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What an Executor Can and Cannot Do
Our Orange County trust litigation lawyers focus on helping trustees, beneficiary, and heirs in the event there is a trust contest. Our Orange County Law firm focuses primarily on trust and estates disputes based upon undue duress, embezzlement, breach of fiduciary duty, and other estate litigation matters.
What an Executor Can and Cannot Do
What An Executor Cannot Do
What an Executor (or Executrix) cannot do? As an Executor, what you cannot do is go against the terms of the Will, Breach Fiduciary duty, fail to act, self-deal, embezzle, intentionally or unintentionally through neglect harm the estate, and cannot do threats to beneficiaries and heirs.
The most important thing that an executor cannot do is the following: Not stay transparent with the beneficiaries and heirs. It is also imperative of proper bookkeeping, staying on top of things that may call for buying or selling of an asset.
Can the Executor of a will take everything
What an Executor Cannot Do
There are many discussions about whether an Executor of an estate has the power to sell specific properties, sell to themselves, etc., so in short, the Executor of a will cannot self-deal and sell the estate assets below market value. If an Executor does not perform due diligence, it may be construed as self-dealing and against the fiduciary duty of an Executor role. If its found self-dealing has taken place, the beneficiaries can evict the Executor and open the opportunity to go after the Executor civilly.
With that said, let’s go over the roles within probate to make sense of what an executor can and cannot due as an executor.
What is an Executor?
An executor (or executrix) is a man or woman or even an institution appointed by a Testator to carry out the terms of the Will and Last Testament. The Executor is responsible for all the assets in the Will.
Can the Executor of a Will Take Everything?
First thing, the Executor has legal duties regarding the estate. An Executor who is found stealing can be found in contempt of the probate court. Contempt of court carries not only fines but also a jail sentence. Therefore, can an executor of a Will take everything? Yes, if they want to be underhanded, so that is why there are measures the beneficiaries can take to circumvent this possibility.
What Can Beneficiaries Do to Protect Their Rights?
An Executor is legally liable to the estate beneficiaries to keep proper bookkeeping so that if the courts demand an accounting, the Executor can show an inventory list. The inventory list will explain everything that has been done so far, including supporting evidence, receipts, and cashed checks.
When you find out you will be receiving an inheritance, you have the right to know its status.
Expect the following from the Executor
- The Executor begins by communicating their position to the beneficiaries, financial institutions, and any known creditors.
- They assist in any funeral arrangements, etc.
- They open trust bank accounts to manage all the Testator’s finances.
- Get multiple copies of the death certificate to present to all the creditors and banking institutions.
- Set up an initial meeting with beneficiaries.
Now, at this time, communication is crucial. The Executor will not have to explain every step they are completing on a day-to-day basis but should update periodically. Best to establish the communication method upfront first, so that no one is caught off guard during this lengthy process.
The trust documents can have an option to adjust the assets from one beneficiary to another slightly. The Trustor/Grantor, in making the trust, explicitly states they can do so. If a beneficiary contests the trust, a caveat is by challenging the trust, and you lose in the courts, a no-contest clause could block you from receiving any trust distribution. Have an expert trust litigator guide you. Review a minimum of two attorneys to help you through the trust administration process.
Learn more about Executor vs. Beneficiary Rights
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Take away: Even if an executor, in good faith, attempts to sell a property within the estate, and it does not go as planned, a beneficiary can’t merely say they were acting in a non-fiduciary capacity. Court’s will refuse to remove an executor when good-faith is taken on behalf of the estate.
While the Executor work on behalf of the beneficiaries, there are reasons why some judges will remove the Executor.
- Infighting between Executor and Co-Executors
- Failure to comply with the terms of the Will
- Non-Cooperation with creditors and Beneficiaries.
- No follow-through, i.e., neglecting or mishandling estate assets.
- Abuse of Discretion
- Breach of Fiduciary Duty
- Failure to Act
- Undue Influence
- Conflict of Interest
And there are more reasons. The bottom line is that if an Executor is confronted with a judgment call, they should seek legal counsel. When seeking legal counsel, it establishes a precedent that its solely not the opinion of the Executor, but via legal counsel that the decision was made.
What Does an Executor of a Will do?
Well, first and foremost, the Executor, as long as they are living up to their Fiduciary duty, keeping proper bookkeeping and showing faithfulness to the rights of the beneficiaries will be hard-pressed to prove a breach of fiduciary duty. The Executor can override a Beneficiary in most instances as well as be a beneficiary. You see, the appointment as the Executor by the Testator, i.e., creator of the Will, is an honor. The Executor has much latitude to manage the estate to do the following:
- Determine all assets and protect them from being sold out of probate.
- Pay off all creditors and taxes
- Distribute funds to Heirs and Beneficiaries.
Now, you may be jaded if the Executor, after receiving all the information from beneficiaries, etc., still commences with a judgment call. An Executor can override a Beneficiary should they see it necessary to abide by the wishes of the Testator and the legal aspects of the state.
What an Executor Cannot Do (Executor vs. Beneficiary Rights)
- Not locate the Will
- To be careless and allow the assets in the Will to disappear.
- Not manage the creditors and not pay taxes.
- Sell assets way below fair market value and can be shown self-dealing.
- Mismanage Real Estate: Selling a property without completing their due diligence, e.g., getting an appraisal and possibly multiple offers.
- Co-mingling: Mixing the Executor monies with the estate.
What cannot an Executor do? Go against the wishes of the Testator, not seek counsel, and not communicate with Beneficiaries, i.e., allowing for Beneficiary rights to Trust Information.