When an executor gets it wrong

Beneficiaries frequently believe an executor is performing badly. Sometimes they are right, and the remedies available depend on distinguishing incompetence from breach.

What is not a breach

Worth establishing first, because most complaints fall here.

Administration taking longer than beneficiaries expected.

Refusing to distribute before the creditor claim period has passed.

Selling an asset a beneficiary wanted to keep, where the will directs a sale.

Making a judgement call about timing or method that a beneficiary would have made differently.

Declining to pay a beneficiary's expenses from the estate.

An executor has discretion, and exercising it in a way beneficiaries dislike is not itself actionable.

What is

Self-dealing. Buying estate assets, favouring themselves as a beneficiary, or using estate property personally.

Commingling. Mixing estate funds with personal funds, which is a breach regardless of whether anything is lost.

Failing to account. Beneficiaries are generally entitled to information about assets and transactions.

Partiality between beneficiaries.

Failing to preserve assets — leaving property uninsured, allowing it to deteriorate, or failing to manage investments over an extended period.

Distributing improperly, including before debts and taxes are settled.

Failing to file tax returns or to pay taxes due.

Unreasonable delay amounting to a failure to administer.

The steps in order

Ask, in writing. A specific request for information — an inventory, an accounting, a timeline — with a reasonable deadline.

A surprising proportion of disputes resolve here, because the executor was simply not communicating.

Involve an attorney to write. A letter from a lawyer frequently produces a response where a beneficiary's letter did not.

Petition for an accounting. Courts will generally order an executor to produce a formal accounting on a beneficiary's application.

This is a relatively low-cost step and it produces the information on which any further action depends.

Petition for instructions, where the dispute is about the proper course rather than about misconduct.

The court can direct the executor, which resolves the matter without alleging wrongdoing.

Petition for removal, where there is a genuine basis.

Grounds vary by state and generally include breach of duty, incapacity, conflict of interest, failure to perform, and mismanagement.

Courts are reluctant to remove an executor named by the deceased, and the threshold is meaningful.

A surcharge action, seeking to hold the executor personally liable for losses caused by breach.

The cost consideration

Which frequently determines whether any of this is worth pursuing.

Litigation costs come from the estate or from the beneficiary, and both reduce what is ultimately received.

Where the executor's conduct has caused a loss of a few thousand dollars, an action costing considerably more achieves nothing except vindication.

Where the loss is substantial, or where the executor is continuing to cause damage, the calculation changes.

An honest assessment from an attorney about the probable cost and outcome should come before anything is filed.

For executors

The protective measures.

Communicate regularly and in writing to all beneficiaries at once.

Keep estate funds entirely separate.

Document every decision and its reasoning contemporaneously.

Engage professionals and follow their advice, which is a strong defence.

Seek court approval for contentious decisions, which converts judgement into an order.

Obtain written receipts and releases on distribution.

And where the role has become untenable, resign rather than continue badly.

The final accounting

The mechanism that closes the matter.

A formal accounting approved by the court, or a written release signed by all beneficiaries, generally discharges the executor from further liability.

Executors who distribute without obtaining either remain exposed indefinitely, which is an unnecessary risk after a job well done.

Bonds

A protection worth knowing about.

Courts may require an executor to post a bond, which is a form of insurance protecting beneficiaries against loss caused by misconduct.

Many wills waive the bond requirement, which saves cost and removes the protection.

Where an executor is being appointed in circumstances that give beneficiaries concern, the court can be asked to require one despite a waiver.

Where a loss has occurred and a bond is in place, a claim against the surety is generally faster and more likely to produce recovery than pursuing the executor personally.

General information only, not legal advice. Grounds and procedures vary by state — consult a qualified attorney.