Communication between an Executor and the Beneficiaries is a crucial aspect of the probate process.
Communication breakdown between Executor and Beneficiaries?
Is there is an issue with the Executor not communicating with Beneficiaries, you may have a legal ground to contest the will based on the fiduciary duties of the Executor. Executors have a legal obligation to the testator to complete the wishes within the will, which generally states their fiduciary duty to the beneficiaries. If communication breaks down, you, as a beneficiary, may have the legal right to know what’s going on.
What are my responsibilities as a Beneficiary?
As a beneficiary, first and foremost, you have to show “reasonable” actions based on how you interface with the Executor of a will. Understanding the probate process will help.
With that said, you want to make sure that incompetence or misconduct is not influencing the wishes of the testator. Every state has its reasons on what constitutes the removal process of an executor, but the probate court will remove executors who don’t complete the following:
- Over their heads and can carry out the Executor’s duties: Many times, one of the Beneficiaries is the Executor of the Will. The Executor’s ability to manage proper bookkeeping, for example, is one of the highest actions of importance. Sometimes, the Executor didn’t realize they have to deal with tax-related issues, creditors, and beneficiary needs and wants. If the Executor fails to communicate on a transparent basis, it can give rise to beneficiaries to petition to the courts for removal. It’s a balancing act.
- Not complying with a court order: Once given a ruling, if the Executor does not meet the verdict, it will be considered suspicious and may result in removal as the Executor.
- Uses the estate funds for personal gain: The fiduciary duty first and foremost is to the testator wishes, which include taking care of their heirs and beneficiaries. If the co-mingling of funds is taking place, this can rise to a civil matter.
Now, once again, you will want to gather your information and consult counsel to ensure you are on the right side of the law.
What is the Responsibility of the Executor?
So as a beneficiary, understanding the probate and trust administration process is key to getting along with the Executor.
It summed up in a simple process as the following:
- Protect the estate of the testator/grantor: Determine all properties, debts, etc.
- Probate the will: liquidate, i.e., sell assets and obtain tax clearance
- Pay heirs and beneficiaries: Once paying creditors, then and only then can distribution to beneficiaries and heirs take place. Any sooner can create civil matters for the Executor!
The point of contention arises when there are real estate properties to be sold. Beneficiaries believe they have positional power to influence the Executor on exactly how and when to sell properties.
Now, if there is a will or, in some cases, where there is no will, the latitude to the executor/administrator can vary greatly. When the legal instrument, i.e., the Will does not explicitly state the handling of real estate properties, the Executor must faithfully act and has great latitude.
In an example of selling a property, when the fair market value is determined, the Executor can sell the property without consenting to the beneficiaries. Note: If the Executor is showing good faith, i.e., getting proper appraisals, etc. then courts will shun from removing the Executor simply because a beneficiary did not agree to the sale.
A lack of communication from an executor on an estate matter may not be deemed breaching the contract merely because they are not reporting pitch by pitch what is occurring. The courts will interpret what constitutes “a timely manner.”
Therefore, beneficiaries must recognize signs of conflict of interest and not merely react without legal grounds.
Is there a time limit for a Beneficiary to Act if Breach of Fiduciary Duty is Occurring?
When it comes to probate, it can take ten months upward to pay the heirs and beneficiaries finally. Many times it can go up to 2+ years depending on several factors.
So before any payout takes place, the Executor, to maintain their fiduciary duty must complete the following:
- The Executor must notify each beneficiary and heir they are included in the will early in the process. Allows for contesting the will, which is a legal right.
- To be transparent about the value of the inheritance. Remember, all depending on paying creditors and taxes first will determine the actual inheritance, and this again can take months to years.
So, once again, if you feel the updates received from the Executor are not corresponding to what’s expected from an executor, contact an estate planning attorney right away.
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