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Executor-Beneficiary Conflict of Interest

Executor-beneficiary conflict of interest is one of the main reasons executors find themselves being taken to court. Whether there is a real conflict of interest or the beneficiaries of the will only believe one exists doesn’t matter; the executor will still face challenges he or she could do without.

(Note: the term “personal representative” is the current legal term used to refer to an executor/executrix, administrator/administratix, and judicial trustee.)

Executors have a duty to act in the beneficiaries’ best interest. Aside from receiving compensation in the form of an executor fee, they are not entitled to benefit from the will. (They can, of course, benefit as beneficiaries, but not as executors.)

Some examples of executor conflict of interest are:

  • An executor is a creditor of the estate. In such a case, the beneficiaries would have good cause to wonder whether the executor could act fairly and impartially.
  • An executor buying assets from the estate. The executor is supposed to act in the best interests of the estate, which would mean getting the highest possible price for the asset. But as a buyer, the executor would be looking for the lowest possible price.
  • An executor hiring his or her own company to do something for the estate. As a business owner, the executor would want to get the highest price whereas he or she should be trying to get the lowest price on behalf of the estate.
  • An executor doing anything that is in his or her own best interests instead of looking out for the estate and its beneficiaries.

What Happens When There is Conflict of Interest

In the case of an executor and beneficiary conflict of interest, the court may remove the executor. Remember, however, that there must be significant conflict between the executor’s duties and his or her personal interest. It must be so significant that an impartial party would believe that the executor is unlikely to act against his or her interest.

More often, issues between beneficiaries and executors are worked out without taking on the expense of going to court. The first step is to get the court to compel the executor to pass accounts. If you have been appointed an executor and are worried about a possible conflict of interest, talk to your estate lawyer immediately. If you are concerned about the executor of a will that you stand to benefit from, you will need to consult your own estate lawyer.

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