The role of an executor is a crucial one when it comes to settling an estate. Executors have a legal and ethical responsibility to carry out the deceased’s wishes. They manage estate assets and distribute property to beneficiaries. Unfortunately, there are cases where executors engage in misconduct, whether by accident or on purpose. In these cases, executors violate their fiduciary duties and cause harm to the estate’s funds and its beneficiaries. Let’s explore examples of executor misconduct, why it happens, and how to prevent it.
What is an Executor?
Dealing with the loss of a loved one can be difficult and emotional, but settling the estate is a legal action that aggrieved heirs must be patient about. One of the key players in the probate process is the executor.
A decedent’s estate last will and testament names an executor (also called a personal representative) to fulfill their wishes. The executor is responsible for:
- Managing assets for the estate’s beneficiaries,
- Paying any estate creditors, debts, or taxes owed
- Distributing the remaining property to the beneficiaries named in the will
It’s crucial when estate planning to choose someone capable and trustworthy as an executor. Their duties can be complex and time-consuming. The executor often appears in court to provide an accounting of their actions and decisions. When an executor breaches their duties to handle the decedent’s assets, they can be legally held liable.
If you see executor misconduct in estate handling, seek the guidance of an estate administration attorney to ensure an expedited process! And if you’re an executor who feels confused about your duties, an attorney can help you every step of the way!
What is Probate Court? How Does It Work in North Carolina?
Probate court is a specialized court in North Carolina that deals with settling estates. When someone passes away, their assets and property are generally distributed according to their will, if they have one. If there is no will, the probate court will distribute the assets according to state intestate laws.
The estate executor manages the estate and settles debts or liabilities. One of the first tasks of the executor is to file the will. They then file a petition for probate with the clerk of court within two months of the deceased’s death.
Next, the executor notifies the beneficiaries named in the will. However, the entire probate process can take anywhere from a few weeks to a few months. The length depends on how easily the executor can locate the beneficiaries.
The executor is also responsible for identifying and gathering the estate’s assets. This includes bank accounts, investments, real estate, and personal property. The executor identifies and values all assets. Then, the executor pays any debts and taxes the estate owes. This can take anywhere from several months to a year, depending on the complexity of the estate.
After the executor pays all debts, they can distribute the remaining assets to the beneficiaries. This can take several months, depending on the complicated distribution process.
Overall, settling an estate can take anywhere from six months to several years. The length depends on the complexity of the estate and any disputes that arise. It’s essential for an executor to carefully consider the decedent’s wishes. They mush handle the real property, estate money, and assets carefully.
Executor’s Fiduciary Duty When Handling Estate Assets
The executor of an estate has a fiduciary duty to act in the best interests of the estate and its beneficiaries. This means that the executor must manage the estate’s assets with prudence to avoid conflicts of interest.
The executor’s fiduciary duties include:
- Managing the estate assets: The executor is responsible for identifying, gathering, and managing all the estate account issues and assets. This includes bank accounts, investments, real estate, and personal property.
- Paying the debts and filing tax returns for the estate: The executor must pay all debts and taxes owed by the estate before distributing any money or any assets. These go to the beneficiaries and family members named in the will.
- Distributing assets to beneficiaries: Once all debts and taxes have been paid, the executor must distribute the remaining assets to the beneficiaries. Discovering problems, such as an executor withholding inheritance or even outright theft, can be a gut punch to beneficiaries!
- Avoiding conflicts of interest: The executor must avoid any conflicts of interest. These can arise in the management and distribution of the deceased person’s estate assets. The executor must act in good faith when handling the decedent’s asset portfolio.
- Providing an accounting: The executor must provide a detailed accounting of all transactions and distributions. They are legally responsible while administrating the deceased’s estate.
In an executor’s failure to fulfill their fiduciary duties, they can be held personally liable. Any losses or damages suffered by the estate or its beneficiaries can fall on their head. It’s important for the executor to work closely with an attorney specializing in probate law/ Working with an attorney ensures fulfilling their fiduciary duties per state law.
Next we’ll look at ten examples of executor misconduct and then find out how to prevent intentional or accidental problems with the settlement of an estate!
10 Examples of Executor Misconduct in North Carolina
Here are ten examples of how an executor may engage in misconduct in North Carolina:
- Misusing estate assets: An executor may use estate assets for their own personal gain, such as making unauthorized withdrawals from bank accounts or using estate funds to pay for personal expenses.
- Failing to distribute assets: An executor may withhold assets from beneficiaries or delay the distribution of assets for an unreasonable amount of time.
- Conflict of interest: An executor may have a personal interest that conflicts with the estate’s interests, such as selling property to a family member or business associate for less than market value.
- Neglecting to pay debts and taxes: An executor may fail to pay outstanding debts and taxes the estate owes, causing financial harm to the estate and its beneficiaries.
- Breach of fiduciary duty: An executor may fail to fulfill their duty to act in the best interests of the estate and its beneficiaries.
- Misrepresenting information: An executor or personal representative may provide false or misleading information regarding the estate’s status to beneficiaries or the court.
- Failing to provide an accounting: An executor may fail to provide an accurate and complete accounting of all transactions and distributions made during estate administration.
- Self-dealing: An executor may use their position to benefit themselves, such as using personal funds, purchasing estate property for their own personal use, or taking a higher commission than what is allowed by law.
- Improperly disposing of assets: An executor may sell or dispose of estate assets without following proper legal procedures or obtaining the necessary approvals.
- Negligent estate management of assets: An executor may fail to properly manage estate assets, resulting in losses to the estate and its beneficiaries.
It’s important to remember that these are just examples, and there may be other ways an executor can engage in misconduct. If you suspect an executor is engaging in misconduct, it’s important to seek legal advice as soon as possible to protect the interests of the estate and its beneficiaries.
Our Experienced Estate Administration Attorneys Can Help
At Cape Fear Law, our experienced team of estate administration attorneys is here to guide you through the estate administration processes with compassion and solutions. As an executor, we can ensure you handle all of your duties with care and proper legal processes. If you are a beneficiary concerned about an executor’s behavior, we can help you work through the issues involved through negotiation or even litigation if necessary.
We are committed to providing personalized and attentive service to our clients, and we can help executors and beneficiaries alike navigate the legal complexities of estate settlement. Get in touch today to schedule a consultation.