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Shifting Executors - a trap for lawyers

August 7, 2015

An Executor is a person appointed in a will, who is tasked with ensuring that the deceased's property is dealt with in accordance with their wishes.

 

Many lawyers are asked to prepare wills for clients where the Executors may be professional persons with long relationships with the will maker, usually in the form of their accountant or solicitor.

 

For lawyers there are numerous hurdles, including those within the Solicitors' Rules to accepting an appointment within a will. Most lawyers are familiar with the statutory requirements for a solicitor's appointment as an Executor, however there is another lesser known danger in drafting wills involving the appointment of persons within firms or businesses as Executors.

Known as the rule against "shifting executorship", the rule is an old one and originates from a case in the late 1800s. Despite its age, it is not unusual to come across wills that have been drafted contrary to the rule and there have been a number of cases if recent years also dealing with the issue. 

 

A will drafted contrary to the rule against "shifting executorship" will result in the appointment of the Executor being invalid.

 

So how is a shifting executorship created? 

 

A shifting executorship is created when a will states that the executor will be "the person holding the office of X in Company Y for the time being" or "the person who is the partner of Law Firm X for the time being".

 

Such an appointment is attractive to clients as they wish to utilise the skills of a trusted firm or company, whilst recognising the reality that managers or partners of a business may change in the future.

 

The problem is ambiguity. 

 

The original case involved the will of an English born merchant and politician from Melbourne by the name of Jonathan Binns Were. That's right - the man of JB Were fame.

 

The deceased (Were) sought to appoint as his Executor "the manager for the time being" of a Company. The Court ruled that this appointment was invalid, as the person who held the role of manager could change quickly and regularly and was therefore entirely ambiguous. 

In order to overcome this problem, clauses appointing executors must be drafted very carefully and ensure that there is no uncertainty in the appointment. For instance, if a person who is the manager of a business is to be appointed, then a time should be linked to it - such as the manager "at the time of my death".

 

There are many pitfalls and dangers in will drafting that could result in far-reaching consequences for a person's Estate. The risks are particularly heightened when dealing with larger Estates where a person may have accumulated significant assets over their lifetime. 

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