The process of monitoring an estate doesn’t end when an executor assumes their role and begins managing the estate. While many heirs and beneficiaries feel tempted to wait for the executor to handle everything, they should remain at least somewhat engaged in the process. Failing to do so could have serious consequences down the road.
For example, if the executor or administrator for a loved one’s estate isn’t doing their job properly, that could leave the estate with significantly diminished assets. This is particularly true when an executor decides to abuse their position of fiduciary duty for personal benefit.
If you believe that an executor is not acting in the best interest of the estate, but rather themselves, you can challenge them in court. However, you have to realize what they are doing in time to prevent catastrophic consequences for the estate. There are some red flags to watch for in an estate that could mean there are problems.
When it comes to handling an estate or a trust, there is no such thing as too much documentation. Given how legally complex the administration of an estate usually is, most successful executors maintain exhaustive and thorough financial records.
They do this so that they can prove they have complied with all the terms of the will or estate plan. The same documentation can show that they upheld their fiduciary duty and acted in the best interest of the estate.
Those who do not maintain adequate records may intentionally avoid documenting transactions they know to be questionable. If an executor cannot provide documentation or receipts, that could be a warning sign of impropriety.
Most estates are made up of a combination of non-physical assets, like bank accounts, and physical assets, such as real estate and jewelry. Both physical and financial assets may have substantial value. Therefore, there is financial incentive for a trustee or executor to keep some of these assets or attempt to transfer them to someone in a way that will profit them and not the estate.
Having a good idea of what physical and financial assets exist early in the estate administration process can help you determine what has gone missing. If the executor cannot account for missing assets, you may need to take legal action.
One of the most important things an executor has to do is fulfill the obligations of the testator. That usually includes paying a mortgage, paying Insurance, paying utilities and even arranging for the maintenance or sale of properties. When creditors don’t get the assets that they require to keep accounts in good standing, the end result can be negative for the assets of the estate.
Creditors can seek assets in a lawsuit. That is why you should take immediate action if the administrator of an estate has failed to handle the financial obligations and legal responsibilities of the testator.
Serving as the executor of an estate isn’t easy. Upholding the burden of fiduciary duty to an estate often requires careful planning, good legal counsel and excellent record-keeping. Selecting an executor is also hard, because people are often blind to the faults of those they love the most.
For those who believe that an executor or trustee is putting their own interest above the interests of the estate or trust, it may be necessary to challenge that individual in probate court.