I’ll also explain what remedies are available if they don’t carry out these duties properly. And if you’re interested in trustees’ duties and remedies in general, these earlier guides covering trustees’ duties and what happens if a trustee breaches their legal duties will give you an overview.
Do executors and trustees have an obligation to keep records?
Yes.
Executors and trustees have a duty to act in the best interests of executry or trust beneficiaries and that includes accounting for their dealings with estate or trust property.
They are expected to act with the same care and diligence that a person of “ordinary prudence” would when dealing with their own affairs and, as such, should keep records and accounts demonstrating how they have handled matters.
How can a beneficiary gain visibility of executors’ and trustees' dealings?
Where a beneficiary has concerns about the way an executor or trustee has dealt with estate or trust property, they can raise what is known as an action of count, reckoning and payment (an accounting action) at the sheriff court.
What remedies are available in an accounting action?
A beneficiary can ask the court to order an executor or trustee to produce an account showing how they have dealt with an estate or trust. If they produce an account, a beneficiary can seek payment of the sum found due after review of that account.
On the other hand, if an executor or trustee fails to defend the action or produce an account, the beneficiary can seek payment of a specified sum, usually an estimate of what they’re owed.
Can a beneficiary challenge an account?
A beneficiary can challenge an account produced by an executor or trustee.
This provides an opportunity to show the amount due to them ought to be greater than the amount shown in the account, for example, because an executor or trustee has withdrawn funds that he or she wasn’t entitled to for their own personal benefit.
The sheriff will consider any objections a beneficiary makes to an account and will then determine what (if anything) should be paid.
Recap
An accounting action can be a complex and time-consuming process. However, if a beneficiary is successful, they may achieve more visibility of how executors or trustees have dealt with estate or trust property, as well as receiving any payment due.
If you’re interested in finding out more about trusts, please get in touch. Alternatively, we’re regularly updating our news and views page with insights and commentary.
