What is Devastavit? And What Does it Mean For You?
Upon the death of a will-maker (‘testator’), Executors are granted enormous power over the administration of their Estate. This power includes the ability to sell property, transfer ownership, pay debts and distribute the Estate according to the terms of the Will. In some circumstances, however, Executors fail to properly manage the Estate and cause it to suffer losses. Given the unique position of power than an Executor occupies in relation to the Estate, he or she is under a very strict obligation to ensure that the Estate is not only properly managed, but is protected and preserved as well as possible.
Where an Executor makes a serious mistake in the administration of the Estate (whether intentionally or through negligence), and a loss is suffered by it, he or she may become personally liable for that loss. In other words, if the Estate loses money through misappropriation or mismanagement of Estate funds or property by the Executor, he or she will have to pay the money lost back to the Estate. The damage done to the Estate is called ‘devastavit’.
What Types of Conduct May Amount to Devastavit?
Some examples of devastavit include:
- Spending the Estate’s funds for the Executor’s own pleasure or gain;
- Transferring ownership of the deceased’s properties to the Executor or to other people for personal gain;
- Negligently administering the Estate through poor or ill-advised decision making;.
- A failure to pay the deceased’s debts;
- Selling assets of the Estate below their value.
Where an action in devastavit is brought against an Executor who has withheld a part of the Estate for his or her own benefit (e.g., if he/she has transferred an asset of the Estate to his/her name), but the Executor has not sold it on, they may be made to ‘account’ for that asset. In such circumstances, the Executor will have to explain his/her decision to transfer the asset to their name and if his/her explanation is not convincing enough to a Court, he/she will be forced to return that asset to the Estate.
Alternatively, where an asset cannot be accounted for, an Executor may have to ‘make good’ the loss by paying the asset’s equivalent value back into the Estate out of his/her own pocket.
Where, however, there is evidence that a beneficiary has requested that an Executor or trustee do something that ultimately harms the Estate as a whole, an Executor or Trustee may avoid any claims for damages. An example of this occurring is where a beneficiary of an Estate asks that an Executor release money to him or her even though it exceeds the amount they would have received under the Will. In these circumstances, the beneficiary may not bring a claim in Devastavit against that Executor. Similarly, if other beneficiaries seek to recover any money taken out of the Estate through the Executor’s actions, a court may take any damages out of that beneficiary’s interest in the Estate.
Can the Courts ‘Forgive’ an Executor?
Under section 3 of the Trustee Act 1958 (Vic), Courts have the power to ‘forgive’ an Executor where it feels that the Executor acted honestly and reasonably and ought to be excused. This particular form of relief, however, is only available to professional trustees – i.e., appointed companies that perform the duties of an Executor and Trustee.
For non-professional Executors, Courts have wide-ranging discretion in granting forgiveness. Given that the job is sometimes performed by laypersons with little to no knowledge of their duties as Executors, Courts will often forgive an Executor where it can be demonstrated that he or she simply acted honestly. It follows that if you are attempting to bring an action in Devastavit (or any of the other similar claims for breaches), you must be able to demonstrate that the Executor acted in a way that can reasonably be thought to be negligent or malicious.
Some Final Thoughts on Devastavit
More often than not, when a person brings an action in Devastavit it is done in conjunction with a number of other ‘administrative actions’ – in other words, actions brought by a person for the purpose of rectifying or punishing mistakes made by an Executor in the administration of the Estate.
The true strength of Devastavit lies in its considerably long limitation period. Most civil actions have time limits on them – generally starting from when the harm occurred – and vary enormously in length. A Part IV, or Family Provision claim, for example, can normally only be lodged within the first six months of the Grant of Probate (although this time limit may in certain circumstances be extended). Devastavit on the other hand may be brought up to six years from the date on which the harm occurs – giving plaintiffs an enormous amount of time to act upon an Executor’s mistakes or maladministration of an Estate.
If you have concerns about someone’s Will and wanting to contest it, it’s very important that you seek legal advice as soon as possible after their death. So, to discuss your concerns regarding Estate disputes, please don’t hesitate to contact our Estate lawyers at Hentys Lawyers today.