woman speaking to an advisor regarding probate

When Should I Be Worried About How a Personal Representative (Executor) Is Handling an Estate?

After the death of an individual, their estate must be administered through the probate courts. During this process, the designated personal representative (as it's called in Colorado) or executor (as it is called in many other states) will act as the estate administrator and have specific legal and fiduciary duties, both to the estate and also the individual’s heirs, beneficiaries and interested parties. This means that the personal representative is legally responsible for acting in the estate’s best interests and not his or her own self-interest.

Undertaking the duties of a personal representative is not always an easy job, and most people have no experience or training in managing an estate's assets or the probate process before being appointed to do it. Therefore, mistakes by personal representatives are common, and not always intentionally malicious. Many problems and disputes can be resolved with good communication and solid legal guidance and advice.

Still, whether an act of fraud or a misunderstanding, when a personal representative or trustee mismanages or steals assets of the estate, it is a breach of their fiduciary duties, and there can be legal consequences. The family members or other interested parties may choose to file a civil lawsuit against that individual or, in particularly egregious instances, they may even decide to bring criminal charges. Regardless of the penalties, beneficiaries should take action as soon as possible when they suspect wrongdoing by an executor.

Duties of the Personal Representative

A personal representative/executor has extensive duties and responsibilities when it comes to the administration of an estate. These include:

  • Submission to the probate court
  • Establishing bank accounts for the estate
  • Locating and maintaining an inventory of all assets of the estate
  • Appraising assets of the estate
  • Notifying all creditors of the death of the individual
  • Paying all debts to creditors
  • Keeping accurate records of income and expenses
  • Distributing assets in accordance with the will

But, regardless of the considerable responsibilities, assets belong to the estate and beneficiaries, not the executor. He or she is merely a representative for the estate to ensure that it is appropriately administered. Unfortunately, some executors take advantage of that role of responsibility and mismanage and even steal from the estate.

When family members feel that property or assets are missing from a deceased loved one’s home or estate, or suspect that funds have been stolen from the estate’s bank account, it is critical to take immediate action. The longer they wait, the less likelihood they will have of recovering stolen assets. With the assistance of a probate litigation attorney, if beneficiaries find that the executor has taken or mismanaged assets from the estate, that person may face serious legal consequences.

The Liability of an Executor

The executor of the estate will be liable to the beneficiaries for any losses to the estate or gains that should have been realized but were not. These can include

  • Failure to take reasonable care in the management of the estate
  • Stealing funds or misappropriation of assets
  • Failure to follow the direction of the will
  • Failure to pay debts, taxes, and other expenses of the estate
  • Withholding inheritance

When an executor is negligent or intentionally harmful in his or her responsibilities, it is a breach of their fiduciary duty as a personal representative. While executors may have many excuses for their behavior, they can still be held accountable for their actions.

The Legal Rights of the Beneficiary

While beneficiaries don’t have much control over the administration of the estate, they do have legal rights under probate laws to ensure that it is done properly. They have the right to see the actual will, be notified of any probate actions, get information about asset valuation and the amount of debt, and to get a full accounting in writing by the executor, with supporting documentation. This can include property inventory lists, appraisals, sales contracts, and other documentation.

What Can Be Done if You Have Found that Assets Are Missing?

If something seems awry, the beneficiaries should act quickly to avoid further theft or mismanagement and contact an experienced probate attorney to advise them of their rights and options.

When beneficiaries have reason to believe that the executor or personal representative of the estate is not fulfilling his or her duties, or there are suspicions of theft or other misconduct, they can petition the court. They can request that the estate administrator be removed and restrictions placed against the estate’s bank accounts to prohibit any further ability for the executor to withdraw funds. At that time, the probate court will order that the executor provide a full inventory of assets, an accounting of anything that had been done to date, and all supporting documents and evidence.

Stealing is only one way that there may have been misconduct by an executor. If the court finds misconduct, that executor will be removed and the court will name another party. In the case where misconduct has been found, beneficiaries have the right to pursue a civil lawsuit against the executor and may even choose to file criminal charges. An experienced estate litigation attorney will assist with this.

What Are the Civil Penalties For Stealing From an Estate?

When beneficiaries choose civil litigation against the executor, they may ask for specific remedies. These can include

  • Surcharge -- A surcharge can be imposed when the executor fails to properly manage assets in the estate, object to creditor claims or money paid to agents or employees, or mismanages a business operated by the estate. When the executor is one of the benefactors, his or her portion of the estate may be charged with that surcharge.
  • Discovery and turnover -- A discovery and turnover proceeding will force an executor to return property that was wrongfully taken.
  • Discharge of the executor -- The judge can discharge and replace the executor.
  • Attorneys’ fees -- Executors can use funds from the estate for their won defense. If the executor has been found liable for misconduct, the court will order him or her to reimburse the estate for their costs and even sometimes the costs of the beneficiaries.

Are There Criminal Penalties For Stealing From an Estate?

Most estate mismanagement matters are dealt with in civil court. The court will remove an executor and order repayment of assets in addition to damages to the beneficiaries. But criminal charges can be brought in some cases.

The estate is the owner of all assets and property. When an executor steals from an estate, he or she is committing larceny. In criminal law, larceny is defined as the felonious taking of money or personal property of another. Someone charged with larceny can face serious criminal consequences, including fines and even jail time.

How to File a Lawsuit to Recover Assets

When you have cause to believe that there has been misconduct in the handling of a loved one’s estate, it is critical to contact an experienced estate attorney who is experienced in probate litigation. A skilled attorney will be able to mitigate further loss to the estate and help you understand and pursue your legal options.

Contact the Colorado Springs probate attorneys Patterson Weaver Law, LLC for a free consultation to understand your legal rights as a beneficiary.