After someone passes away, an executor or personal representative will
be appointed to administer their estate during probate proceedings. The
executor/personal representative will gather the decedent’s assets,
settle the decedent’s taxes and debts, and distribute any remaining
assets to the beneficiaries of the estate.
The executor who conducts these activities does so in a “fiduciary
capacity,” which means they have a fiduciary duty to act in the
best interests of the estate and the heirs who stand to inherit from the estate.
By definition, a fiduciary is an individual, a bank, or a trust company
that acts on behalf of another, and for their benefit. Executors, personal
representatives and trustees are all fiduciaries.
Role of the Executor or Personal Representative
There is a lot of responsibility on the executor or personal representative’s
shoulders. He or she must carefully read the will or trust so they know
who the beneficiaries are, what they are to receive, and when they are
to receive it.
Managing an estate through probate is a complicated process. Because of
this, most fiduciaries decide to retain a probate attorney who can ensure
that they perform their duties in accordance with the law. Executors must
be mindful of the fact that if they accept their appointment and agree
to serve as a personal representative of the estate, they will be held
to the highest standards of fiduciary duty.
If an executor or personal representative fails to understand and properly
implement the terms of the trust or will, they can be held personally
responsible for any harm caused to the estate or the beneficiaries. There
are dozens of ways that an executor can breach their fiduciary duty, including
but not limited to:
- Engaging in self-dealing
- Using the estate’s funds for personal use
- Showing preference for one heir over another
- Allowing insurance, such as property insurance to lapse
- Commingling the estate’s funds with personal funds
- Failure to pay the estate’s debts or taxes
- Failure to keep accurate or detailed records
- Making speculative investments
How can I be held personally liable?
If you mismanage the estate or make an error, the probate court can hold
you personally liable and you could be removed from your duties at the
beneficiaries’ request. The best way to protect yourself is to retain
the services of a good probate lawyer as early as possible in the probate
process. We also recommend communicating regularly with the beneficiaries,
and fully documenting everything that you do.
To gain access to the professional legal advice you need, contact a probate
attorney near you.