Beneficiaries: Rights Over an Estate
Following a bereavement, the last thing you want to think about is solicitor’s bills. However, dealing with an estate can be complicated and many people will turn to a solicitor for help with the solicitor’s costs to be paid from the estate.
If you are the person benefiting from the estate then this means that the costs are reducing the amount you might receive from the estate. Until a recent case was decided, the standard view was that beneficiaries didn’t have much say over these costs, or scope to challenge these costs, unless they were also the person administering the estate.
What roles do beneficiaries have?
The role of a beneficiary is quite simply to collect what was left or due to them. Beneficiaries have only limited legal rights in respect of an estates’ administration. The main legal right of a beneficiary is to have their named share once the administration had been completed. It is the executors of the estate that have the legal rights to deal with the administration, including the costs of the administration. The same principle applies for trusts.
Recent Changes: Daniel Kenig v Thompson Snell & Passmore LLP
Earlier this year the Court of Appeal gave judgement on an appeal brought by Thompson Snell and Passmore LLP on the case, Daniel Kenig v Thompson Snell & Passmore LLP.
In this case, the estate of a deceased Philippa Cunnick was being administrated by a solicitors firm called Thompson Snell & Passmore LLP under instructions of an executor. Daniel Kenig, one of the estate’s beneficiaries and son of the deceased, queried the large legal costs which were being incurred and charged against the estate. The law firm had originally quoted £10,000-£15,000 as an estimate for the legal costs associated with carrying out the administration, but subsequently charged a total of £54,410.99 across eight separate bills.
The Court of Appeal accepted that the beneficiary had a right to challenge the bills charged even though he was not the law firm’s direct client. The Court also dismissed the law firm’s appeal, making reference to The Solicitors Act 1974. Ultimately, the Cost Judge deemed ‘that the sums claimed in the bills called for an explanation’ and that the beneficiary of the estate was entitled to demand that explanation.
As a result of the judgment, whilst executors will continue to authorise costs incurred on behalf of an estate until completion of the estate administration, the Court’s decision re-enforces the executor’s duty to consider the interests of any third parties, such as the estate beneficiaries, when making a decision in relation to costs incurred. Not only that, but the judgment upheld the voice of a beneficiary who, as we know from above, had no legal right to influence decisions made by executors on behalf of an estate, marking a turning point for beneficiaries on costs.
How can Ellis Jones help you?
If you’re a beneficiary of an estate, a will or a life insurance policy, or a trustee to a trust, and feel as though you could benefit from seeking legal advice, our expert Daniel Flynn in the Dispute Resolution team can offer a reliable service with a wealth of experience and knowledge in dealing with contentious trusts and probate.
Please do not hesitate to get in touch with us by emailing daniel.flynn@ellisjones.co.uk or via our online website enquiry form.
About the author
Daniel is a Senior Associate Solicitor in our Dispute Resolution department and is based in the London office. He is a member of the Association of Contentious Trust and Probate Specialists (ACTAPS) and has extensive knowledge and expertise in disputed trusts and estates.
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