Can an Executor Decide Who Gets What?

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If you have been nominated as executor or your loved one has died and left a will, nominating a person you are not on good terms with as executor, you are probably wondering, can an executor decide who gets what?

No, an executor cannot decide who gets what from the estate. It is the testator, the one who wrote the will, who decides who gets what. The executor’s job is to execute the will. When the will’s provisions and the testator’s intentions are clear, the executor has no discretion on how to distribute the estate of the testator.

Basic rules on who gets what

When there is a will, who gets what depends on what the will says, regardless of the executor’s preference. When is the will not followed?

When the will is not admitted to probate; or
When the estate assets are not sufficient to pay for the liabilities; or
When the specific beneficiary predeceased the testator

When the will is not admitted to probate

When the will is not admitted to probate, the will is not followed, but this does not mean that the executor will decide who gets what. When there is no will or the will is denied probate, the decedent’s estate is distributed under the laws of intestacy. In New York, the applicable provision is EPTL § 4-1.1, which gives priority to the spouse and issue, and only upon their absence are the parents and siblings (in that order) entitled to inherit. The order of preference in the descent and distribution of the estate in cases of intestacy is in EPTL § 4-1.1.

When the estate assets are insufficient to pay for the liabilities

When estate assets are sufficient to pay the debts, the executor has no choice but to follow the will in distributing the estate assets. However, when the estate assets are insufficient to pay the decedent’s liabilities, the executor must abate the dispositions in the will in order to pay for the liabilities.

But which bequests in the will should the executor abate? Does the executor have unlimited absolute discretion on which bequest to abate in order to pay for the decedent’s liabilities?

EPTL §§ 12-1.2 and 13-1.3 provide for the order of liability and the assets chargeable with the payment of estate obligations. In case the estate property is insufficient, absent an order of preference made by the testator, the following dispositions under the will shall abate, in the following order:

Distributive shares in property not disposed of by will (the distributees under intestacy)
Residuary dispositions (residuary beneficiaries)
General dispositions
- With demonstrative dispositions being treated as general to the extent that the property or fund charged with a demonstrative disposition has adeemed
Specific dispositions
- With demonstrative dispositions being treated as specific to the extent that the property or fund charged with a demonstrative disposition has adeemed
Dispositions to surviving spouse which qualifies for estate marital tax deduction

There have been cases where two specific bequests have competed on which one should be abated. The beneficiaries would usually claim that the intent of the testator is that the other bequest should be abated first than the other. There has been no specific rule on which specific bequest should be abated, and which bequest would be abated would depend on the intent of the testator and arguments of the beneficiaries.

When the specific beneficiary predeceased the testator

When a specific beneficiary predeceases the testator, the executor is still not given a right to decide who receives what. Under the New York Anti-Lapse Statute, the share of the predeceased beneficiary goes to his issue, unless a contrary intention is specified in the will.

Hypothetical example

When the decedent gives a specific gift to a beneficiary, it is the executor’s duty to execute this specific bequest and gift such specific gift to the specific beneficiary.

For example, your father died, leaving the following property:

Studio apartment in Manhattan worth $200,000
House in Queens worth $500,000
Bank account with $100,000
IRA account worth $500,000, with your surviving mother who has dementia and living in a nursing home as beneficiary
401(k) account worth $400,000, with your surviving mother who has dementia and living in a nursing home as beneficiary
Credit card debt of $10,000.

Your father named your brother, whom you have not spoken to in a decade, as executor. In his will, your father left the studio apartment in Manhattan to you and left his residual estate to you, your brother, and your mother in equal shares.

Can the executor, your brother who you have not spoken to in years, decide to sell the studio apartment in Manhattan, depriving you of the gift your father gave you in the will, and use the proceeds to pay for the funeral expenses, taxes, and other debts? Can the executor decide who gets what? No, in this case, the executor cannot decide to sell the studio apartment that your father gave you. The executor should administer the will in accordance with the law and your father’s intentions.

Under EPTL § 12-1.2, the order of liability are distributees, residuary beneficiaries, general beneficiaries, specific beneficiaries, and surviving spouse, in that order. Since your father specifically gave you the studio apartment, the executor should, to the best of his ability, preserve this gift because residuary beneficiaries should first be liable for estate debts before specific beneficiaries. Thus, the executor should first use the residual property, the money in the bank account, and if insufficient, to sell the house in Queens, to pay for the debts, taxes, and expenses of the estate. It is only when these residual properties are insufficient to pay for the debts can the executor sell your gift, the Manhattan apartment, to pay for the debts. Thereafter, the executor must give you the excess amount remaining, if any, in order to comply with the testator’s wishes to give you the Manhattan apartment or its remaining value after payment of expenses.

What can an executor decide on

When the will does not make a specific gift of a property, that property, if considered part of the estate, is residual property. The executor has more discretion in deciding how to distribute the residual property to the beneficiaries if the will is silent or open to interpretation.

In the example above, the IRA and 401(k) accounts are not considered part of the estate because they have designated beneficiaries, the surviving mother. They automatically pass to the mother when the father dies. However, the $100,000 bank account and the Queens house are not specifically given to anyone. Therefore, they form part of the residual estate. The will is silent as to how it is going to be distributed, except for the fact that it should be distributed into three equal shares between the mother, you, and your brother. Thus, the executor can decide to distribute the residual estate in cash or in property, for as long as the residual estate is distributed in three equal shares. Whatever the executor decides, such decision must be aligned with what the executor feels is for the best interests of the estate since the executor has a fiduciary duty to the estate and its beneficiaries.

In the case above, the executor must pay first the debts of the estate in accordance with the priority provided under SCPA § 1811. The net estate can then be distributed in accordance with the will of the testator. In the example, if all the debts of the estate (including administrative expenses, taxes, and other claims) are $55,000, the executor should still have $45,000 left in the bank account and the house in Queens.

The executor can distribute the $45,000 in the bank account in three equal shares: $15,000 each to you, your mother, and your brother, and thereafter deed the house in Queens to you, your brother, and your mother as co-owners or tenants-in-common. In the alternative, the executor can sell the Queens house and distribute the net proceeds to the three of you in three equal shares. This discretion can be exercised by the executor since the will is silent and open for interpretation. However, any decision made by the executor should always be in accordance with the estate’s best interests, free from the executor’s conflict of interest.

The executor’s duties can be complex and should always follow the law. Otherwise, the executor could be subject to lawsuits initiated by the beneficiaries and subjected to payment of surcharge and damages. This is why it is always important for the executor to be guided by an experienced estates lawyer to ensure that his actions are always in accordance with law and make him free from liability. We have helped both executors and beneficiaries with their issues regarding estate settlement. Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].