Somebody has to take charge of an estate when a testator dies — and that’s usually the executor that they named in their will. The executor is responsible for following the instructions left in the will and managing the settlement of an estate.
Every executor is bound by a fiduciary duty, which includes the responsibility to settle an estate according to both the law and the testator’s wishes. For example, the executor is responsible for collecting death certificates, settling unresolved financial matters, accessing financial accounts, contacting beneficiaries and distributing assets all in a timely manner. But these are just part of an executor’s fiduciary duties.
What duties must an executor fulfill to meet their fiduciary duty?
An executor’s fiduciary duties go beyond the responsibilities they must perform to settle an estate. The executor must also protect the interests of the estate and beneficiaries. These duties can include:
- Loyalty: An executor must put their own interests aside as they execute an estate and avoid any conflict of interest.
- Good faith: An executor must always act within the law.
- Confidentiality: An executor must keep any estate matters private.
- Prudence: An executor must make decisions that best interest the beneficiaries.
- Disclosure: An executor must be open and honest to beneficiaries.
Many of these duties can be fulfilled by keeping constant communication with beneficiaries, keeping accurate records of financial matters and learning more about probate laws.
How would an executor breach their fiduciary duty?
If an executor fails to fulfill their fiduciary duty, they could face serious legal issues. A breach of fiduciary duty could happen simply because an executor simply failed to promptly handle the necessary tasks. However, a breach of fiduciary duty can also happen because an executor is self-dealing, has lost property, has a conflict of interest or is committing criminal activities.
If it appears an executor is failing to meet their fiduciary duty and acting in their own interests, the beneficiaries may reach out for legal guidance to learn how to protect their inheritance. If a claim is successful, the probate court may remove the executor or hold them responsible for any losses.