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What an Executor Cannot Do

What an Executor Cannot Do

When someone passes away, their will typically names an executor – the person responsible for carrying out the wishes in the will. The executor plays a huge role in wrapping up the deceased’s affairs and distributing their assets to the rightful beneficiaries.

However, the law limits an executor’s powers to administer an estate. Executors must understand the limits of their authority to avoid any missteps that can create legal issues.

So what exactly can’t an executor do? Here are some key limitations described to you by a probate lawyer.

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Mishandle or Misappropriate Assets

The executor of an estate takes on the responsibility to properly handle and protect all of the deceased’s possessions and assets. The executor essentially has full control over the person’s entire net worth during the estate administration process.

Beneficiaries place enormous trust in the executor to inventory, protect, and manage every asset until it can be properly distributed or transferred per the will’s instructions.

Asset management is the core of an executor’s role.

They must take comprehensive measures to secure all tangible personal property owned by the decedent, such as:

  • Real estate
  • Vehicles
  • Jewelry
  • Collectibles
  • Furniture
  • Possessions in the home

Equally important is appropriately dealing with intangible assets like investment accounts, cash, and business ownership stakes. The executor has a fiduciary obligation to exercise great care and due diligence in overseeing these assets.

This means:

  • Keeping belongings safe from damage or theft
  • Making wise decisions about sales of property if liquidity is needed
  • Paying outstanding debts using estate funds
  • Collecting any monies owed to the estate
  • Taking other reasonable steps to preserve the full value of the holdings

The executor must make asset transactions or expenditures only when truly necessary for the administration of the estate.

However, the authority granted to executors also opens the door for potential abuse or negligence. An executor who fails to properly care for, protect, or make appropriate decisions regarding assets under their control has mishandled those holdings.

This constitutes a breach of their legally mandated duties and fiduciary responsibilities. Similarly, egregious is the outright misappropriation of assets – in other words, stealing or improperly giving away possessions or funds that rightfully belong to the estate.

Examples of misappropriation can include:

  • Taking valuables like jewelry for one’s personal use
  • Gifting themselves cash from estate accounts
  • Funneling money to family/friends outside of what the will permits
  • Deliberately mismanaging assets in a way that unjustly benefits the executor’s interests over those of the rightful beneficiaries named in the will

Such self-dealing directly violates the core obligations of the executor’s role.

In cases of legitimate mishandling or misappropriation of estate assets, the executor can face harsh repercussions. This represents a clear breach of their fiduciary duty to act in the estate’s and its beneficiaries’ best interests.

Culpable parties may have to reimburse the estate from their own funds to compensate for any losses created by their negligence or improper actions. Legal liability can extend even further if criminal violations like theft occur.

Additionally, the probate court that oversees the executor’s activities maintains the power to remove and replace them from their role if justified by severe violations of their duties related to asset mismanagement.

An executor who cannot demonstrate they are responsibly handling the estate’s property and holdings puts themselves at risk of being stripped of their executor status.

Executors have huge control over valuable items in the estate process. The law demands they use that power carefully and with strong morals.

Any instance of mishandling assets through negligence or intentional misappropriation for their own interests at the expense of the estate’s beneficiaries can open the door to financial penalties and permanent removal from their duties.

Any beneficiaries who suspect an executor has mishandled estate property should discuss concerns with an estate attorney immediately.

Stray From the Will’s Instructions

One executor duty is to diligently follow the exact instructions laid out by the deceased individual in their last will and testament.

A will represents a person’s final, legally binding statement concerning how they want their earthly belongings and financial assets to be handled and distributed upon passing. It is essentially their voice from the grave regarding who should inherit what from their estate.

As such, an executor appointed by the will-maker is the guardian and enforcer of those final wishes. They do not have any inherent legal authority or discretion to override, defy, or stray from the legitimate and valid provisions specified in the will document itself.

The executor’s role is as a fiduciary bound to follow those directives precisely as stated, not to reinterpret or rewrite them based on their personal opinions of what the deceased may have wanted. To do so violates their duties.

For example, if a will clearly states that the deceased’s home should be sold with the proceeds split evenly between their two children, the executor cannot take it upon themselves to give the house to just one child because they think that’s what the parent truly desired. Any attempts to deviate from or contradict explicit will provisions oversteps the executor’s authority.

The only potential exception is in cases where the will’s language is ambiguous or contains unclear or contradictory clauses that are open to interpretation.

In those limited instances, an executor may need to apply their own reasoned judgment about the likely intent behind those vague areas while still striving to adhere as closely as possible to the overall directions laid out in the document.

Even then, it is wise for the executor to ask the estate’s probate court for approval and backing of their plan to resolve those ambiguities. Operating judiciously and openly helps insulate the executor. It protects them from claims of impropriety or overstepping.

The reason there is such an extreme emphasis on executors closely following the letter of a will’s provisions is to uphold and honor the intent and autonomy of the person who established that legal instrument as their final say.

Allowing an executor to casually rewrite or deviate from those documented desires at their own discretion mocks the entire will-creation process.

Executors are in a position of authority and control over a deceased person’s valued belongings and wealth. They were hand-picked for that role based on an assumption of trust that they will uphold the individual’s legitimate final wishes.

Any attempts to contradict those wishes breach that core principle and the legal obligations the executor has accepted.

While the role does give executors certain powers and decision-making responsibilities regarding specifics of estate administration, there are strict boundaries and limitations on that authority.

They cannot unilaterally override the provisions of a valid will based on their own personal interpretations. If they do, interested parties should consult an estate attorney.

Neglect Communications With Beneficiaries

Executors have a duty to keep beneficiaries reasonably informed about the administration of the estate. This includes providing updates on major developments, asset values, and distributions.

While beneficiaries can’t demand a constant flow of communications, an executor also cannot simply go dark and cut off all updates from those entitled to inherit from the estate. This can constitute a breach of their obligations.

An executor must strike a reasonable balance by providing beneficiaries with key information at notable milestones without being overbearing or intrusive.

Delay the Estate Process Unnecessarily

Executors must administer the estate and pursue distributions to beneficiaries in a timely manner. Intentionally causing excessive delays or dragging out the process without justification is considered a breach of duty.

There are valid reasons why finalizing an estate may get extended, such as:

  • Asset valuations
  • Tax complexities
  • Contests to the will

However, delays for the executor’s own convenience or other improper reasons are unacceptable. An estate lawyer can represent the interests of beneficiaries and help keep the estate administration on track.

Favor One Beneficiary Over Others

When multiple beneficiaries of a will exist, the executor must treat them impartially. They cannot show any preferential treatment to one over the others. All beneficiaries have an equal right to information and to receive their appropriate share of distributions.

An executor who appears to be favoring certain beneficiaries by giving them extra information, faster disbursements, or larger shares than they are entitled will likely violate their fiduciary duty. A beneficiary experiencing discrimination should seek help from an estate attorney immediately.

What If An Executor Does Nothing?

Given the responsibilities of being an executor, one of the worst things they can do is nothing at all. A non-responsive or negligent executor who fails to take any substantive actions to initiate probate or administer the estate creates a problematic situation.

If an executor is blatantly neglecting their duties, there are a few potential consequences:

Removal From the Role

Beneficiaries can petition the probate court to have the executor removed and replaced, citing their inaction and failure to fulfill obligations. Courts generally want executors who will move the process forward.

If an executor does nothing to administer the estate, beneficiaries have strong grounds to request their removal. The probate court oversees the executor and has the authority to appoint a replacement if it becomes evident the current executor is unwilling or unable to do their job.

To remove an executor, beneficiaries must file a formal petition with the court explaining the executor’s deficiencies and lack of action.

Evidence can include:

  • Documentation of unreturned communications
  • Lack of progress after an extended period
  • Failures to meet court deadlines

The beneficiaries must demonstrate a pattern of problematic behavior.

The court will then likely hold a hearing where both the beneficiaries and executor can make their cases. If the judge agrees the executor has violated their fiduciary duties through negligence or inaction, they can order their removal and appoint a new executor to take over estate administration.

Courts want someone actively handling the estate’s affairs.

Personal Liability

An executor who causes damages to the estate through inaction, negligence, or breaches of duty can be held personally liable to the beneficiaries for those damages. For example, unpaid taxes that accrue penalties.

Executors have a legal obligation to manage the estate’s assets. They must make appropriate and timely payments, such as tax obligations, creditor claims, and other bills. Failing to do so can expose the estate to penalties, additional fees, or other financial harm.

If an executor’s negligence directly causes the estate to incur damages or lose value, the beneficiaries can potentially hold the executor financially liable for those damages.

For example, if the executor misses tax filing deadlines, resulting in the estate facing excessive penalties and interest charges, the beneficiaries can seek compensation from the executor themselves.

Similarly, if assets are mishandled due to the executor’s inattention and lose value as a result, the beneficiaries can make a claim against the executor to recover those losses. The executor might have to reimburse the estate out of their own pocket.

This potential personal liability provides an incentive for executors to act diligently. It highlights how there can be negative financial consequences for failing to fulfill their obligations to the estate and beneficiaries.

Loss of Compensation

In some cases, executors can receive compensation from the estate’s assets for their time and effort to administer it. However, inactive executors who don’t meet their responsibilities may not receive that payment.

Most states allow executors to claim reasonable compensation from the estate’s funds in exchange for the work involved in administering the estate and seeing it through probate. This fee is typically calculated as a percentage of the total estate value.

However, an executor’s entitlement to this compensation depends on them performing their duties throughout the estate administration. If an executor fails to act, courts can partially or fully deny them from collecting a fee.

For example, if an executor properly managed the estate for the first few months after the decedent’s passing but then became unresponsive and inactive, the court might compensate them only for the work they initially completed before neglecting their role.

Or, in cases of extreme inaction from the outset, where an executor does nothing at all to gather assets, notify parties, file documents, or make any substantive progress, courts might find them ineligible for any compensation whatsoever from the estate. They can completely forfeit their fee due to their failures.

This financial penalty of losing out on compensation incentivizes executors to remain engaged throughout their tenure. The more they do to administer the estate, the greater their chances of being approved for full compensation.

The bottom line is that doing nothing is not an option for an executor who has accepted the role. Legal and fiduciary requirements exist to manage the estate administration process, even if it takes time and effort.

Following the Rules Protects Everyone

At the end of the day, the restrictions and duties of executors should protect the integrity of the estate plan. It prevents executors from abusing their position for personal gain at the expense of beneficiaries.

Executors who act properly, exercise due diligence, communicate as required, and work in the best interests of the estate and its beneficiaries shouldn’t encounter legal problems.

But those who try to overstep their authority or act in bad faith open themselves up to potential removal and liability. Following the guidelines is in everyone’s interests.

If you run into issues with the administration of an estate, call an estate planning lawyer.