An executor oversees estate administration. They initiate probate proceedings, manage estate resources and make appropriate distributions to beneficiaries. Serving as an executor places many demands on an individual. They are subject to certain legal obligations, including a fiduciary duty.
A fiduciary duty is the highest degree of personal obligation enforced under domestic laws. One party with a fiduciary duty to another must put the best interests of the other party first, rather than prioritizing their own wishes. The fiduciary duty of an executor can have a profound impact on estate administration.
Resource preservation is critical
The fiduciary duty of an executor means that they should prioritize the beneficiaries above their own wishes and interests. Typically, fulfilling that duty requires the competent and ethical management of estate resources. Personal representatives should try to at least preserve the value of estate assets. For example, if they sell assets, they should seek a fair market value for them if at all possible. They should act to protect the best interests of the beneficiaries.
Breaches can lead to litigation
Some executors breach their fiduciary duty through misconduct. They embezzle or engage in self-dealing. Others may breach their duty due to incompetence. They simply cannot fulfill their obligations effectively. In cases where beneficiaries can show that a breach of the fiduciary duty occurred, they may have grounds to ask the courts to remove an executor or hold them accountable for the financial impact of their failure to fulfill their duty.
Learning more about the rules that govern estate administration can be beneficial for executors, beneficiaries and other interested parties. Legal action is sometimes necessary in cases where people do not follow the law and fulfill their obligations.