Australia: Appointing an Officeholder as Executor – Avoiding Shifting Executorships

Summary - Care needs to be taken for gifts to charities and not-for-profit entities where an officeholder for the time is being appointed as executor.

Often Will makers when leaving a substantial gift to a charity or not-for-profit entity wish to appoint an office holder in the organization as executor of the Will.

Such an appointment was reviewed in the recent Supreme Court of South Australia case in the Estate of Chomiak [2012] SASC 27 (29 February 2012). The deceased, Anna Chomiak, died in 2010, aged 93. Her Will, which was prepared by a solicitor, nominated the "priest in charge for the time being of the Ukranian Catholic Church at Wayville" as her sole executor.

The Registrar of Probates in South Australia questioned whether the appointment in the Will created what is known as a "shifting executorship" because the phrase "for the time being" created uncertainty as to whether the deceased meant the priest in charge of the Church:

• at the time she made her Will;
• the date of the deceased's death; or
• a person who is in the office but only while that person holds the office.

The Registrar sought a direction from the Court as to the validity of the appointment.

A shifting executorship can be invalid, so it is not acceptable to appoint as an executor the holder "for the time being of a particular office" where it creates uncertainty, i.e. as to who is to act as executor.

The applicant for the grant of probate of the deceased's Will was Father Gorpynyak the priest in charge of the Church at the deceased's death and was not the priest in charge at the date of the execution of the Will who was Father Ckuj.

The Court was of the view that the principle of "shifting executorship" (based mainly in nineteenth century Australian law) was simply "just a manifestation of the approach taken to particular circumstances within the rubic of uncertain appointments, where in the circumstances the appointment is too uncertain and consequently void". The Court found that the deceased had been sufficiently clear and certain in her appointment and upheld the appointment of the executor in the Will to be valid. The Court based its decision on the fact that the deceased was a founding member of the Church, a benefactor and was heavily involved in Church activities. She was familiar with seeing a variety of priests during the period from the establishment of the Church to the date she signed her Will (she had known five priests during that period). Because she did not specifically name Father Ckuj, the priest in charge at the date of the Will as her executor, the Court decided that she intended to appoint the "priest in charge who holds office when duties of an executor are to be performed " i.e. on her death.

If the Court had applied the principle of shifting executorship to Anna Chomiak's Will, the appointment would have been void and the appropriate grant would have been one of Letters of Administration with the Will annexed, rather than a Grant of Probate. Even though the appointment would have been void, the other terms of the Will would have still been valid.

It is recommended that, to avoid any possible doubt as to the validity of the appointment of an officeholder as executor and the need for a Court application as in the Chomiak case, the Will maker refers to the officeholder, "at the date of my death" rather than "for the time being". This is not an issue in respect of bequests to officeholders for the time being.

As Anna Chomiak left the residue of her estate to the Church, the Court reviewed whether there were any suspicious circumstances surrounding the making of the Will. The Court noted that as the solicitor who had prepared the Will had read it to the deceased both in English and Ukranian there was a clear inference that the deceased was happy with the arrangements and the content of the Will. She was also religiously inclined and devoted to the Church and no representative of the Church had been involved in the making of the Will.

The further moral of the case for charities and not-for-profits is to avoid circumstances arising that may give rise to allegations of suspicious circumstances surrounding bequests to them in Wills. This is not an issue where a bequest is unprompted as in the Chomiak case but care needs to be taken where a bequest is a result of fundraising activities. Great care should be taken by charities and not-for-profits to ensure that there can be no suggestion of coercion or undue influence on the part of the charity or not-for-profits. The Will maker should meet with his/her solicitor alone.