An executor has the authority and responsibility to manage a decedent’s estate, gather the decedent’s assets, pay their remaining debts, and distribute those assets to beneficiaries and heirs. However, the decedent’s will and applicable probate laws can impose limitations on an executor’s power.
What Powers Does an Executor Have?
Under probate law and a decedent’s will, an executor has various responsibilities and powers, including:
- The power to collect assets
- The authority to manage the estate’s assets, including managing investments or business interests held by the estate
- The responsibility to carry out the decedent’s wishes as outlined in the will, including distributing estate assets as directed in the will
- The authority to pay the decedent’s debts and estate administration expenses (e.g., attorney or accountant fees)
- The obligation to file and pay estate taxes
- The discretion to make specific financial decisions regarding estate assets, such as selling property to generate funds to pay debts/expenses, or distribute inheritances to beneficiaries
Legal and Ethical Guidelines
Executors must discharge their duties as directed by the decedent’s will. For example, when a will bequeaths a specific asset to a beneficiary, the executor must direct the distribution of that asset to that beneficiary. However, executors have broad discretion to manage various aspects of an estate. Executors must use their authority under their fiduciary duties to the estate and its beneficiaries. An executor’s fiduciary duties include:
- Duty of Loyalty – An executor’s duty of loyalty requires them to act in the best interest of the estate and its beneficiaries, avoiding conflicts of interest or benefitting themselves or third parties at the estate’s expense.
- Duty of Diligence – The duty of diligence requires an executor to make reasonable decisions while handling estate administration, which may involve seeking professional advice or assistance from lawyers, accountants, or financial advisors.
- Duty of Good Faith and Fair Dealing – An executor must act in good faith and treat beneficiaries fairly and evenly, unless otherwise specifically directed by the will. The duty of good faith also encourages executors to maintain transparency with beneficiaries and keep them informed of the estate administration process.
Courts can supervise an executor’s actions according to the will and applicable probate laws.
When Can a Beneficiary Challenge an Executor’s Decisions?
A beneficiary can go to court to challenge an executor’s decisions when those decisions involve negligent mismanagement, failure to act when required to do so by the will, conflicts of interest, or willful misconduct (e.g., embezzling estate funds). Examples of red flags that beneficiaries may look out for that signal that an executor has overstepped their authority or engaged in misconduct include:
- Executor refuses to provide an accounting or copies of estate documents
- Executor delays distributions of inheritances without a reasonable explanation
- Estate assets go missing
- Only some beneficiaries receive their inheritances
- Executor ignores beneficiary requests or communication
Beneficiaries can file legal actions in court to challenge an executor’s decisions. A court may order relief in the form of an injunction ordering the executor to take or refrain from taking specific actions, an order removing the executor from the position, or a judgment granting beneficiaries compensation for financial losses caused by the executor’s mismanagement or misconduct.
How Beneficiaries Can Hold an Executor Accountable
Beneficiaries of your estate may have legal options to hold an executor accountable for errors or mismanagement, including:
- Requesting an accounting of the executor’s financial actions taken on behalf of the estate, including the assets collected, debts and expenses paid, and inheritances already distributed
- Pursuing mediation to resolve disputes between beneficiaries and the executor
- Filing a legal action with the probate court to challenge the executor’s actions or to request the executor’s removal and replacement
Contact an Estate Planning Attorney Today
When creating your estate plan, understanding what authority your executor will have to administer your estate may inform your estate planning choices. Contact E.A. Goodman Law LLC today for a confidential consultation to get help drafting a tailored estate plan.
Posted in: Estate Planning