Planning your estate can be very beneficial, and while there are many advantages, the potential exists for an individual or even multiple people to commit fraud. A person named executor of an estate bears a great deal of responsibility. However, when you suspect an executor is mismanaging an estate’s assets or mishandling their responsibilities, recognizing some warning signs can help you decide whether to challenge their handling of the estate. If fiduciaries fail to meet their legal obligations, our attorneys at Pedder, Hesseltine, Walker & Toth, LLP, can help you identify warning signs of estate planning fraud and hold negligent executors accountable.
What Is the Role of an Executor?
An executor or trustee is a fiduciary for the estate and its beneficiaries. The executor has a special duty to the beneficiaries of a will or trust and must always act with the best interests of those beneficiaries in mind.
Some additional responsibilities of the estate executor include:
- Ensure that trust beneficiaries are treated impartially
- Control and preserve the assets of the trust
- Make sure trust assets are used for trust purposes only and not for personal gain
- Defend the trust against potentially harmful legal action
- Maintain a separation between trust property and other property
- Refrain from becoming a trustee for another trust if it conflicts with their responsibilities.
In the event that an executor causes beneficiaries any harm, they will be held personally liable. Beneficiaries may also sue an executor if they feel the executor acted in bad faith. If you suspect mishandling in your estate planning, consider engaging the counsel of an experienced estate planning attorney.
When to Challenge an Executor’s Handling of an Estate
If you suspect an executor has violated their fiduciary duty to the estate and its beneficiary, being aware of and watching for common warning signs can help protect your rights and interests.
Sign #1: The Executor Provides Little to No Communication With Beneficiaries.
The executor of an estate is required to communicate openly and honestly with the beneficiaries. You have the right to ask questions and receive regular updates about the status of the estate. If the executor fails in this duty, consider consulting with an estate planning attorney.
Sign #2: The Executor Unnecessarily Delays the Administration of the Estate.
While wrapping up someone’s estate can be time-consuming, it could take even longer if the executor is not doing their job or misses essential deadlines. Talking to an estate planning attorney if you suspect the executor is not actively working toward settling the estate can help you determine the right course of action.
Sign #3: The Executor is Withholding Inheritance.
The executor cannot begin distributing estate assets until the debts have been paid or, in some cases, if the court has approved the distribution. Nevertheless, if the executor fails to meet this deadline, withholds inheritance from one beneficiary due to a strained relationship, or distributes an estate in a manner that improperly favors one group of beneficiaries, they may face severe penalties, and beneficiaries may petition the court to order the distribution of assets.
Sign #4 Commingling Assets and Misusing Estate Assets.
A separate bank account should be set up by executors in order to pay bills and make deposits on behalf of the estate. If you suspect the executor has fallen prey to commingling personal and estate funds or misused assets, you should share your concerns with a skilled estate planning attorney. Additionally, while sometimes an executor is also a beneficiary, they should avoid paying themselves or seeking compensation in exchange for their services until the administration of the estate is complete.
Anyone dealing with an executor who is not properly handling the estate may choose to seek the removal of the executor. Additionally, the executor can be sued by the beneficiaries for various reasons, including a breach of fiduciary duty.
Discuss Your Case With an Estate Planning Attorney Today
Dealing with the complexities of trust disputes can be stressful and time-consuming. Being proactive by seeking the advice of a knowledgeable estate planning attorney can make all the difference in safeguarding your rights.
At Pedder, Hesseltine, Walker & Toth, LLP, our attorneys have extensive experience dealing with cases involving executors who may have mishandled the estate or breached their fiduciary duty. Call us today at 925-283-6816 or reach out online to schedule an initial consultation to learn more about how we can help.