What Happens If an Executor Breaches Their Fiduciary Duty in California?
When someone passes away, the person they choose to carry out their wishes has an important job. As the executor, they are responsible for managing that person’s estate.
Under California law, this is known as their fiduciary duty. That means the executor must act in the best interests of the estate and its beneficiaries.
But what happens when an executor breaches their fiduciary duty in California? Here is what you need to know about what happens in these cases and the real problems it can create for everyone involved.
What Is Fiduciary Duty?
An executor’s (or personal representative) fiduciary duty does more than follow the deceased person’s instructions. These individuals must also act honestly, carefully, and in good faith.
They have agreed to:
- Avoid conflicts of interest
- Keep accurate records
- Make decisions that are fair to all beneficiaries
California law expects executors to put the estate’s interests ahead of their own. If they fail to do this, they could be held legally accountable.
What Are Some Examples of a Breach?
These breaches can take many forms. For example, an executor might:
- Mismanaging estate assets by selling property for less than fair value or making risky investments.
- Favoring one beneficiary’s interests over others.
- Keeping estate funds for themselves or using them for personal expenses.
- Failing to file necessary tax returns or pay debts.
Sometimes, an executor did not mean to cause harm. However, their failure to act responsibly can still count as a breach under the law.
What Are the Consequences of a Breach?
Breaches are serious issues. And under the law, there are a few possibilities of what could happen. This may include:
- Surcharge or financial liability: The court may order the executor to pay back money lost to the estate because of their actions.
- Removal as executor: If the executor is not acting appropriately, the court can remove them and appoint someone else to manage the estate.
- Civil lawsuits: Beneficiaries can bring a lawsuit against the executor to recover losses caused by mismanagement or misconduct.
- Criminal liability: In extreme cases of embezzlement or theft, the executor could face criminal charges.
In these cases, the court will look at whether the executor acted in good faith. Sometimes, the executor is not great at their fiduciary duties, especially if they have never handled an estate.
Honest mistakes are treated differently from deliberate misconduct or self-dealing. This is one reason why you want to choose an individual who has experience or is willing to dedicate time to these responsibilities.
How to Protect Yourself
If you suspect an executor is not fulfilling their duties, there are steps you can take. You can:
- Request that the executor makes regular updates on the estate’s progress.
- Specify clarification on questionable transactions or decisions.
- Petition the court to intervene if you believe the executor is breaching their duty.
Working with an attorney experienced in probate and estate law in California can assist with this process. They can help you understand your rights, guide you on next steps, and make sure the executor is held accountable for their actions.
Executors Have a Responsibility to Handle an Estate with Care
What happens when an executor breaches their fiduciary duty in California? These individuals have a serious responsibility to act in the best interests of the estate and its beneficiaries.
When they fail to do so, California law has remedies to protect the estate and those entitled to its assets. If you suspect mismanagement, you need to take action. With that, you can make sure the estate is managed the way it was intended.
At California Probate, we are here to assist with these aspects of estate management, especially when an executor doesn’t live up to their duties. Schedule a consultation with us today.