Question
of the week Question of the week

Curious. Interesting. Informative.

07 June 2019

Roll the dice

Wills, Powers, Estates & Family Provision Claims
Federal

Asked

Estates – Executor beneficiary re-investment before probate granted

My client as executor of a will is in the process of obtaining probate. She has been left a specific bequest of certain shares in the will. There is an option to participate in a re-investment scheme with respect to those shares. The opportunity will expire shortly. She wants to exercise the option. Can she do so without probate being granted?

Answered

Thank you for the question.

An executor named in a will has a duty to the beneficiaries to protect and maximise the value of the estate. This does not change where a beneficiary is also the executor.

An executor need not wait for a grant of probate to perform this duty – they may intermeddle in the estate where necessary and appropriate. Intermeddling means a named executor dealing with the estate’s assets before a formal grant is made. There is nothing inherently wrong with this. It is not provided for in legislation – it is a common law concept, long recognised. The main consequence of intermeddling is that an executor may thereby lose the right to renounce their executorship. They are effectively treated as though they had been formally appointed from the time they intermeddled. For discussion of when intermeddling might deprive an executor of the right to renounce, see Mulray v Ogilvie (1987) 9 NSWLR 1.

If the executor considers that the exercise of the share option is in the estate’s, and therefore the beneficiaries’, best interests and the opportunity will be lost by waiting for probate, then the executor can choose to intermeddle.

There is still the practical issue of whether the share registry will accept the exercise of the option without a grant of probate.

Regards

Mentor