In a perfect world, administering an estate should be a seamless process that runs efficiently from start to finish. Unfortunately, many people who are appointed as the executor of an estate have no experience with the process. Mistakes can arise during the probate process - some with little consequence, others that lead to profound probate disputes.
Executors have specific tasks and duties to attend to during the administration of an estate. Gathering assets, obtaining fair values, paying debts of the estate and distributing assets are among the most well-known duties. At any stage of the probate process, problems or mistakes can adversely impact the value of the estate or the rights of beneficiaries or heirs.
No list of problems could cover every potential issue, but some of the more common mistakes recognized by MarketWatch are discussed in this post.
Mishandling Estate Assets
The scope of an executor's authority is not always obvious to someone who is unfamiliar with the process. When real estate is included in an estate, many twists and turns can create legal problems for an executor. For instance, disputes over how to handle the real estate can create significant disputes. If a family member lives in the home, and another heir has inheritance rights to the property, the probate court may need to resolve the issue.
It may be clear that the property should be sold and the proceeds distributed among the heirs. However, if a real estate agent recommends improvements or repairs to market the property, disputes can arise over the executor's authority to use estate assets to accomplish the repairs or upgrades. Similarly, delaying a sale for too long a period can expose the executor to the risk of damage to the home.
Misusing Estate Assets For Personal Gain
Self-dealing or improperly commingling estate assets with personal assets can not only violate the rights of heirs to the estate, but these issues can create animosity and resentment among family members. Whether an executor has intentionally misused assets or commingled an asset with personal assets, the misconduct or oversight may be the basis for a breach of fiduciary duty claim.
Using Estate Assets For New Investments
In general, an executor does not have a duty to increase the value of assets of the estate. It may be tempting, however, for an executor to invest assets during the probate process. The risk of loss resulting from new investments may lead to disputes.
Paying Bills Or Making Select Distributions Too Early
Paying the debts of the estate in a timely manner often causes confusing for executors. As bills arrive during the probate process, the temptation to take care of the debt immediately can unfairly deplete assets for other classes that may be entitled to payment before the creditor. There are a variety of priorities for how debts should be paid and assets distributed, and paying a bill before other classes that have a higher priority can result in a claim for breach of duty.
If you have questions about how an executor is handing an estate, your inheritance rights may be at stake. It is important for you to speak with a probate litigation attorney promptly if an executor is unfairly depleting an estate to your detriment.