Can an Executor of a Will Remove a Beneficiary in New York City?

An executor of a will cannot remove a beneficiary. An executor’s job is to execute the will’s provisions. If the testator has named beneficiaries in his will who he wishes to receive his property, the executor has no choice but to follow the testator’s wishes, as stated in the will and distribute said property to the beneficiaries, after payment of the estate’s debts and expenses.

Instances When Beneficiaries Do Not Receive Their Inheritance

Despite the fact that the executor cannot remove beneficiaries, there can still be instances when a beneficiary will not receive his designated inheritance. This can happen when the estate´s assets are not enough to cover the estate´s debts and expenses. In this case, there may be beneficiaries who may not receive their inheritance.

Supposing that after payment of estate debts and expenses, a small amount is left for the estate. The remaining estate assets are not enough to satisfy all the distributions. In that case, although the executor did not remove a beneficiary, a beneficiary may not receive his inheritance if he is the last to receive anything under the order of liability in EPTL § 12-1.2.

Under this provision, the following receive priority, in the order provided, unless the will shows that the testator specifically preferred certain beneficiaries over others:

• Surviving spouse for dispositions that qualify for the estate tax marital deduction;
• Specific beneficiaries;
• General beneficiaries;
• Residuary beneficiaries; and
• Distributees.

For example, if after payment of estate debts and assets, the remaining estate is $10,000, and the testator gave $4000 to his surviving spouse, $4000 to his daughter, $2000 to his son, and the residuary estate to his brother, the brother, who is a designated beneficiary, will not receive anything. Under the law, specific beneficiaries have priority over residuary beneficiaries. Since the estate was only enough for the specific beneficiaries, the brother who was a residuary beneficiary received nothing.

This is an example of where the executor did not remove a beneficiary, but the execution of a will resulted to a beneficiary receiving nothing.

Instances When an Executor of a Will Can Choose the Beneficiaries

There have been some instances where an executor was given the choice to choose beneficiaries from a class of beneficiaries. For example, an executor may be granted the power to choose a charity or 501(c)(3) non-profit organization as the residuary beneficiary. Here, although the executor is not given the power to remove a beneficiary, the executor can choose a beneficiary.

Ultimately, what the executor can or cannot do depends on the testator’s wishes, as expressly provided in the will. If there is any doubt, the court can be requested to interpret the provision in the will to determine the testator’s express intent and preference.

Should you need help in the interpretation of a will or any matter pertaining to wills, 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].

The Executor's Limited Authority

The principle that an executor cannot remove a beneficiary derives from the fundamental nature of the executor's role. The executor is a fiduciary whose authority comes from the will. The will reflects the testator's wishes about how the estate should be distributed. The executor's job is to carry out those wishes, not to second-guess them.

An executor who attempts to remove a beneficiary — refusing to distribute to a person the will names, or directing distribution to someone the will does not name — is acting outside their authority. The beneficiary can compel the proper distribution through the court. The executor can be surcharged or removed for the misconduct.

Lapsed and Adempted Bequests

There are limited situations where a will appears to leave something to a beneficiary, but the beneficiary in fact receives nothing. These are not executor actions; they are legal consequences of the will's terms applied to the actual facts:

Lapse. If a beneficiary dies before the testator, the bequest to that beneficiary lapses unless the will provides otherwise or unless New York's anti-lapse statute (EPTL § 3-3.3) applies. The anti-lapse statute saves bequests to certain close relatives by directing the bequest to the predeceased beneficiary's issue.

Ademption. If the will makes a specific bequest of a particular item and the testator no longer owns the item at death, the bequest adeems — it fails entirely. The beneficiary receives nothing.

Disqualification. Certain beneficiaries can be statutorily disqualified. A spouse who abandoned the decedent loses inheritance rights under EPTL § 5-1.2. A beneficiary who killed the decedent (the "slayer rule") is disqualified.

The executor implements these doctrines as a matter of applying the law to the facts — not as exercising discretion to remove anyone.

Disclaimers

A beneficiary can voluntarily refuse to accept their inheritance by filing a disclaimer. Disclaimers are useful for tax planning, asset protection, and other reasons. The disclaimer must be filed within nine months of the testator's death and must meet other technical requirements under EPTL § 2-1.11.

When a beneficiary disclaims, the property passes as if the beneficiary had predeceased the testator. The will's contingent provisions (or the anti-lapse statute) determine where the disclaimed property goes. The disclaimer is irrevocable once made.

Disclaimers are voluntary by the beneficiary. The executor cannot force a beneficiary to disclaim. But the executor should inform beneficiaries of the option in appropriate situations.

Set-Off Against Beneficiary Distributions

One narrow situation where the executor can effectively reduce what a beneficiary receives is set-off. If the beneficiary owes the estate money — an unpaid loan from the decedent, a debt to the decedent's business, or other obligation — the executor can set off the debt against the beneficiary's distribution. The beneficiary receives the net amount.

Set-off is supported by general principles of fiduciary law. The executor's duty to collect estate assets includes collecting debts owed by beneficiaries. Allowing the beneficiary to receive a distribution while still owing the estate would be inconsistent with the fiduciary obligation.

Set-off requires documentation. The debt must be real and provable. The executor should provide the beneficiary with information about the set-off and an opportunity to dispute the underlying obligation. Where the debt is contested, court intervention may be needed.

Conditions in the Will

Some wills include conditional bequests. A bequest may depend on the beneficiary doing or not doing certain things, reaching a certain age, surviving the testator by a specified period, or other conditions. The executor's job is to evaluate whether the conditions have been satisfied.

For example, a will might leave $50,000 to a grandchild "if she has graduated from a four-year college by the time of my death." The executor reviews the facts — has the grandchild graduated? If yes, the distribution happens. If no, the condition has not been satisfied and the bequest fails.

Conditions that violate public policy or that are unreasonably restrictive can sometimes be struck by the court. But within proper limits, conditional bequests are enforceable.

What Beneficiaries Should Do If They Suspect Removal

If you are a named beneficiary and believe the executor is treating you as if you were not entitled to your bequest, take these steps:

• Get a copy of the will. Read it carefully to confirm what you are entitled to.
• Contact the executor in writing to request your distribution. Document the request and the response.
• If the executor refuses or fails to respond, demand an accounting. The accounting will show what the estate has and what has been done with it.
• If the executor will not provide an accounting, petition the court to compel one under SCPA § 2205.
• If the accounting reveals that the executor has wrongfully withheld your distribution or has misappropriated funds, file specific objections and pursue surcharge.
• If grounds exist, petition for removal of the executor under SCPA § 711.