result in the delay of the administration of the estate. If an agreement cannot be reached and the dispute persists, the question is if it is appropriate for an executor of an estate to commence an action seeking orders or directions from the court to finalise the administration of the estate.

A and B named their children, C and D, as executors and trustees of their respective wills. After A’s death, his assets were given to his wife B in accordance with his will. B passed away a few years after A’s death. Under B’s will, her estate was to be distributed in equal shares among her 9 children, including C and D.
 
However, the distribution of B’s estate did not proceed smoothly due to a dispute amongst the siblings regarding two sums of money. The first was a sum of monies paid by C for the renovation of one of A and B’s properties before their deaths. The second sum was the summation of A and B’s medical expenses, which were paid for A and B.
 
After much discussion, C and D came to an agreement with the majority of their siblings for the distribution of the estate, including the disputed sums of money but 2 of the beneficiaries objected. Hence a deed of interim distribution was entered into to pay out the estate monies to the beneficiaries less the disputed sums and sums set aside for legal costs for the dispute.
 
To resolve the contention regarding the disputed sums and to finalise the administration of the remaining assets of the estate, C and D commenced an action seeking the following:
 

1. A determination from the court regarding the disputed sums;
2. An order approving the deed of interim distribution;
3. An order approving the interim distribution made pursuant to the deed; and
4. An order approving the intended final distribution to the beneficiaries.

 
The Applicable Rules
 
The application for orders was made pursuant to Rules 785, 786 and 789 of the Family Justice Rules 2014. Rule 785 clarifies that “administration action” in this division of the Rules refers to “an action for the administration under the direction of the Court of the estate of a deceased person”. Therefore, the Rules under the Division were applicable to C and D’s situation.
 
Rule 786(1) provides the basis for C and D’s application as it states that an action may be brought for the court to determine any questions or reliefs, or to grant any reliefs in relation to an administration action. Rules 786(2) and 786(3) elaborate on specific situations in which the court can determine questions or reliefs. The questions determinable by the court in relation to this case were (i) the administration of B’s estate per Rule 786(2)(a), and (ii) the rights or interests of the beneficiaries claiming to be entitled under the will, per Rule 786(2)(c).
 
The reliefs in C and D’s situation involved the compromise C and D reached with the other beneficiaries through the agreement, per Rule 786(3)(d). The court would be able to make an order approving the agreement reached according to this rule.
 
Rule 789 also states that an order by the court “need not be given or made unless in the opinion of the Court the questions at issue between the parties cannot properly be determined otherwise than under such a judgment or an order.” This was clearly the case as C and D had expended much time and effort in discussing the distribution of the assets of the estate with the beneficiaries who objected, but were still unable to reach an agreement with them.
 
The court eventually made an order approving of the distributions and the draft consent order, thus ruling in C and D’s favour.
 
Comments
 
The court has to attain a balance between giving the executors of an estate the freedom to handle administrative matters and intervening to facilitate the administration of the estate when executors require assistance. Considering how some executors may not be well-acquainted with the law and how it may be difficult for executors to reach a consensus with numerous beneficiaries to the will, applying to courts to assist executors through the making of orders is useful. Also, executors should seek directions or orders from the court if necessary to facilitate the timely administration of the estate.


Foo Soon Yien
Director, BR Law Corporation
[email protected]