An interested party may initiate litigation against the executor of an estate if they have reason to believe that the executor’s actions are harming the estate.
Beneficiaries, creditors, and other interested parties may object to certain executor actions. In addition to asking the court to stop or reverse an executor’s actions and order the executor to compensate the estate for losses, an objecting party may ask the court to remove and replace the executor. Exact reasons for removal vary by state law, but generally an executor may be removed if they do not comply with court orders, the law, or the will’s directives, misuse estate funds, mismanage estate assets and obligations, put their own interests ahead of the interests of the estate, or have a conflict of interest. In some states, an executor may also be removed if they are convicted of a felony or if a probate court finds that they are unfit to perform their duties.
Executor Litigation Consequences
If litigation against an executor is successful, the court may:
Void the executor’s actions
Remove and replace the executor
Order the executor to compensate the estate for its losses
Breach of Fiduciary Duty
An executor has a fiduciary duty to act in the best interest of the estate. An executor must not give preferential treatment to themselves or another party. An executor must also keep interested parties informed of the status of the estate and the probate process, remain honest, follow the will’s directives and court orders, diligently move the estate through the probate process, and competently manage the estate’s assets. If an executor breaches their fiduciary duty, they may face consequences such as removal from their position and an obligation to pay back any losses attributable to their actions.
Objections to Accountings
Accountings are financial documents prepared by the executor that outline an estate’s assets and debts. Beneficiaries, creditors, and other interested parties may be entitled to object to an accounting if they suspect that the accounting is inaccurate or misleading. They can ask the court to review and revise the accounting. Objections to accountings may also reveal the bad behavior of an executor, such as a breach of their fiduciary duty.
Executor Fee Disputes
Executors are entitled to charge an estate reasonable fees for their services. However, what constitutes a “reasonable” fee sometimes varies based on state law and factors such as the complexity of the estate and the time required to administer the estate. Evidence such as an executor’s special skills or their efficient and advantageous handling of the estate may help an executor overcome a fee dispute.
Choosing a New Executor
If the court removes an executor, it must appoint a new executor. Sometimes, a decedent’s will names an alternative or successor executor. Courts prefer to defer to the decedent’s wishes as expressed in their will. However, if the will does not name a successor executor, or if that individual is also unfit or unwilling to serve as an executor, an executor will be chosen according to state law. Usually, state law dictates a prioritized list of individuals who may serve as executors, and the probate judge will have some discretion to appoint an appropriate replacement.
Successor Executor Responsibilities
A new executor may have an obligation to pursue a former executor for any damages that the estate incurred because of their bad actions.