Situations where executors can be sued

On Behalf of | Feb 24, 2023 | Executor Or Conservator

When a California resident passes away, the person they appoint to be the executor of their estate is tasked with completing several important tasks. Executors are responsible for submitting the decedent’s last will and testament to the probate court, settling the estate’s debts and tax obligations and ensuring that the decedent’s assets are distributed in accordance with their wishes. When executors are negligent or make mistakes, they can be held responsible in court. Executors are sometimes sued by creditors that are owed money by the estate, but most of the lawsuits they face are brought by heirs who are unhappy with their performance.

Lawsuits filed by creditors

An estate’s debts are only paid after they have been prioritized. Unpaid taxes, legal fees and burial costs are paid before secured debts like mortgages and automobile loans, and unsecured debts like credit card balances are paid last. If an executor pays a low-priority debt too soon and there is not enough money left to pay a more important debt, they can be sued personally by the creditor that should have been paid. However, the damages awarded in these executor lawsuits cannot exceed the value of the estate.

Lawsuits filed by beneficiaries

Executors have a fiduciary relationship to the estate’s beneficiaries, which means they are expected to perform their duties diligently and in good faith. An executor can fail to meet their fiduciary duty by mishandling estate assets, investing estate funds unwisely or failing to meet deadlines during the probate process. When this happens, beneficiaries can initiate probate litigation. However, all of the estate’s beneficiaries must be in agreement before a breach of fiduciary trust lawsuit can proceed. If they are, and they have sufficient evidence to support their allegations, the court could replace the executor and hold them personally responsible for the injury, loss or damage they caused.

Important duties

Executors have important duties, and not every person has the skills or aptitude needed to discharge them. When executors fail to meet their responsibilities, they can be held personally responsible for their negligence or mistakes in lawsuits filed by the estate’s creditors or beneficiaries. Estate litigation is usually contentious and expensive, which is why it is always wise to think carefully before naming an executor.