When the estate funds are misused by the executor

On Behalf of | Apr 6, 2022 | Estate Planning, Trust And Probate Litigation

A person who is appointed to be the executor of an estate is given unlimited access to another person’s assets. These assets include funds that are needed to administer an estate in California. The executor is a chosen individual who is put in a high position of trust, so there are rules in case there is a misuse of funds by the executor.

An executor’s rights and restrictions

The executor is only allowed to use the estate’s assets for the purpose of preserving the estate, which includes paying bills to creditors and covering the expenses for repairs and maintenance. The executor is not allowed to use the assets for personal gain or to defend a legal claim that excludes the estate’s owner and the beneficiaries. Assets cannot be used to provide for the sole benefit of the executor without regard to the entire estate.

Consequences for a breach of fiduciary duty

An executor who misuses funds has committed a breach of fiduciary duty based on the basic rules of trust and estate litigation. A beneficiary of the estate can then file a claim. If the case is won, the executor could be ordered by the court to return the misused funds and resign from the position as the executor.

Preventing the misuse of funds

There are serious legal consequences that come with managing an estate improperly. An executor can be easily relieved of his or her estate administration duties after misusing assets. This misuse could be as simple as allowing guests to stay in the estate. If you are an executor, avoid problems by reviewing the terms under which you must operate and follow the instructions exactly.