A beneficiary may encounter problems with the executor of the estate when he suspects the executor of fraud, negligence, or conflict of interest.
If you are having problems with the executor of an estate, we at the Law Offices of Albert Goodwin are here for you. You can call us at 718-509-9774 or send us an email at email@example.com.
An executor, once granted letters testamentary by the court, enjoys a broad degree of powers in managing the estate. When these letters testamentary are granted without limitation, the executor has a lot of power in administering the estate; for example, to determine which debts of the decedent are valid and invalid and should be paid or which properties should be sold to answer for the debts and at what price.
Fraud can be committed by the executor in several ways: the executor can overcharge an estate; can have someone falsely submit a claim for debt; or simply issue checks to himself from the estate account for no reason.
Usually, beneficiaries are only allowed to object when the executor submits an accounting. By this time, the fraud has been committed, money has been spent, and the only recourse is to surcharge the executor in order to repair the damage. A surcharge action allows the beneficiary to make the executor liable for damages he has caused to the estate and to the beneficiaries.
However, to stop fraud from being further committed, a beneficiary who has a problem with the executor of an estate need not wait for a formal accounting to be submitted by the executor. A beneficiary can seek the assistance of an estate attorney to file a petition to remove the executor under SCPA § 711.
Another common problem with the executor of an estate is negligence. An executor is given a big responsibility to manage the affairs of the decedent, and if the executor is busy or is ill-advised without an estate attorney, the executor may be managing the estate with negligence to the detriment of the estate and its beneficiaries.
For example, an executor might commingle estate assets with his own assets. An executor who fails to set up an estate account and instead puts all estate funds in his own bank account, even if the executor does not use such estate assets for his own personal use, can be removed just for the mere fact that the executor commingled estate funds with his own funds.
An executor, especially one who is busy, may fail to maintain proper estate records, forget to pay estate taxes and obligations (thus incurring penalties), or neglect to collect all the assets of the decedent. Even if there is no fraud in this case, the beneficiary can still petition to remove the executor of the estate on the ground of negligence.
Conflict of interest
Another common problem with the executor of the estate is conflict-of-interest issues. Unfortunately, it’s quite common for executors to have conflicts of interest in the estate transactions. For example, an executor sells estate property to himself, to his family member, a friend, or to a business he owns or is affiliated with. Usually, when this happens, estate property is sold below market value so that the buyer can re-sell the estate property with a nice profit.
If the beneficiary fails to act immediately, estate property could have already been sold below market value. If this property is further transferred to a good faith buyer, the only recourse of the beneficiary is a surcharge action against the executor, making the executor liable for the damage caused to the estate. The problem arises when the executor does not have the funds to pay for the surcharge.
For this reason, when the beneficiary immediately learns that the executor plans to sell property below market value, or to engage in any transaction with a conflict of interest, the beneficiary should seek the assistance of an estate attorney who can file an application for a temporary restraining order and preliminary injunction, enjoining the executor from committing these acts and a petition to remove the executor from his position. This can immediately prevent wasteful dissipation of the estate assets.
When a beneficiary encounters problems with the executor of the estate, the first solution is to talk to the executor. In the end, it could just be a misunderstanding. However, if the executor fails to listen or to account for his actions and the beneficiary suspects fraud, gross negligence, or conflict of interest, it is wise for the beneficiary to seek assistance from an estate attorney to prevent further dissipation of estate assets.
Should you need assistance, we at the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY and Queens, NY. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.