After you die, an executor selected by you in your will or assigned by the probate court will be tasked with administering your estate.
Executors will perform certain duties, such as collecting estate assets, managing these assets for the benefit of estate heirs and ultimately distributing these assets to estate heirs.
If an executor fails to fulfill these duties, they could be held personally liable.
Executors as fiduciaries
An executor is considered a fiduciary. This means that they act on behalf of and for the benefit of someone else. In the case of an executor, they are acting for the benefit of the estate heirs.
Fiduciaries have a duty of care. In the case of an executor, this involves appraising estate assets appropriately and managing estate assets responsibly. It is especially important that executors do not mismanage estate assets or engage in self-dealing.
An executor’s personal liability
Executors must not mismanage estate assets. Mismanagement includes:
- Failing to pay taxes
- Making poor investment choices
- Favoring one heir over others
- Allowing insurance to lapse
Ultimately, mismanagement of estate assets is any act that leads to a loss in value of the estate.
Executors also cannot engage in self-dealing. Executors engage in self-dealing if they purchase estate assets for themselves or otherwise improperly retain estate assets for their own use to the detriment of the estate.
An executor who mismanages estate assets or engages in self-dealing can be sued by estate heirs. This is because that executor has failed to meet their obligations as a fiduciary and has caused harm to the estate and thus to the heirs of the estate.
Probate litigation can be complicated. Emotions can run high, and most people are not familiar with filing lawsuits against executors.
If you are concerned about an executor’s actions and suspect the executor might be mismanaging estate assets or is self-dealing, you can discuss your concerns with an attorney to determine what steps you should take to protect the estate and your interests as an heir.