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Ways an executor can breach fiduciary duty

On Behalf of | Oct 25, 2019 | Uncategorized |

When a loved one dies, the will usually names a party to administer the estate. This party becomes the executor and may be a family member, friend, legal professional or even an institution such as a bank.

The purpose of the executor is to handle the affairs of the estate according to the decedent’s wishes. However, sometimes, an executor may mishandle assets or harm the estate in any other way, which constitutes a breach of fiduciary duty.

What does a breach of fiduciary duty mean?

The term refers to the legal obligation of the executor to act in the best interests of the estate. When the party fails to do so, misconduct has occurred and can lead to penalties.

What are examples of a breach of fiduciary duty?

Simply making a mistake may not necessarily constitute a breach, but these usual signs indicate an executor’s failure to fulfill the duty appropriately:

  • Not admitting the will to probate
  • Failing to report actions to the court
  • Using assets from the estate for personal gain
  • Making bad investments
  • Selling property well below its value
  • Distributing inheritances to the wrong people or not at all

From the start, the executor may not even wish to accept the role or may be unqualified at the time of the decedent’s death. In such cases, the court may appoint someone else if there are no alternates in the will.

What happens when there is a breach of fiduciary duty?

An executor who is not meeting legal obligations or acting in the estate’s best interests may lose the position and face legal consequences, such as having to repay stolen money. However, it usually takes the beneficiaries to make the court aware of the problem. They must prove that a breach of fiduciary duty has occurred. If the court agrees, it will remove the party and name a new executor.