Executor and Trustee Disputes
Applications to remove or replace executors and trustees, force an accounting, recover for breach of duty, or defend an office-holder under attack, run for beneficiaries and office-holders of substantial estates and family trusts.
What are executor and trustee disputes?
Executors and trustees hold legal title to property (an estate, or a trust fund) that they must administer for the benefit of others. The law imposes strict duties on them: to act personally, to act in the beneficiaries' best interests, to avoid conflicts, not to profit from their position, to invest prudently, to account for what they hold, and to act impartially between beneficiaries.
Executor and trustee disputes arise when an office-holder fails to meet those duties, when beneficiaries lose confidence in the office-holder, or when the office-holder has become incapable or unwilling to continue.
The word "executor" describes the office-holder of a deceased estate under a will. "Administrator" describes the equivalent office-holder where there is no will, or where the executor named in the will has declined to act. "Trustee" describes the office-holder of a trust, which may be an ongoing family trust, a testamentary trust set up by a will, a unit trust, or any other trust structure. The legal principles across all three offices are substantially the same, and this page covers the disputes that arise across all of them.
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Types of disputes Aptum runs
Applications to remove an executor
Where an executor has become unfit to continue in the office (misconduct, incapacity, conflict of interest, prolonged inaction, hostility to beneficiaries), the court can remove and replace them. Governed by the Administration and Probate Act in each state and by the court's inherent jurisdiction.
Applications to remove a trustee
Where a trustee of an ongoing trust has become unfit, the court can remove and replace them under the state Trustee Act and under the court's inherent equitable jurisdiction. The leading authority (Letterstedt v Broers) frames the test as the welfare of the beneficiaries and the due administration of the trust, not simply whether the trustee did something wrong.
Passing of accounts
Executors and trustees have a duty to account for what they hold and what they have done with it. Where accounts are not provided voluntarily, a beneficiary can compel formal accounts. Once accounts are provided, they can be objected to and put through a formal passing process before the court.
Claims for breach of trust and breach of fiduciary duty
Where an office-holder has failed to meet their duties (self-dealing, taking a secret profit, imprudent investment, unauthorised distribution, mixing trust property with personal property), the court can order equitable compensation, account of profits, tracing of misappropriated assets, and (in appropriate cases) constructive trust remedies.
Applications to compel distribution
Where an executor has completed administration but is not distributing the estate to beneficiaries, or where a trustee is not making distributions the trust requires, an application can be brought to compel distribution.
Applications for judicial advice
Trustees who face genuine uncertainty about the proper exercise of their powers can seek the court's advice under the state Trustee Act. This protects the trustee against later challenge from beneficiaries who disagree with the decision.
Disputes over trustee discretion
Where a trustee has exercised (or refused to exercise) a discretion in a way that beneficiaries say is improper, the court can review the exercise on limited grounds (bad faith, failure to consider relevant matters, taking into account irrelevant matters, capricious or perverse exercise). The court will not simply substitute its own view for the trustee's.
Recovery of misappropriated trust or estate property
Where an executor, trustee, or third party has taken property that belongs to the estate or trust, Aptum runs recovery actions under contract, equity, and (where applicable) the Corporations Act.
Defence of executors and trustees
Aptum acts for executors and trustees under attack by beneficiaries. The defence-side work often turns on demonstrating adherence to duties, the reasonableness of decisions taken, and (where the office-holder has acted in good faith under legal advice) the availability of protection under the court's discretion.
Trustee company disputes
Where the trustee is a corporate trustee (common in family discretionary trusts and unit trusts), the disputes often involve director conduct as well as trustee conduct, and cross-refer to our Corporations Law and Directors Duty Disputes service.
How Aptum runs an executor or trustee dispute
Value conversation
A no-cost first meeting where you set out the office-holder's conduct, the trust or estate structure, and the beneficiaries affected. We tell you which pathway fits (removal, accounting, breach claim, judicial advice, defence) and what the realistic outcome looks like.
Pathways assessment
If the matter is realistic and you want to move forward, we scope it, identify the trust documents and accounting records needed, work out the likely defendants and the causes of action, and give you a costed engagement plan.
Execution
We run the matter. Formal notice to the office-holder, negotiation, court application if needed, discovery of the trust records, expert accounting evidence where appropriate, mediation, and hearing where the matter does not settle.
Removing an executor in detail
An executor derives authority from the grant of probate. Once the grant is made, the executor has legal title to the estate and stands as a fiduciary to the beneficiaries. Removal is governed by two overlapping sources of power:
- The state Administration and Probate Act (which typically empowers the court to remove and replace an executor where the court considers it fit and proper to do so)
- The court's inherent jurisdiction to protect beneficiaries and ensure due administration of the estate
Grounds that typically support removal.
- Prolonged failure to administer the estate without proper reason
- Failure to account or to provide information to beneficiaries
- Conflict of interest between the executor's personal position and the estate
- Misconduct, including self-dealing and unauthorised distributions
- Hostility to beneficiaries that impedes proper administration
- Incapacity (mental or physical) making continued office impractical
- Convictions for dishonesty offences relevant to the trust of the office
What removal actually achieves. Removal is a forward-looking remedy. The court removes the executor and appoints a replacement (often an independent trustee company, or a solicitor). It does not, on its own, compensate the estate for past losses. For that, a separate breach claim must be brought.
Removing a trustee in detail
Trustee removal is governed by the state Trustee Act, the terms of the trust deed itself (which may confer powers to appoint or remove trustees), and the court's inherent equitable jurisdiction under Letterstedt v Broers.
The Letterstedt test. The court's overriding consideration is the welfare of the beneficiaries and the due administration of the trust. It is not necessary for the applicant to prove misconduct or breach of trust. Where the trustee's continued office is inconsistent with the welfare of the beneficiaries or the trust's administration, the court can remove them.
Grounds that typically support removal.
- Breach of trust or fiduciary duty
- Persistent failure to account or to provide information to beneficiaries
- Deadlock between multiple trustees preventing decisions
- Hostility between trustee and beneficiaries at a level that impedes administration
- Conflict of interest
- Incapacity
- The trustee's departure from the terms of the trust in a material way
Corporate trustees. Where the trustee is a corporate entity, removal of the corporate trustee is one option, but often the practical remedy is to change the directors of the corporate trustee (via the trust deed's appointment powers or via Corporations Act pathways). This is a common battleground in family discretionary trusts.
Forcing an accounting
The duty to account is fundamental to the office. Every executor and every trustee must be able to say what they hold, what they have received, what they have spent, and why. Where accounts are not provided, or the accounts provided are inadequate, a beneficiary can:
- Make an informal request for the accounts and the supporting records
- If refused, apply to the court for orders that the office-holder provide accounts within a fixed time
- Object to the accounts once provided and have them formally passed by the court
Passing of accounts is a formal court process in which the accounts are examined, objections are heard, and orders are made about the correctness of the accounts and any adjustments or surcharges required. Where an office-holder has failed to account for property received, the account can include a surcharge (an amount added to what the office-holder must pay to the trust or estate) or a falsification (an amount removed from what the office-holder claims to have properly spent).
The Aptum blog post What Is a Trustee's Duty to Account, and What Happens When They Don't? covers the substantive law in detail.
Breach of trust and breach of fiduciary duty
Where an executor or trustee has breached their duties, the beneficiaries have a suite of equitable remedies available. The choice of remedy is a strategic question that depends on what the office-holder did, what remains in their hands, and what the trust has lost.
Equitable compensation. The office-holder pays compensation to restore the trust to the position it would have been in had the breach not occurred. This is the default remedy for breach of trust.
Account of profits. Where the office-holder has profited from a breach (typically self-dealing or taking a secret profit), they must disgorge the profit to the trust, whether or not the trust suffered a loss.
Constructive trust. Where the office-holder has acquired property in breach of duty (typically by misuse of trust information or opportunities), the court can declare the property held on constructive trust for the beneficiaries.
Tracing. Where the office-holder has misappropriated trust property and used it to acquire other assets, the beneficiaries can trace their beneficial interest into the substitute assets, subject to the rules of equitable tracing.
Personal liability of third parties. Third parties who knowingly assist a breach of trust, or who knowingly receive trust property in breach of trust, can be personally liable to the beneficiaries. This is important where the office-holder is insolvent and the practical route to recovery is against a third party who benefited from the breach.
The Aptum blog post Can You Sue a Trustee for Breach of Fiduciary Duty? A Practical Guide covers the practical framework.
How the matter actually moves
Records and evidence
Trust deed or will, prior accounts, bank statements for the trust or estate, correspondence between the office-holder and beneficiaries, professional advice the office-holder received (or did not receive). This is often the difficult stage because the office-holder holds the records.
Formal request
Written request to the office-holder for the accounts and the supporting records, with a clear timeframe. Many matters produce a substantive response and open a negotiation window at this stage.
Court application
Where the office-holder does not respond adequately, court application is filed. In Victoria this is usually in the Trusts, Equity and Probate List of the Supreme Court. The application may seek removal, an order to account, an injunction to prevent further dealings, or all three.
Discovery and evidence
The office-holder's records are produced through discovery or specific court orders. Expert accounting evidence is often required to reconstruct what happened, particularly where the accounting has been poor or where funds have been mixed.
Mediation and hearing
Most matters resolve at mediation once the records are on the table and the substantive position is clear. Where the matter does not resolve, the court hears the evidence and makes orders.
An accomplished farmer has his property protected in a family trusts dispute
Trustee and executor disputes often intersect with disputes over the underlying assets in the trust or estate. The pattern below is one Aptum sees regularly.
Our client was a farmer who had spent approximately 60 years prior to the dispute establishing and developing numerous farms held in a family trust. When members of the next generation separated, disputes over the trust structure, the corporate trustee, and the underlying property brought Aptum in to intervene and protect the client's interests.
What's changing in Australian executor and trustee law
Corporate trustee director conduct is under sharper scrutiny
Where the trustee is a family company, decisions taken by the directors of that company are increasingly analysed as both trustee decisions (subject to equity) and director decisions (subject to the Corporations Act). This gives beneficiaries additional pathways and additional defendants.
Judicial willingness to remove trustees on Letterstedt grounds is real
Recent Australian decisions have reaffirmed that the court does not require proof of misconduct to remove a trustee. Where the relationship between trustee and beneficiaries has broken down at a level that impedes administration, removal is available.
Accounting standards for family trusts are rising
Historically, family trust accounting was informal, and beneficiaries often accepted whatever the trustee provided. Recent litigation has established clearer expectations about the level of accounting required, and trustees who cannot properly account are at growing risk.
ATO and third party interaction with trustees is a growing dimension
Where the ATO pursues a trustee for tax debts of the trust, or where a third party seeks to enforce a debt against trust assets, beneficiaries increasingly find their interests exposed by trustee conduct they did not know about. See Can the ATO Pursue a Deceased Estate for Unpaid Tax Debts?
Frequently asked questions
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Can an executor be removed?
Yes. The state Supreme Court can remove an executor on grounds of misconduct, incapacity, conflict of interest, prolonged failure to administer, hostility to beneficiaries that impedes administration, and other cause. Application is made under the state Administration and Probate Act and under the court's inherent jurisdiction.
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On what grounds can a trustee be removed?
The leading authority Letterstedt v Broers frames the test as the welfare of the beneficiaries and the due administration of the trust. It is not necessary to prove misconduct or breach; where the trustee's continued office is inconsistent with the trust's proper administration (deadlock, hostility, incapacity, breach of duty), removal is available.
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What is the duty to account?
Every executor and trustee has a duty to keep records of what they hold and what they have done with it, and to produce those records to the beneficiaries when properly requested. Where accounts are not provided voluntarily, a beneficiary can compel formal accounts and put them through a court passing process.
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Can I force an executor to distribute the estate?
Yes, where administration is complete and the executor is not distributing. An application to compel distribution can be brought. Where the delay is defensible (waiting for a family provision claim window to close, or resolving a tax matter), the executor's position is protected; where the delay is unjustified, the court will order distribution.
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What remedies are available for breach of trust?
Equitable compensation to restore the trust to the position it would have been in, account of profits where the trustee has made a personal profit from the breach, constructive trust over property acquired in breach, and tracing of misappropriated assets into substitute holdings. Third parties who knowingly assisted or received trust property may also be personally liable.
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Can a beneficiary sue a trustee personally?
Yes. Where the trustee has breached their duties, the beneficiary can bring an action against the trustee personally for equitable compensation and other remedies. Where the trustee is impecunious, alternative claims against third parties who benefited from the breach may be available.
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What is Barnes v Addy liability?
Third-party liability for knowing assistance in a breach of trust, or knowing receipt of trust property in breach of trust. Named after the 1874 case that established the framework. Important where the trustee is insolvent and recovery has to come from a third party who benefited from the misconduct.
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How long do I have to bring a breach of trust claim?
State limitation periods apply (typically 6 years for equitable claims, subject to postponement for concealment). Time can run from the date of the breach, from when it was reasonably discoverable, or (in fraud cases) from the date of discovery. Prompt action once misconduct is discovered is important.
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Can Aptum defend an executor or trustee under attack?
Yes. Aptum acts on both sides. Defence-side work often turns on demonstrating adherence to duties, reasonableness of decisions, and (where the office-holder acted on legal advice) the availability of protection under the court's discretion.
Thinking on executor and trustee disputes
Aptum publishes regularly on the questions that decide executor and trustee disputes matters.
The Aptum executor and trustee disputes team
Michael Buscema
Michael Buscema spent 11 years with the ATO and Commonwealth Treasury, including as acting Assistant Commissioner, before joining Aptum as a practice lead. He acts for private wealthy groups and families in complex, high-value disputes, and has negotiated settlement and security arrangements totalling over $1 billion.
Estate disputes over substantial asset pools are rarely just about the will — trust structures, superannuation and tax consequences run through them, and Michael brings senior experience on exactly those fronts.
Nigel Evans
Nigel Evans, Aptum's Managing Director and Co-Founder, leads Aptum's estates practice. Before founding Aptum, Nigel spent 11 years at the commercial Victorian Bar, where much of his practice touched on trust structures, fiduciary breach and equitable remedies. He is listed in Best Lawyers in Australia for Commercial Litigation (2026) and recognised by Doyle's Guide as a Leading Commercial Litigation and Dispute Resolution Lawyer.
Offices
Aptum services estates clients across Australia from three offices.
Get clarity on your executor or trustee matter
Executor and trustee misconduct compounds while it goes unaddressed. Assets get mixed, records get lost, and the practical route to recovery narrows over time. If you have serious concerns about the conduct of an executor or trustee, or you are an office-holder under attack, book the value conversation this week.
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