When a person passes away, an executor will step in to administer the estate of the decedent (deceased) and act on the estate’s behalf. Executors are often responsible for several tasks including:
- identify and manage estate assets
- File the will
- Pay debts
- File tax returns
- Use estate funds to pay expenses
- Distribute assets to beneficiaries and heirs
Executors have a great deal of responsibility, and with that comes a fiduciary duty to always act in the best interest of the estate and act in good faith. If an executor breaches their duties, they could potentially find themselves on the wrong end of a lawsuit.
Potential lawsuits against executor
Executors who do not uphold their responsibilities may face two types of lawsuits. The first type may be brought by a creditor of the estate, while the second type may be brought by beneficiaries of the estate.
- Creditor lawsuit: Executors are generally not liable for the personal debts of an estate. However, if the executor fails to pay creditors in the right order or fails to pay off debts before distributing the estate assets to the beneficiaries, the creditor can sue the executor personally for up to the value of the estate assets.
- Beneficiary lawsuit: Executors may be sued by beneficiaries for breaching their fiduciary duty, even if they do so unintentionally. Executors may be sued for failing to file tax returns on time, failing to distribute assets on time, engaging in self-dealing, making improper investments, or a conflict of interest.
It can be very difficult to be the executor of an estate, especially if you have no experience handling these matters. A probate and estate administration attorney can help you avoid these potential lawsuits by making sure you fulfill your obligations.