When it comes to handling your loved one’s estate, the executor has a series of important duties and responsibilities. If you suspect an executor is mismanaging your inheritance, you can challenge their handling of the estate.
First, know the warning signs of an executor mishandling the estate. Then, consider engaging the counsel of a probate litigation lawyer. Working with a probate litigation attorney does not mean that you will end up in litigation. It does, however, mean that you will have an attorney on your side, protecting your rights – and your inheritance – throughout the probate process.
If you are concerned about the administration of your loved one’s estate, watch for these warning signs:
Warning Sign #1: Little or No Communication with Beneficiaries
As part of their fiduciary duties, the executor must keep beneficiaries reasonably up to date with the estate. The executor of your loved one’s will should notify you if you are included in the will early in the process and be transparent about the value of the inheritance.
If you receive little to no communication from the executor, you have the right to ask questions. You should be receiving regular updates about the status of the estate. If this is not the case, you may want to talk to a probate litigation attorney to understand and exert your rights.
Warning Sign #2: Taking Too Long
Wrapping up someone’s estate is a time-consuming process, and heirs and beneficiaries often feel impatient. Impatience alone is not a reason to get a probate litigation attorney involved, but certain delays and mistakes can be costly.
If you believe the executor is not doing their job or they miss an important deadline, talking to a probate lawyer is a good idea.
Warning Sign #3: Inventory Is Delinquent
Executors must file an inventory and appraisal of all the assets in an estate within 90 days of being appointed. Unless the executor requests an extension (which should be communicated to you – see Warning Sign #1), the inventory is delinquent on the 91st day.
Often, a delinquent inventory is the first sign that an executor is not acting in good faith.
You should speak to a probate litigation attorney if you do not receive an inventory and appraisal of the estate within 90 days, particularly if you have not heard from the executor at all. You may be able to ask the court to remove the executor, and a probate litigation lawyer can help.
Warning Sign #4: Withholding or Delaying Inheritance
An executor can only distribute the assets in an estate once all debts are paid and, in some cases, only with approval from the court. As we mentioned earlier, this can take time. Nevertheless, Texas courts normally expect the executor to distribute the assets of the estate within at least 15 months, barring exceptional circumstances.
If the executor has failed to meet this deadline, a beneficiary may petition the court to order the distribution of assets.
In some cases, an executor may distribute the decedent’s assets but withhold inheritance from one beneficiary due to a strained relationship or as a form of revenge. Other times, an executor may distribute an estate in a way that improperly favors one group of beneficiaries over another (e.g., biological children vs. stepchildren). If this happens, the executor can face serious civil penalties, and you may need a probate litigation attorney to get the inheritance promised in your loved one’s will.
Warning Sign #5: Insurance on Valuable Assets Allowed to Lapse or Not Adequate
Some of the executor’s responsibilities are to manage estate assets and protect the decedent’s personal property. If the decedent owned a house, this might mean paying the mortgage, taxes, and insurance until the house is sold or passed to an heir.
Letting insurance on valuable assets lapse or purchasing insurance that does not fully protect valuable assets are forms of executor misconduct.
If an executor is not taking care of your loved one’s property, you may need to speak to an estate litigation attorney.
Warning Sign #6: Selling Estate Assets for Less Than They’re Worth
The executor must act in the best interests of the estate and its beneficiaries. Selling estate assets for less than they’re worth is rarely in the best interests of the estate and therefore constitutes mismanagement of the estate. Often, the executor will get a kickback for selling someone a discounted asset or sell assets at a discount as a favor or gift to an associate or loved one.
Generally, acting in the best interests of the estate and its beneficiaries means selling estate assets for as much as possible – not giving away assets or getting kickbacks for unbeatable prices.
If you have concerns about how estate assets or being sold – or who they are being sold to – share them with a probate litigation attorney.
Warning Sign #7: Making Creditor Claims to an Estate or Paying Personal Expenses with Estate Assets
One of the first things an executor should do is set up a separate bank account to pay bills and make deposits on behalf of the estate. Otherwise, the executor could fall prey to commingling assets (mixing personal funds with estate funds) and misusing estate assets.
Sometimes, an executor is also a beneficiary or a creditor, but they should avoid paying themselves until estate administration is complete. Furthermore, although Texas law authorizes an executor to seek compensation from the estate in exchange for their service, those fees are capped at a certain amount. When executors improperly pay themselves for their services, use estate assets to handle personal expenses, or make claims against the estate they are supposed to protect, they are mishandling the estate and can be removed and held legally accountable.
Please note that, under certain conditions, executors may use estate assets to protect or preserve the assets of the estate and pay necessary expenses. If an executor acts in good faith and uses the estate to defend a contested will, for example, that generally would not be a misuse of estate assets. Whether or not the executor meets these requirements depends on the facts and circumstances of each case.
Still, if you are concerned an executor is stealing from the estate, you should speak to a probate litigation attorney before the money disappears.
What Are the Duties of an Executor?
The executor of an estate is responsible for locating the will, filing it with the probate court, notifying banks, credit card companies, and government agencies of the decedent’s death, deciding what kind of probate is necessary, and representing the estate in court.
The executor must also set up a separate bank account for the estate, file an inventory of the estate’s assets with the court, give notice of the estate and a copy of the will to the beneficiaries, and take care of all assets until they can be distributed.
Finally, the executor must pay the decedent’s debts and taxes, distribute assets according to the will, and dispose of other property.
At all points during the probate process, the executor has a duty to act in the best interests of the estate and its beneficiaries and keep heirs and beneficiaries informed. This fiduciary duty is first and foremost to the decedent’s wishes as communicated in their last will and testament.
As part of their fiduciary duty, the executor must also act like a reasonably prudent person would in similar circumstances, act impartially, and be honest and fair in their dealings.
Please note that serving as executor is time-consuming and difficult, and it is appropriate for an executor to be compensated. Many states set compensation based on the complexity of the estate, or the will itself may specify compensation.
If the executor has potentially violated their fiduciary duty to the estate and its beneficiaries or handles things in a way that is dishonest or unfair, those concerned with the estate may bring a claim against the executor in court.
Who Pays the Legal Fees if the Executor is Mishandling the Estate?
Plaintiffs (beneficiaries) are responsible for their legal fees. Unless the plaintiffs have proved a breach of fiduciary duty, the executor can also use the estate to defend themselves. Challenging an executor can be risky, and you should only do it if you are sure something is wrong.
Losing a case against an executor cannot only cost you money but also reduce the value of the estate.
These Rules Apply Even When There Is No Will
When a person dies without a will, their estate still needs to be probated and the court still needs to appoint a person to administer the estate. That person is called an “administrator” rather than an “executor”. There are many different types of estate administrations under Texas law but, in general, the rules listed here apply to both administrators and executors.
If your loved one died without a will and the court-appointed an administrator of their estate, and if you notice the administrator engaged in any of the actions listed above, consider contacting a probate litigator to discuss and enforce your rights.
Does a Mishandled Estate Always Result in Litigation?
Fortunately, no. Sometimes, an executor’s mishandling of an estate is an honest mistake or mere laziness, and the matter can be solved through simple intervention and negotiation. In other cases, mediation can help you get things back on track.
When Should I Confront an Executor About Mishandling the Will?
Don't jump to conclusions. Unguarded actions could jeopardize the estate that you are trying to protect. Instead, discuss your rights and legal options with the probate litigation attorneys at Hendershot Cowart P.C. If you are worried your loved one’s estate is at risk, our team will create a strategy to protect your interests as a beneficiary.
If you are not getting the unwavering commitment you deserve from the executor of your loved one’s estate, get it from us – call us at (713) 909-7323 or contact us online to schedule an appointment today.