Common executor mistakes that can lead to estate litigation
This article looks at some of the most common mistakes made by estate executors.
Acting as an estate executor( also known as a Personal Representative in some states) is a big responsibility. Yet when choosing their executor, people often make the choice based on emotional reasons, such as family history how much they trust that person. While trustworthiness is certainly an important quality in an executor, it does not make up for the fact that distributing an estate is complicated, time-consuming work that many executors are simply unprepared for. As a result, executors are sometimes prone to making poor decisions that, in turn, can lead to estate litigation and disputes. Below are just a few of the most common mistakes that are made by estate executors.
Who is the Estate?
A common issue which confronts Executors or PR’s who “who is the Estate?”. The answer which comes first to mind, is what is stated in the Will. Often Executors assume their duties run only to the people named in the Will. This is not the case. Executors owe responsibilities to both “heirs and devisees”. Devisees are people named in the Will. But Heirs, are the lineal descendants of the decedent, such as children, grandchildren, siblings and parents. Occasionally heirs are omitted, either intentionally or by mistake, as devisees from a Will. The executor owes a duty to ensure the intent of the testator is carried out, and the heir and devises receive the correct share of the estate. This means that all of the appropriate heirs have been notified and given a change to challenge the Will.
Failing to secure assets
As U.S. News & World Report points out, an executor should try to secure the estate as quickly as possible. Securing the estate includes doing such things as gathering keys to all vehicles, changing locks on the property, and ensuring that assets do not go missing. Failing to secure the estate can lead to serious problems. Heirs who believe that certain items were “promised” to them, for example, may attempt to take those items themselves without waiting for them to be distributed. The will may later show that those items were actually intended for somebody else, but at that point the items may be permanently missing and impossible to distribute.
Paying creditors too quickly
Paying bills and debts quickly is a mistake that many executors make, but one which could expose them to personal liability. As the Wall Street Journal points out, paying debts before other classes is a potential violation of fiduciary duty. Executors owe a greater duty to the heirs of an estate rather than to the estate’s creditors. Paying off debts too quickly could leave heirs with far less of a share of the estate than might have been the case if the executor had been tougher in negotiating with the creditors.
Being an executor is hard work and one which usually requires legal help. Particularly for large estates, an executor should reach out to an estate administration attorney for assistance. Unfortunately, some executors decide to go it alone rather than get professional help. Since many executors are unfamiliar with estate planning laws and regulations, the potential for mistakes to arise tend to increase when they don’t seek legal advice. Those mistakes could, in turn, end up hurting potential heirs.
When the Estate plan is confusing, or there are competing interests between family members, things can often move quickly, with people asserting rights to assets , and taking steps to solidify their positions, often very quickly. As an executor, you have fiduciary duties of loyalty, full disclosure and due care to the heirs and devisees. As an heir and devisee you need to ensure the assets are being preserved and the estate plan and intentions of the decedent are being followed. Contacting the bank, financial institutions and getting representation to preserve your rights as an heir, devisee , and as a personal representative is essential to protecting your interests.
Estate litigation help
To ensure the estate is distributed properly, an estate litigation attorney may be able to help. An experienced attorney can assist those who are unsatisfied with the way an estate has been handled understand what their legal options may be and whether they can pursue litigation in order to potentially make matters right.