Is an Executor Personally
Liable for His/Her Actions?
Being an executor is often a demanding and thankless
job. I don’t think I’ve ever heard an
executor say, “Wow! I’m so glad I got to
do this!” In addition to mourning the
loss of a loved one, executors face the sometimes-daunting challenge of finding
and proving the will, gathering and valuing property, paying bills and staying
on top of financial obligations. On top
of that, an executor can, in some circumstances, be personally liable for his/her
Because executors are placed in a position of trust they are
held to the highest standard of care.
As such, if they breach that duty of care, they may be held personally
liable for the damage that comes as a result of violating that trust. This is why it is absolutely critical for an
executor to be beyond reproach in his/her dealings with the estate.
Executors who show favoritism to beneficiaries, handle
assets irresponsibly, fail to properly value assets, or act self-servingly, are
breaching their fiduciary responsibility.
These folks are at risk of being held personally liable. If you
are acting as an executor, it is imperative that you make all your decisions in
connection with the estate as transparent as possible. And if you are uncertain about how to
proceed, contact an appropriate professional (lawyer, accountant, or tax
advisor) for guidance.
Here are some
examples of executor actions that could result in personal liability:
1) Allowing family members or others to move into the decedent's family home-- rent free.
2) Selling everything at a garage sale without properly valuing the items. For example-- don't assume grandma's old painting wasn't worth much. Selling it for a few dollars could end up costing her estate, and ultimately, you.
3) Leaving property where it is at risk of being stolen.
4) Giving items away because the deceased "would have wanted it that way."