When a loved one passes away with an estate plan, an executor is responsible for administering the estate. The executor has several important duties, including locating the will, contacting beneficiaries and distributing assets.
An executor of the estate has a fiduciary duty to always act in the best interests of the beneficiaries. If an executor breaches their fiduciary duty, it can create issues for beneficiaries. Here is what you should know:
What does a fiduciary duty mean?
An executor’s fiduciary duty refers to their legal obligations to always act in the best interest of the estate and its beneficiaries. In other words, an executor should fulfill their duties to the fullest degree without putting their own interests ahead of the estate. Some of the fiduciary duties of the executor include:
- Protecting the estate
- Paying debts and taxes
- Notifying beneficiaries
- Distributing assets to beneficiaries
- Keeping detailed records of the estate
The executor should keep beneficiaries updated throughout the estate administration process and handle any issues immediately.
How is a fiduciary duty breached?
An executor breaches their fiduciary duty when they act in their own interests instead of prioritizing the estate’s beneficiaries’ interests. There are a few common types of fiduciary breaches, including the following:
- Mismanaging assets
- Self-dealing
- Fraud or theft
- Poor record keeping
- Lack of communication
- Unnecessary delays in administration
A breach of fiduciary duty not only breaks the trust and loyalty to beneficiaries but also fails to fulfill the deceased’s last wishes.
What are the consequences of a breach of duty?
A breach of fiduciary duty can lead to serious consequences. An executor may be removed from their position, face lawsuits for financial loss and other penalties. Professional legal guidance can help address a breach of fiduciary duty.