devastavit

 

Dishonest executors can devastate an estate and ruin families and relationships. When you appoint someone as executor you do so hoping and expecting that they will manage your estate responsibly. But what happens if they don’t? If they fail to fulfill their duties and protect the estate for the beneficiaries then this is called devastavit.

As part of the administration of the estate, it may be necessary to sell assets so that all debts and estate expenses may be paid.  In some cases, it is very unhelpful for assets to be sold as part of the administration of the estate and it may be more helpful for them to be kept intact and appropriated to beneficiaries as part of their inheritance. The administration of an estate is often complex, and should always be done in conjunction with sound legal advice. However, sometimes executors – particularly dishonest executors – don’t seek legal advice.

Devastavit is a legal term that applies to dishonest executors. This is a word that is really only used nowadays in a law context.  It sounds and looks like devastating because they both come from similar latin origins.  Devastate comes from the classical latin devastatus: to lay waste. Devastavit derives from the medieval latin meaning: he/she has spoiled or “he had laid waste“.

In law terms, devastavit is the squandering or misapplying of estate assets.  It’s a term used to describe the mismanagement and waste of an estate that then causes a loss from that estate to the beneficiaries. Beneficiaries are those that receive a gift or inheritance from a will. Dishonest executors choose to administer the estate inappropriately, leading to the beneficiaries suffering a loss.

Devastavit claims are mostly brought against executors because they are the ones responsible for administering the estate.  The role of the executor is a serious one and when choosing an dishonest executors, executors of an estate, estate administration, probate, grant of probateexecutor you must choose someone who is honest and trustworthy. There are duties that the person must perform as part of their role as executor.  If the executor does not discharge their duties then they may face claims that they have committed a “devastavit” on this estate.  The executor may have to compensate any losses that the beneficiaries of the estate suffer as a result of their damaging actions (or inactions). Dishonest executors can be held personally liable for any loss suffered by the estate.

Mismanagement by an executor is usually through dishonest means.  Devistavit actions are usually brought against executors that are using money or items from the estate in an extravagant fashion, and sometimes it’s just blatant robbery.

Dishonest Executors Lead To Estate Battles

David Graham and Alexander Graham-Sult are the sons of Bill Graham, who was one of America’s leading rock musician promoter until his tragic death in 1991.  Graham’s sons attempted to sue the executor of their father’s estate, Nicholas Clainos, saying that he sold some of their father’s personal memorabilia, cheating them out of treasures they should have received as beneficiaries. This was a claim of devastavit.  Fortunately for Clainos, it was proven to the court that the memorabilia was owned by a separate company and not Graham himself, meaning that devastavit had not been committed in this case. This case shows the importance of understanding exactly how assets are owned. Anything owned jointly or by a company can’t be dealt with by a will, nor can your superannuation. Careful estate planning must take into account assets that aren’t personally owned and highlights the fact that often a will is not enough.

In other cases, though,it is shown that the executor has been dishonest.  June, Robyn and Graham are the adult children of Shirley who died four years ago.  June was named executor and supposed to split the money evenly with her siblings, but she didn’t.  When Robyn became suspicious after the money didn’t arrive in her account and her sister refused to settle the estate, she and her brother had the court forcibly remove her as executor.  It was found that June had dishonestly taken $75,000 from her mother’s estate – a sum that Robyn and Graham are unlikely to ever see again.

Superannuation and Dishonest Executors

A recent case in the South Australian Supreme Court of Brine v Carter [2015] highlights the importance of the duties of an executor. The deceased was a member of a public offer super fund. He appointed his 3 adult sons and his de facto spouse as the executors of his Will. As such, under the fund trust deed these persons (and the deceased’s estate) were also eligible recipients for the payment of death benefits from the super fund. But the deceased had failed to make any binding death nominations, meaning that the super fund would have to use it’s discretion when deciding who should receive the benefits.

 

After the deceased died, his de facto spouse initially contacted the super fund and sought to have both of the deceased’s super accounts paid solely to her as the dependant spouse. Meanwhile she misrepresented to her co-executors (the three sons) that they and the estate were not eligible to receive any of the super. Subsequently the sons found out from the super fund that in fact they and/or the estate could be considered to receive a death benefit payment from the fund.

Once the three sons discovered the spouse’s misrepresentation of the situation, they lodged a claim to the fund trustee that it should exercise its discretion in favour of the estate. However, the trustee ended up exercising its discretion in favour of the dependant spouse as to 100% of the death benefits.

Ironically, if the three sons did not make a separate competing claim (which effectively operated as a consent to the spouse claiming in her own right), the spouse would have been held to be in breach of her duties as an executor and have to pay the money to the estate.

Examples of a Devistavit

An act of devastavit is not accidental. There are many examples of dishonest executors committing an act of devastavit, including:

  • taking estate money or assets
  • misusing estate property
  • the carrying on of a business without authority
  • not pursuing debtors to a point where the debt is irretrievable
  • playing favourites with creditors (paying some over others)

Signs of Dishonest Executors

Some of the signs of an executor acting dishonestly include:dishonest executors, executors of an estate, estate administration, probate, grant of probate

  • living in the deceased’s house as if it were their own
  • treating the deceased’s bank accounts as their own
  • loaning money from the estate
  • using threatening behaviour against beneficiaries or treating them unfairly
  • taking a salary from the estate to act as executor
  • delaying the administration and settlement of the estate

If you see any of these signs in an executor then it is reasonable to ask the court to remove them.  Although it can stop further loss from the estate, sometimes it will be found that there is not much left.   If you suspect that an executor has committed an act of devastavit, then please seek legal help.

Our estate lawyers are available for a free, 10-minute phone consultation.  Please contact us today!