Executor Not Paying Beneficiaries & Misconduct
Executor misconduct is serious. When an executor is withholding an inheritance, not communicating with beneficiaries, or taking too long, it’s easy for beneficiaries to get frustrated. Feelings of helplessness and lack of control can lead to anger and even ruin relationships. Fortunately, there are things you can do to get executors to act appropriately, although you must understand what the executor is legally required to do and what actually constitutes executor misconduct.
(Note: the term “personal representative” is the current legal term used to refer to an executor/executrix, administrator/administratix, and judicial trustee.)
First, recognize that the process may not be moving as quickly as you would like, but that doesn’t mean it isn’t moving along. The executor may not be acting as you would if you were the executor, but that still doesn’t mean that he or she is doing anything wrong.
If you truly believe there is some type of executor misconduct, there are ways of handling the situation. The beneficiaries can take the executor to the court, which might result in the court forcing the executor to give a full accounting of financial transactions. The court can also remove the executor or prevent the executor from receiving a fee. Also, remember that you have the right to go to the police if you believe that the executor is stealing or breaking the law in some other way.
Executor Withholding Inheritance
Is an executor withholding your inheritance? First, remember that there are instances when an executor can rightfully not disperse money. For instance, debts and taxes must be paid before the estate can be dispersed. If there isn’t anything left over, beneficiaries may not receive what they expected. Similarly, if an estate is insolvent, meaning the liabilities are more than the assets, the beneficiaries will not receive a distribution.
But there have been cases where the executor has delayed distributing the estate for other reasons. If it has been longer than a year and you are concerned about the situation, talk to your estate lawyer about your options.
Executor Not Communicating With Beneficiaries
Residuary beneficiaries have the right to know what is going on throughout the probate process. However, the executor isn’t required to consult with the beneficiaries or keep them updated every single step of the way. Being an executor can be challenging and sometimes beneficiaries confuse communication with the ability to provide input, something they do not have the right to do.
If several attempts have been made to communicate with the executor over a period of time and the executor has not complied, the beneficiaries can contact the executor’s estate lawyer to try to find out what’s going on.
If you are an executor, you can save yourself a lot of grief by simply keeping the beneficiaries informed. Most people don’t understand the probate process, so take the time to explain why things are the way they are as well as what is happening.
Executor Breach of Fiduciary Duty
Executors have a fiduciary duty to the deceased person they are acting for and the beneficiaries of the will. This means they must act in the best interests of these parties. They must keep proper records of all financial transactions and show those records to residual beneficiaries, should they wish to see them.
Executors cannot simply claim that they were not aware of their fiduciary duty. If the beneficiaries believe there has been an executor breach of fiduciary duty, the executor can be taken to court and even charged with theft.
Personal Representative Stealing from Estate
When family members are appointed as executors, also called personal representatives, stealing from the estate is very common. People can be greedy and having access to money makes it all too easy to use that money for their own pleasure.
Beneficiaries must act quickly if they believe a personal representative is stealing from estate. Once the money is gone, it’s gone. Yes, you can take the executor to court and possibly even have him or her charged with theft. But that will not get the money back.
As soon as theft is suspected, have your lawyer issue a demand letter asking for an account of the executor’s financial transactions with regard to the estate. If that doesn’t generate the desired result, you can try mediation before going in front of the court.
Can An Executor Be Removed?
Although it happens rarely, the court does have the power to remove an executor. Beneficiaries can petition the court to have the executor removed, but the process takes a long time and there is no guarantee of success.
If the court does choose to remove the executor, it will appoint a new one. Keep in mind that frustration over delays or simply disliking how the executor is handling things is not a good enough reason to remove an executor. The court will only remove the executor if there is sufficient cause. Your lawyer can help you determine whether you have sufficient cause to go before the court.
The Bottom Line
An executor, or personal representative, must follow the deceased person’s wishes as they are laid out in the will. Anything done that is not consistent with the will can result in the beneficiaries taking legal action.
If you are a personal representative, it’s best to communicate with the beneficiaries so they know what’s going on and what you’re doing to make sure the wishes of the deceased are carried out. If you have concerns about a personal representative, start by talking to your lawyer to determine your next steps.