Beyond The Will, Client Compass

What To Do if Estate Assets Need To Be Managed During Litigation: Examining the Austen Family

February 25, 2021


To best enjoy this post, please be sure to first read A Family History of the Austens

In our new family, the Austens, father Jack Austen, built up a successful residential real estate company, Oceanic Real Estate, LLC. Upon his tragic death in a plane crash in 2019, it is likely that at least Kate will challenge Jack’s Will. During this anticipated Will contest – before the allowance of Jack’s Will and the appointment of a Personal Representative – his estate assets are in limbo and need to be managed.

Thankfully, the Massachusetts legislature enacted statutes that enable the appointment of a temporary fiduciary to step in and manage estate assets during the pendency of a contested proceeding. This temporary fiduciary in an estate proceeding is called a Special Personal Representative, and “any suitable person” can be appointed to the position. This means that a family member, professional, or attorney is eligible for the appointment.

Sometimes multiple people request this temporary fiduciary appointment, and the Court needs to quickly decide who to appoint during the pendency of the contested litigation. The comment of Massachusetts Uniform Probate Code section 3-615 provides some guidance by stating that “[m]ost will contests are not successful. Hence, it seems reasonable to prefer the named executor as special personal representative where he is otherwise qualified.” Nevertheless, the Court has the discretion to appoint any suitable person for this position. Often, when the Court faces two parties blaming the other for wrongdoings, the Court will appoint a neutral person, such as a skilled attorney. If the estate owns a particular asset requiring specialized skills, such as this real estate company, the Court will consider the specific qualifications and skillset of the proposed special personal representatives to ensure that the appointed person benefits the estate and its unique needs.

Once in place, the special personal representative has most, but not all, powers of a personal representative. There is a statute detailing which powers the special personal representative possesses. Importantly here, the special personal representative has the power to receive assets, perform contracts, make repairs, pay taxes, employ persons, and continue any unincorporated business or venture that the decedent was engaged in at the time of his death. If the special personal representative needs additional powers, such as to sell property, they can seek Court approval. The Court does not want the estate to be harmed.

Lastly, the special personal representative’s appointment is statutorily limited to 90 days unless an extraordinary circumstance exists warranting a longer appointment. After 90 days, the Court reviews whether the appointment needs to remain in place. In a situation involving Oceanic Real Estate, LLC, the appointment would need to be extended to continue to oversee rental properties and collect rental income.

The special personal representative is accountable to the Court. They must file an inventory of the estate assets as well as accountings of their administration. Family members are often comforted knowing that there is accountability to the Court, especially where a neutral person is appointed.

The takeaway is that a procedure exists to maintain a family’s business (or other assets) during the uncertain period of a Will contest. If you find yourself involved in a Will contest and there are assets in need of protection, we encourage you to consult with a skilled estate litigation attorney to help you with the filings to protect the Estate.

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