An executor is a person appointed in a will to manage the estate of a deceased person. They have a fiduciary duty to act in the best interests of the estate and its beneficiaries. However, conflicts of interest can arise when the executor is also a beneficiary of the estate. In this situation, the executor may be motivated to act in their own interests, rather than in the best interests of the other beneficiaries. Here are some examples of executor-beneficiary conflicts of interest and what happens when they arise:
- Self-Dealing: Self-dealing occurs when the executor uses their position to benefit themselves at the expense of the other beneficiaries. For example, the executor may sell estate assets to themselves or a related party at below market value, or they may charge excessive fees for their services as executor. When self-dealing occurs, the other beneficiaries can file a lawsuit against the executor for breach of fiduciary duty.
- Unequal Distribution: If the executor is also a beneficiary, they may be tempted to distribute assets unequally in their favor. For example, they may take a larger share of the estate or withhold assets from other beneficiaries. In this case, the other beneficiaries can challenge the distribution in court.
- Delaying Distribution: Executors have a duty to distribute the assets of the estate in a timely manner. However, if the executor is also a beneficiary, they may delay distribution in order to increase their share of the estate. When this happens, the other beneficiaries can petition the court to remove the executor and appoint a neutral third party to manage the estate.
When an executor-beneficiary conflict of interest arises, it can lead to disputes and legal action. In order to prevent conflicts of interest, it is recommended to choose a neutral third party to act as executor or to include a provision in the will that prohibits the executor from benefiting from the estate. If a conflict of interest does arise, it is important to consult with an experienced probate attorney for guidance. An attorney can help you navigate the legal process and protect your rights as a beneficiary.
Afraid your executor isn’t doing their job correct? We have helped heirs, beneficiaries and devisees get their rightful share; we can help you too! Our office is located at 1100 NASA Parkway, Ste. 420J, Houston, TX 77058. Call our office at 832.408.0505 and book your Legal Strategy Session today!