PERSONAL
REPRESENTATIVES
PERSONAL
REPRESENTATIVES
Personal representatives (executors
and administrators) are persons who carry out the wishes of deceased persons.
They are referred to as executors/executrix where the deceased person
(testator/testatrix) dies leaving a Will (testate) and appointing them as such;
or referred to as administrators/administratrix where the deceased person dies
leaving a Will, or without a Will (intestate) without mentioning who will
execute his (testator’s) wish, but are appointed through the process of the
Court.
VARIOUS
WAYS OF APPOINTING PERSONAL REPRESENTATIVES
Personal representatives
could be appointed through any of the following means –
1. Express appointment of a personal representative – This occurs where
the testator in a Will clearly identifies the person he desires to carry out
his wishes. In doing this, he is to provide all the particulars like name,
address, occupation of the person named in the Will. The appointment clause may
be drafted as follows –
“I appoint Abi Soki, Embe, Female, businesswoman of
No. 8 Nedu Drive, Bwari, Lagos, as executrix of this Will”.
The reason for this is that it has the advantage of reducing
the likelihood of disputes and litigation, and lessens the difficulty in the
grant of probate by officials of the registry since the person appointed, is
clearly identified.
2. Implied appointment of a personal representative – This is an
appointment that is not expressly made in a Will but may be implied by the
tenor of the Will. In the case of In The Goods of Cook (1902) 71 LJ 49, the
testator stated that she desired one John Goodrick to pay all her just debts;
it was held to be an implied appointment. Thus, in an implied appointment, it
states that a person should carry out some tasks like collection of assets of
the deceased, payments of debts, etc to fulfil the wish of the deceased person.
3. Appointment through a nominee in a Will – This occurs
where the deceased person does not directly name a person in the Will to carry
out his/her wishes, rather nominates another person in the Will to appoint an
executor after he is deceased.
4. Appointment by the court – This occurs where the court
exercises its power to appoint a person as personal representatives of a Will.
For the courts to make such appointments, the following situations need to
occur –
a)
Where the Will does not appoint a personal representative – Order 55 Rule 42 of the High Court Civil
Procedure Rules, Lagos.
b)
Where the personal representative is outside jurisdiction.
c)
Where a personal representative or beneficiary applies to
court for the appointment of a substituted personal representative.
d)
Where there is a pending suit (lis pendens) on the validity of the Will or for obtaining,
recalling or revoking any grant; the court may appoint a general administrator
to the estate – section 27(10 of
Administration of Estate Law (AEL), Lagos.
e)
Where in a trust, there is a minority or life interest and no
personal representative exist to deal with the trust, the court may appoint
additional persons as personal representatives to deal with that person.
5. Appointment by representation – This occurs
where there is more than one executor. In the event of any of them dying, the
others will carry on the duties of the office of the executor. But where the
last one dies having taken probate, any executor of the deceased person’s Will,
will be regarded as the executor of the first testator, so long as he obtains
probate of the second testator’s Will. In such instances, the second executor
cannot take the office of the first executor’s executor without also taking on
the office of the original testator’s personal representative, and if he does
not want to deal with either taking the office of the first executor’s executor
and the office of the original testator’s personal representative, he must
renounce both
6. Executors de son
tort (of his own wrong) – Under this, such
executors are not really appointed but are only persons who have intermeddled
with the estate of the deceased person. Due to this, they are taken to be
personal representatives of the estate of the deceased person – Order 55 Rule 3 of the High Court Rules
Civil Procedure Rules, Lagos, 2004. The executor is de son tort because he has assumed the role of executor without any
lawful warrant or authority, but who makes himself liable as executor to the
degree of his action due to his intermeddling with the estate. In Re Odutola
(2002) FWLR (Pt. 119) 1624 at 1632, the court held that if a person
performs any act in relation to the property of a deceased person which
indicates an intention in him to take upon himself the administration of the
estate of the deceased person, such act is permissible and will be construed as
an acceptance by the person of the office of executor or administrator, subject
to the proviso that such act is not of nominal a character as to amount only to
technical intermeddling. For example, where a person collected the assets and
paid the debts of a deceased person. In Long & Feaver v. Symes & Hamman
(1832) 3 Hag. Ecc. 771, where some persons inserted an advertisement
calling on all persons who had any claim on the estate of the testator to send
in their accounts and to pay all money due to the estate to the named persons
as his “executors in trust”, it was held that they were executors of the
estate. Also, in Adeniyi Jones v. Josephine Martins (1943) 9 WACA 100, where a
person collected rent on the property of her deceased brother, the court held
that she was liable to the plaintiff to pay for services that were rendered to
the deceased brother, while he lived. It should, however, be noted that an
executor de son tort (of his own
wrong) is liable to make accounts for any assets he deals with.
In circumstances where there
is a dispute between the executors or between executors and beneficiaries, or
between beneficiaries and the properties under the estate are at some risk, the
court may appoint administrator pendent
lite (pending suit) to manage the properties pending the resolution of the
dispute; and such appointed administrators are liable to account for the period
of his administration. In Ladejobi v. Odutola Holdings Ltd. (2002) 1
WRN 94, it was held that such appointed administrator does not need to
apply for a grant of letters of administration because the courts takes notice
of the appointment. However, such appointed administrators are not to interfere
with the estate of the deceased person while there is a pendete lite.
PERSONS
WHO CANNOT BE APPOINTED AS PERSONAL REPRESENTATIVES
1. Infants, though,
they can be appointed as personal representatives, they will not be granted
representation until they reached the full legal age.
2. Mentally
challenged persons will also not be granted representation because of
incapacity.
3. Native laws and
customs also restrict persons who could be appointed as administrators of the
estate of a deceased person who dies intestate. For example, a widow under the
Yoruba ethnic group cannot be appointed as personal representative because she
is regarded to inherit or benefit from the estate of her deceased husband. In Akinnubi
v. Akinnubi (1997) 1 SCNJ 202, it was held that a widow is neither
entitled to apply for a grant of letters of administration nor to be appointed
as co-administrator for her husband’s estate. Such widow can however
successfully sue to protect the estate as the next-of-friend to her infant
children but not as a guardian ad litem.
PERSONS
ENTITLED TO LETTERS OF ADMINISTRATION IN INTESTACY
Section
26 of the Administration of Estates Law, Lagos provides that the court has
the discretion to grant administration to persons having regards to the rights
of all the parties interested in the estate as well as the materials placed
before the court – Asere v. Asere (1992) 6 NWLR (Pt. 197) 316. In Williams
v. Ogundipe (2006) All FWLR (Pt. 327) 540 at 552, per Ogunjobi JCA, it was stated that “The concept of interest in this respect is not mythical but legal and
provided by the law”. This means that the law has set out persons who could
be granted administration of the estate of deceased persons in intestacy.
Section
49(1) of the Administration of Estates Law (AEL), Lagos lays down some
guidance on the order of priority of persons who could be granted letters of
administration in intestacy –
1. Husband or wife (spouse)
of the deceased person.
2. Children of the
deceased person or the surviving issue of a child who died in the lifetime of
the deceased person.
3. Father or mother (parents)
of the deceased person.
4. Brothers or
sisters of the deceased of full blood and the children of such brothers or
sisters who died in the lifetime of the deceased person.
5. Brothers or
sisters of half blood of the deceased person or the children of any such half
brother or sister who died in the lifetime of the deceased person.
6. Grandfather or
grandmother of the deceased person.
7. Uncles and aunts
of full blood of the deceased person or their children.
8. Creditors of the
deceased person.
9. Administrator
General (where all the preceding persons fail) – Kekereogun v. Oshodi (1971) ANLR
95.
The Court of Appeal in
interpreting section 49(1) of the AEL, Lagos held in Williams v. Ogundipe (supra) at
552 & 555, that “from the above deductive conclusion, it is clear
that the surviving spouse and children
of a deceased person take priority and exclusive right to the estate of the
deceased”, and in a situation where the solicitor to the widow of the deceased
person applied as co-administrator along with the widow, he was held to be “...
nothing more than a busy body trying to reap where he has not sown.”
Where a person married under
the Marriage Act dies intestate, the estate of the deceased person will be
distributed according to the provisions of the Administration of Estate Law and
not the custom of the deceased person – Obusez v. Obusez (2007) All FWLR (Pt. 374)
227; (2007) 10 NWLR (Pt. 1043) 430.
NUMBERS
OF PERSONAL REPRESENTATIVES THAT CAN BE APPOINTED
There is no statutory
limitation or restriction as to the number of personal representatives. In
practice, it is a minimum of two and
maximum of four. Thus, probate will
not be granted to more than four persons – section
24(1) of Administration of Estates Law (AEL), 2004.
It is advisable to have a
minimum of two in case any of the two persons appointed predeceases the
deceased person. However, where more than four persons are appointed, only the
first four will be recognised to act as personal representatives while the
remaining, if any, will wait till there is a vacancy due to death,
renunciation, sickness, etc. to fill any vacant part.
There are several advantages
in appointing not less than two personal representatives –
1. Sole executor may
die before the testator and the testator may have to make a codicil to appoint
another one. Where there is more than one executor, the others will continue to
act even if one of them dies.
2. More executors to
a Will aid in “division of labour” and the sharing of responsibilities among
the executors, for example, while one executor can be in charge of funeral
expenses, another can be in charge of collection of assets of the deceased
person, etc.
3. Where there is
more than one executor, it will facilitate the effective administration of the
estate because where other executors are busy or unavailable; the others will
act on behalf of the estate.
However, the
major disadvantage of appointing more than one personal representative is that
it amounts to conflicts among them. In Ibrahim v. Ojomo (2004) All FWLR (Pt. 199)
1285 at 1308, two out of the three administrators signed the deed of
lease of the property to the defendant. The third administrator did not consent
to the transaction. The Supreme Court set aside the transaction and stated thus
–
“... since the
right and interest of the administrators or administratrixes of any estate is
joint in the estate, they must operate together and the giving out of such
right or interest by some of them to any one does not bind the others who do
not give their consent thereto”.
QUALITIES
OF PERSONS TO BE APPOINTED AS PERSONAL REPRESENTATIVES
1. Willingness and availability of the person – Personal
representatives must be persons who are willing and available to administer the
estate. Where they are very busy or unavailable to devote time to the estate of
the deceased.
2. Capability to manage the estate – Personal
representatives should be persons of integrity in order to honestly discharge
the duties of personal representatives. They should not have any tendency to
make unjust gains from the estate.
3. Persons who has no conflict of interest with the
estate of the deceased – Personal representatives should not have any conflict
of interest with the estate of the deceased person because any conflict of
interest will blur the personal representatives from discharging the functions
of his office.
4. Should be younger than the deceased person – Personal
representatives should be younger and in good health, though, there is no rule
that prevents older persons from being appointed. The reason is that younger
persons have the presumption of not predeceasing the deceased person due to
their good health.
5. Knowledgeable – Personal representatives
should have some level of literacy, at least being able to read and write.
6. Credibility and honesty – Personal representatives
should be easy to believe. Thus, inspiring trust and confidence.
7. Persons that can work in harmony with each other – Personal
representatives should be able to work in harmony with each other without
conflict among them.
8. Knowledge of the business of the testator – Where the
deceased was involved in some specialised business, the personal
representatives should have knowledge of the business the testator was involved
in.
9. Logistics and convenience – Personal
representatives should be persons who do not reside outside the country or in a
far distant part of the country where the majority of assets of the testator
are.
ENTITLEMENT
OF REMUNERATION OF PERSONAL REPRESENTATIVES
The general rule is that
personal representatives are not entitled to remuneration because their
services are gratuitous – Re Orwell.
There are however some
exceptions to the general rule. They are –
1. Where the court makes an order – Where an executor
to a Will applies to court for remuneration, the court may use its discretion
to compensate the executor, but the court will firstly consider factors like
the difficulty of the task performed or being performed, and whether the estate
of the deceased person can bear the cost of remuneration. Order 55 Rule 43 of the High Court Civil Procedure Rules, Lagos provides
thus –
“The judge may direct that any administrator (with or
without the Will annexed) shall receive out of the personal and real estate of
the deceased such reasonable remuneration as he shall deem fit not exceeding
ten percent (10%) on the amount of the realised property, or when not converted
into money, on the value of the property duly administered and accounted for by
him”.
2. Under the rule in Craddle
v. Piper (1850) Ch. 107; 41 ER 1422 – The rule in Craddle v. Piper states that a
solicitor-trustee or his firm is entitled to profit costs for work done in
connection with litigation on behalf of the personal representatives jointly,
as long as the costs have been increased by his being one of the parties. It
should be noted that the rule applies only to executors/trustees who are law
professionals and not to other professionals who are trustees of the Will.
3. Where there is a charging clause in the Will – A charging
clause in a Will is a declaration by the testator allowing or permitting his
executors to charge and be entitled to their usual professional fees rendered
by such professional in the administration of the estate of the testator.
There is no
statutory format for a charging clause. An example is –
“I authorise that any of my trustees who is a
solicitor or other persons engaged in any profession or business shall be
entitled to charge and be paid all professional or other charges for business
done, services rendered or time spent by him or his firm in the administration
of my estate or this trusts, including acts which a trustee not engaged in any
profession or business could have done personally.”
However, where there is a
charging clause, the executors should not be witnesses in the Will as they will
lose any gift including professional fees that they are entitled to under the
Will – section 8 of Wills Law, Lagos;
section 15 of Wills Act; In Re Pooley
(1889) Chd. 1.
PERSONAL
REPRESENTATIVES WITHDRAWING OR RENOUNCING REPRESENTATION
Renunciation of
representation is the express refusal by a person to take up probate or grant
of letters of administration.
An executor can renounce his
appointment as executor, which must be a positive act and not a passive act.
Thus, any person appointed as a personal representative is at liberty to refuse
it. Renunciation has to be expressly signified in writing to the Probate
Registrar, and might therefore be required to file form for renunciation or
file an affidavit disclosing his renunciation; and the fact that an executor
does nothing is not evidence of renunciation, renunciation must be complete and
not partial. Therefore, he must renounce administration of the whole estate – Paul
v. Moodie 81 ER P. 706.
Also, renunciation by an
executor can be withdrawn at any time – Order
55 Rule 67(3) of the High Court Civil Procedure Rules, Lagos. He can do
this with the permission of the Probate Registrar. He must however, adduce
exceptional circumstance for the leave or permission for withdrawal to be given
– proviso
to Order 55 Rule 67(3) of the High Court Civil Procedure Rules, Lagos.
However, whatever thing that
is done by other person upon the grant of administration with the Will attached
before the withdrawal of the renunciation by the executor remains valid.
There are circumstances in
which a personal representative cannot renounce representation. These are –
1. Where a person
renounces representation, he can only gain back his office with the leave and
permission of the court and only where this would be for the benefit of the
estate and of persons interested in the estate. The fact that a person was
wrongly advised to renounce probate does not entitle him to retract his
renunciation – In the Goods of Gill (1873) LR. 3, P & D. 113.
2. Where an executor
fails to accept or renounce probate, the court may issue what is referred to as
‘Citation’ calling on the person to formally accept or renounce probate. Order 55 Rule 7 of the High Court Civil
Procedure Rules, Lagos, provides that the court may of its own or on the
application of any person claiming an interest under a Will, give notice to the
executors therein named, to come in and prove the Will, or to renounce probate,
and they, or some or one of them, shall within twenty (21) days after notice,
come in and prove or renounce accordingly.
DUTIES OF PERSONAL REPRESENTATIVES
Personal representatives have enormous duties and
responsibilities in
respect of the estate of the testator which they administer.
They therefore owe
the following duties –
1.
To prove the Will by applying to
the probate registry – A will can be proved in common
form (if it is not
contested or challenged), or in solemn form (if it is
challenged). Personal
representatives have the duty to ensure the general nature
of the Will is
effected by applying for probate at the probate registry, and proving the Will especially
if it is contested by any person. The testator can be and is usually
cited to obtain or refuse probate. Where he intermeddles with the estate
without taking out probate, he can be compelled to take probate. If any named executor in the Will
of the deceased person takes possession and administers or otherwise deals with
any part of the property of the deceased, and does not apply for
probate within three
(3)
months after the death,
or after the termination of any suit or dispute respecting probate or
administration, he may, independently of any other liability, be deemed to be
in contempt of the court, and shall be liable to such fine not less than fifty thousand naira (N50,000), as the judge may deem fit to impose – Order 55 Rule 8, Lagos.
In instances where there is more
than one executor, all the executors have
the right to apply for probate. Thus, probate cannot be granted to some
of the executors to the exclusion of others, otherwise the probate so granted
may be revoked unless any of them had previously renounced probate – Adesoga v. Probate Registrar
(2000) LHCR 7.
2.
To ensure the testator is given
decent burial – Personal
representatives have the duty to
ensure the testator is given a befitting burial. In some cases, the
testator may have left instructions on how he would like his burial to be
conducted, which may not and should not be contained in the will.
3.
To collect and gather properties
in the estate, and exhibit on oath – Personal representatives
have
a duty to ascertain the nature and value of the estate, to gather all the items
of property constituting the estate wherever they are for the purpose of settling any liabilities against
the estate and also for the sharing to persons who are entitled under the Will
or incidences of intestacy – Admin-General & Public
Trustee v. Ilobi (1972) ECSLR 587. When the Probate Registrar is an
executor, he needs not wait for the grant of probate to take steps to preserve
the estate. In Ogbe & Ors v.
Ogbe (unreported) Suit No: 8/3/1969 High
Court of the Midwest, Benin Judicial Division per Irikefe J,
the executors of the will of the deceased, took out a writ seeking an order of
injunction to restrain the widow of the deceased from further meddling with the
estate. The contention of the widow that the executors had no locus to
bring the action until they were granted probate was rejected by the court.
It should be noted that a personal
representative will only be liable for loss resulting from his failure to act
if he has acted unreasonably.
4.
To pay out all liabilities and
debts of the testator – Personal representatives have the foremost duty of payment of the debts
and liabilities of the deceased person. All
debts and liabilities of the testator and those arising from the estate would
be paid out of the estate, including capital transfer tax. Thus, the real and personal
properties of a deceased person are primarily meant for the payment of the
deceased person’s debt – section 36(1)
of Administration of Estates Law, Lagos.
Personal representatives must exercise due diligence in the payment of debts
owed to all creditors and entitlements of all beneficiaries; else, they would
be personally liable for any loss suffered by a creditor or beneficiary as a
result of their indolence. The personal representatives must also pay
for funeral expenses, testamentary and administration expenses. These are essentially –
a) Cost of obtaining a grant of
probate or letters of administration;
b) Cost of gathering assets in the
estate of the deceased person; and
c) Administration expenses, such as
solicitor’s fees, fees for valuers and other professional fees made for and on
behalf of the estate.
5.
To ascertain beneficiaries
entitled to the estate and Distribute the Assets – Personal representatives have a duty to
ascertain the beneficiaries that are entitled under the Will and
distribute the estate in accordance with the wishes of the testator as
expressed in his Will
or under the rules of intestacy. Where they fail to
conduct adequate search, they might be liable to a beneficiary that suffers
loss as a result of their negligence. Where the administrator is granted
Letters of Administration over personalty, whether or not it includes realty
depends on the provision of the applicable Administration of Estate Law – Shobogun
v. Sanni (1974) All NLR 816; Ugu v. Tabi (1997)
7 NWLR (Pt 513) 368.
The mode of payment of debts and
liabilities depends on whether the estate is solvent or insolvent.
Where the estate is solvent – Part II of the Schedule to Administration
of Estates Law, Lagos, the order of application of assets shall be –
a) Property of the deceased person
that has not been disposed by Will, subject to retention of funds sufficient to
meet pecuniary legacies.
b) Property of the deceased person
not specifically devised or bequeathed in residuary gift subject to retention
of funds sufficient to meet pecuniary legacies.
c) Property of the deceased person
specifically devised, charged or bequeathed for the payment of debts.
d) Properties specifically devised or
bequeathed that are rateable according to value.
e) Funds retained to meet pecuniary
legacies.
f) Property appointed by Will under a
general power rateable according to value.
Where the estate is insolvent – Part I of the Schedule to Administration of
Estates Law, Lagos, the order for distribution shall be –
a) Funeral, testamentary and
administration expenses.
b) All local rates and taxes due from
the deceased at the time of his death.
c) All wages and salary of any clerk
or servant in respect of services rendered to the deceased during four (4)
months before the period of death.
d) Wages of labourer or workman.
e) Amounts in respect of compensation
under the Workmen’s Compensation Act.
6.
Duty of Care – Personal representatives have the
duty of reasonable care in the management of the estate. He
must not waste the estate’s assets. Where he does such, he
and his personal estate would continue to be liable to the estate of the
deceased, even after his death – section
19 of the Administration of Estates Law, Lagos.
7.
Duty to Act in Good faith – Arising
from the fact that they are in a fiduciary relationship with the estate of the
deceased, personal representatives have a duty to act in good faith in their
administration of the estate of the deceased. They must not convert the
assets in the estate
for their own use; otherwise they would be liable for
such conversion.
8.
Account and Inventory – Personal representatives have a
duty to maintain proper account and records of the estate. He
should also
maintain an inventory. He
might be required to exhibit on oath in the court a true and perfect inventory
and account of the real and personal estate of the deceased –
section 14 of the Administration of Estate
Law, Lagos. Personal representatives must
therefore keep the account of the estate and also of their dealings with the
estate. The account shall be open for inspection by persons interested in
the estate.
9.
To Issue Assent – Both
real and personal assets comprised in the estate of the deceased are vested in
the personal representatives. Title to assets in the estate, especially
in the case of realty would only pass where the executor grants assent to the
beneficiaries thereof
– section 3 of the Administration of
Estate Law, Lagos.
Once
an assent is issued, the executor is divested of the legal estate in such property –
Wise
v. Whitburn (1924) 1 Ch 460; Cappa Ltd v. Pereira (1966) 1 All NLR 57.
The assent vests the legal estate in the beneficiary. For an assent to be
valid, it must be in writing, signed by all the executors that prove the Will,
and must contain the
names of the beneficiary – Renner v. Renner (1961) All NLR
233. The personal representatives cannot refuse to execute an
assent without a good cause. They are liable to be compelled to give the assent – Martin
v. Wilson (1913) 1 IRR 470. However, in Unoka v. Agili (2007) NWLR (Pt. 1044)
122 where it was held that a beneficiary has no right to sue
for the protection of the assets in the estate of a testator; that the real
estate or chattels-real vest in the executors who are the representative of the
testator and heir at law to the estate of the testator.
LIABILITIES OF PERSONAL REPRESENTATIVES
The liabilities
of a personal representative are –
1.
Liability for
Waste and Conversion – Where an administrator converts to his use or waste assets
in the estate, he and his estate shall be liable and even if he dies, his
estate shall continue to be liable. Where a personal representative commits a
breach of any of their duties, which results in a loss to a creditor or
beneficiary, he is said to have committed devastavit
(wasting of the assets in the estate of the deceased person). Where there
are multiple grantees, each is responsible for his actions. A personal
representative may be liable for the actions of another representative in the
following instances:
a)
He acquiesced in the breach by another personal
representative; or
b) The breach arose
from a breach of the duty of the personal representative.
2.
Liability to
Creditors or Beneficiaries – Where personal representatives wrongfully
distribute the assets as a result of negligence or not being aware of the
existence or whereabouts of a beneficiary or creditor, they may incur personal
liability in favour of that beneficiary or creditor.
3.
Where he
intermeddles with the estate without taking out probate –Where he intermeddles with the estate without taking out
probate, he can be compelled to take probate. If any named executor in the
Will of the deceased person takes possession and administers or otherwise deals
with any part of the property of the deceased, and does not apply for probate within three (3) months after the death,
or after the termination of any suit or dispute respecting probate or
administration, he may, independently of any other liability, be deemed to be
in contempt of the court, and shall be liable to such fine not less than fifty thousand
naira (N50,000), as the judge may deem
fit to impose – Order
55 Rule 8, Lagos.
4.
To pay
inheritance and other estate taxes – Personal representatives are
liable to pay inheritance and other estate taxes that may be imposed on the
estate he is administering. Thus, he cannot postpone payment of the taxes since
this is part of the liabilities of the estate.
5.
Liability for
co-representation – The estate of the deceased person is not divisible but joint
in the sense that they agree in their actions. Therefore, one representative
cannot claim that he will administer one part while the other representative
will administer the other parts and none of them can release his interest to
the other – Ibrahim v. Ojomo (2004) All FWLR (Pt. 199) 1285.
6.
Liability as
executor de son tort – Where a person,
without authority, intermeddles with the estate of a deceased person, he does
that with grave consequences, and will therefore be liable to the extent of
what he received from or realised out of the estate. He will also bear any of
the following liabilities –
a) Liability for any
loss suffered by the estate;
b) Liability to pay
for services rendered to the estate during the period of intermeddling or in
the lifetime of the deceased;
c) Liability to
creditors.
d) Liability for
personal expenses.
e) Liability to pay
fine.
f) Liability for
Inheritance Tax.
g) Liability for
citation.
ACCOUNTS TO BE MAINTAINED AND FILED BY
PERSONAL REPRESENTATIVES
The law
requires every executor or administrator to maintain the account of the estate
of the deceased and to file in Court an account of his administration every
twelve (12) months from the date of the grant or the appointment until the
completion of the administration – Order
55 Rule 46(1) Lagos; section 14 of
the Administration of Estate Law, Lagos; Cooper v. Skinner (1904) 1 Ch
189; Sawyer v. Goddard (1895) 1 Ch 574. Any such Executor or
Administrator who fails within the prescribed period to file his accounts shall
be liable to a penalty of N100.00 (One
hundred naira) for every day of default. Non-payment shall be enforceable by
distress, and failing sufficient distress, by imprisonment for a term not
exceeding six (6) months – Order 55 Rule
46(1) Lagos. Thus, every personal representative must keep accurate
accounts and be ready to render such accounts whenever called upon to do so or
as prescribed by law – Thompson v. Dunn (1870) 5 Ch App 573; Sawyer
v. Goddard (supra).
The accounts shall include –
1.
an inventory of all assets in the estate;
2.
an account of all monies received on behalf of the
estate, purchases made, out of pocket expenses, and other necessary account of
the administration;
3.
the vouchers in the hands of the Executor or
Administrator relating to the administration of the estate; and
4.
an affidavit in verification – Order 55 Rule 46(9) Lagos.
The accounts shall
be opened for the inspection of any person interested in the administration – Order 55 Rule 46(8), Lagos.
EFFECT OF EITHER FAILING TO FILE THE
ACCOUNT OR FILING INACCURATE ACCOUNTS
Accounts which are
not backed up with those requirements (e.g. audited accounts showing only
figures) may not be accepted by the Court.
When an
account is filed in Court, the Court shall scrutinize such account and if it
appears that by reason of improper, unvouched or unjustifiable entries or
otherwise such account is not a full and proper account, the Court shall
require the person filing the account to remedy such defects as there may be
within such time as the Court may deem reasonable for the purpose, and on
failure to remedy such defects within such time, the person who filed such
defective account shall be deemed to have failed to file an account within the
meaning of the rule and proceedings may be taken against such person
accordingly – Order 55 Rule 46(3) Lagos.
It shall be the duty of the Registrar to bring to the notice of the Court the
fact that any personal representative has failed to file his accounts as
required by the Rules– Order 55 Rule
46(4) Lagos. The Court may on the motion of any party interested, or suo
motu, summon any personal representative who fails to file the accounts
within the prescribed time or in the proper manner, to show cause why he should
not be punished. However, the Court may extend the time for filing such
accounts – Order 55 Rule 46(5) and (6)
Lagos. Any personal representative who has been granted an extension of
time to file such accounts, and who fails to file the accounts within such
extended time, shall be liable to the penalty – Order 55 Rule 46(7) Lagos.
Precautionary
Measures – Some well established basic precautionary measures that may ease
compilation of acceptable accounts and forestall future embarrassments are as
follows:
1.
Keep proper accounts in a form that will be
self-explanatory and ensure accuracy and clarity such that at any given time it
is able to offer correct information as to the true position of the estate
under administration;
2.
Operate a separate Bank Account in the name of the
estate and refrain from lodging estate money into personal account;
3.
Make payments out of the estate account preferably by
cheque;
4.
Obtain duly stamped receipts, school and hospital
bills, vouchers and invoices etc, submitted preliminary to payments and the
stubs of cheques issued in support of expenditure made; it should be noted that
an under-aged or a mentally incapable person cannot give a valid receipt for
his own share of the estate. Payment should be made to his Guardian for his use
and benefit until he attains majority (18 years) or regains mental capacity.
5.
Keep and preserve all counterfoils of receipts issued
for all incomes (and materials) into the estate or and all related documents.
When
Accounts are desirable – Accounts may be called for by the Registrar in the
following circumstances –
1.
Where a complaint of maladministration is lodged in the
Registry against an Executor or Administrator.
2.
Where an application is made to the Court for
removal/discharge of an Executor or Administrator before administration of an
estate is completed.
3.
Where any Executor or Administrator who has been issued
a grant himself applied to the Court with a view to surrendering the estate
vested in him to the Administrator-General pursuant to Section 32(1) of the
Administration of Estate Law, Lagos.
4.
Where, on completion of administration of an estate,
Executors or Administrators thereof apply to the Court to be discharged.
DISCHARGE
FROM LIABILITIES
Personal representatives may be discharged from liability for
administering the estate of the deceased. Where the Probate Registrar files the final accounts upon the completion of the
administration of the estate, and the court is satisfied as to the contents of
the accounts, the Probate Registrar would be
discharged from the administration bonds entered at the time of application for
grant.
Generally, the Probate Registrar, the bondman or guarantor remains liable until the due
administration of the estate. If there is any failure on the part of the Probate Registrar to pay appropriate fees, or file appropriate accounts, the
bondman or guarantor may be made liable to forfeit the bond or pay for the
inaction of the Probate Registrar – Chief
Registrar v. Somefun, where the Probate Registrar failed to pay additional court fees in respect of money
received as proceeds of sale of real property of the estate by the Probate Registrar, the court ordered the fees to be paid by the bonds man.
Where the bondsman or
guarantor forfeits any bond or pays anything as a result of the action or
inaction of the Probate Registrar, they are
entitled to indemnity from the Probate Registrar.
Where
the estate has been duly administered by the Probate Registrar, the liability of the Probate Registrar or the bonds man ceases; they are accordingly exempted from
liability for any loss that may arise subsequently. However, it should be noted that a personal
representative can only be discharged from the administration bond by the court
at the completion of the administration. That is, after the satisfaction of all
legitimate claims on the estate, and the distribution of the residue of the
estate, the Probate Registrar must file in
court an account of how the administration was conducted.
This
discharge may be as a result of –
1.
The Express
Provision in the Will – The testator may have provided that the executors
would be protected from liability for all acts except that of
dishonesty. Therefore, where the loss suffered by the creditor or
beneficiary is not as a result of dishonesty or fraud on the part of the
executor, the executor would be free of any liability.
2.
Relief obtained
from the Beneficiary or Creditors affected – The affected beneficiary or
creditor may release the executor from the breach only if he, the affected beneficiary
or creditor, is aware of the breach and is of a full age and capacity to make
such decision.
3.
Relief from the
Court – Where the executor acted honestly and reasonably, and ought fairly to be
excused from the breach, the court may relieve him of the liability. To be
entitled to court’s relief, he must show that he acted honesty and reasonably,
and not negligently.
4.
Plea of
Limitation – Just like every cause of action that is subject to statute of
limitation, personal representatives can rely on the general plea of
limitation, that is, that the cause of action has become statute-barred. Claim
by a creditor, for instance, becomes statute-barred if made after six (6)
years; but that of a beneficiary can only be statute-barred after twelve (12)
years. However, where the personal representatives fraudulently commit the
breach or are guilty of converting the assets in the estate into their personal
use, statute of limitation will not apply. This period of limitation may
be extended for the creditor or beneficiary where it was either concealed by
the personal representative or where owing to the disability or other
incapacity of the beneficiary or creditor, action could not be initiated on
time, or on any other reasonable and justifiable ground.
WINDING-UP OF THE
ESTATES
Winding-up of estates of a deceased takes place upon a
conclusive administration of the estate under the terms of the probate or the
letters of administration. Winding-up is an indication that the estate is fully
administered. A major responsibility of a personal representative is to prepare
and file final accounts on the administered estate, as this is one instance in
which a personal representative is expected to file account.
ETHICAL ISSUES
1.
A solicitor drafting a Will or advising the estate of a
deceased person should ensure that persons who take up representation should
meet the required qualities personal representatives.
2.
A solicitor who has no interest in the estate should
not impose himself in the office of a personal representative.
3.
Where a solicitor is appointed as an executor, he
should faithfully administer the estate according to the general nature of the
Will, and should refrain from doing anything that will be contrary to the
interest of the estate.
4.
Where a solicitor is an executor, he should not
instigate, encourage or participate in the appointment of his firm as
solicitors to the estate – Rule 47(1) of
the RPC.
5.
A solicitor should refrain from charging for
remuneration where the Will does not expressly provide for that.
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