Can an executor borrow money from the estate account? No. Why not? Because he is the one managing the money. So if he takes money from the account, it’s presumed to be embezzlement, which is simply known as stealing.
But how about if an executor is also a beneficiary? Don’t some of the money in the estate also belong to him? For example, a man left an estate for his four children, and one of the children is an executor. Can the executor-child borrow money from the estate and say that he is just borrowing his own money? The answer to that is absolutely not. Even though the executor is one of the beneficiaries of the estate, at the end of the day the estate is not his. The estate belongs to all the beneficiaries. So if the executor borrows money, he is considered by the law to be taking everyone’s money, not just his own. As an example, if he borrows four thousand dollars, he is not borrowing four thousand dollars of his own money. He is stealing a thousand dollars from each of his siblings. If he takes a penny, most of that penny belongs to the other beneficiaries of the estate.
What can happen if an executor neglects good advice and does borrow money from the estate account? Nothing good. The executor can be removed by the court. The court will force the executor to return the money. The court might order the executor to pay for his own attorneys’ fees as opposed to using estate funds to pay for his attorney’s fees. The judge may even order the executor to pay the beneficiaries’ attorneys’ fees. What is scarier is that the executor can even be criminally prosecuted for stealing. That’s right, a criminal prosecution even if the executor is one of the beneficiaries of the estate and even if the amount he took is less than his stake in the estate account and intended to return the funds. The judge can refer the case to the District Attorney’s office, which has the power to prosecute the case in criminal court.
Above, we’ve referred to an executor as a manager. The legal term for someone managing money, including an executor is “fiduciary.”  New York’s Estates, Powers and Trusts Law governs the conduct of an estate fiduciary.
New York Consolidated Laws, Estates, Powers and Trusts Law – EPT § 11-1.6 states that “Every fiduciary shall keep property received as fiduciary separate from his individual property. He shall not invest or deposit such property with any corporation or other person doing business under the banking law, or with any other person or institution, in his own name, but all transactions by him affecting such property shall be in his name as fiduciary.” 
New York’s Penal Law (the Criminal Law) states that “A person steals property and commits larceny when, with intent to deprive another of property or to appropriate the same to himself or to a third person, he wrongfully takes, obtains or withholds such property from an owner thereof.” 
The estate as an entity is the owner of the funds. If an executor borrows money from the estate, he commits larceny.
New York Penal Law continues to say that “Larceny includes a wrongful taking, obtaining or withholding of another’s property, with the intent prescribed in subdivision one of this section, committed … by conduct heretofore defined or known as common law larceny by trespassory taking, common-law larceny by trick, embezzlement, or obtaining property by false pretenses.” 
To sum up, executors should keep the estate funds where they belong. In the estate account. Whenever they receive any funds relating to the estate in any way, those funds should be deposited into the estate account and not taken out for any reason without either signed consent from each and every beneficiary or an order of the court authorizing the executor to disburse the funds.
An executor should place all estate funds into the estate account
Whether you are a beneficiary who thinks that an executor is borrowing money from the estate, or if you are an executor and you feel that you are being falsely accused of borrowing money from the estate and not returning it, you can speak with New York estate attorney Albert Goodwin, Esq. He can be reached at (212) 233-1233.