Being named as an executor of an estate carries with it several responsibilities. Over 44% of executors experienced family conflict or were aware of one during their time as an executor. It’s a serious issue if you suspect that an executor of your family’s estate is breaching their fiduciary duties.
What Roles Does an Executor Have?
An executor is appointed by the deceased person to manage their estate after they pass away. One significant role of an executor is to ensure that the deceased person’s wishes are carried out according to their will.
The executor collects and manages the deceased person’s assets, including their personal property, real estate, and investments. They also pay any debts and taxes owed by the estate and distribute the assets of the estate to the beneficiaries according to the terms of the will.
An executor must also ensure that any legal requirements are met, such as obtaining probate or letters of administration. They must keep accurate records of all estate transactions and provide regular updates to the beneficiaries. Finally, their role is to act in the best interests of the estate and the beneficiaries, making sure to avoid any conflicts of interest.
How Can Executors Breach Their Fiduciary Duties?
One of the most common ways that executors can breach their fiduciary duty is by engaging in self-dealing. This happens when executors use their position to benefit themselves or specific family members rather than acting in the best interests of the estate and beneficiaries.
Executors are responsible for managing the assets of the estate, including real estate, investments, and personal property. Mismanaging these assets, such as failing to properly invest or protect them, can result in a breach of fiduciary duty.
Executors are also required to keep accurate records of all estate transactions and provide regular updates to the beneficiaries. If they fail to do so, it may result in a breach of fiduciary duty. In addition, executors are responsible for paying any debts and taxes owed by the estate. Not doing so can result in legal action against the estate as well as a breach of fiduciary duty.
Executors must distribute the assets of the estate in accordance with the deceased person’s wishes and the law. If they don’t distribute assets in a timely and appropriate manner, this can be a breach of fiduciary duty. Finally, executors must avoid any conflicts of interest that may arise. This includes avoiding any situations where they may benefit personally.
What Happens When Executors Breach Their Fiduciary Duties?
It’s important to note that when executors breach their fiduciary duties, there may be serious repercussions, and they may face legal consequences.
In some cases, the court may remove them from their position. This can happen if the executor is found to have acted dishonestly, negligently, or in bad faith. The court can then appoint a new executor to replace them.
An executor who breaches their fiduciary duties may be held personally liable for any losses or damages suffered by the estate or the beneficiaries. This can happen if the executor mismanages the estate’s assets, fails to pay debts and taxes, or fails to distribute the estate’s assets properly.
Beneficiaries who have suffered harm as a result of an executor’s breach of fiduciary duty may be able to bring a lawsuit against the executor for damages. This may include the loss of value of the estate’s assets or the cost of legal fees.
In extreme cases, executors who breach their fiduciary duties may face criminal charges. This can happen if the executor has engaged in fraud, embezzlement, or other criminal activities.
Also, if an executor is found to have breached their fiduciary duties, the court may reject their claim for compensation. This means that the executor will not be paid for their services. The executor may also be required to pay back any compensation that they have already received.
What Should You Do If You Suspect a Breach of Fiduciary Duties?
If you suspect that an executor is breaching their fiduciary responsibilities, it’s important to keep records of any transactions or communications that you believe are improper and collect any other relevant documents.
If you feel comfortable doing so, speak with the executor and express your concerns. They may not be aware that they are breaching their fiduciary duties, and they may be willing to take corrective action.
Finally, you can consult an estate litigation lawyer. If speaking with the executor does not resolve the issue, you may need to retain an attorney who can assess the situation.
If you have any questions and would like to schedule a consultation, please call us at 201-996-1200.