If an executor has been appointed to take charge of an estate you stand to inherit from, you may have concerns about how much authority they have. You may be wondering: Can an executor decide who gets what?
Suppose there is an ambiguity in a will that could be interpreted in a couple of ways. Reading it one way would result in you inheriting a house with your siblings. Reading it another way would result in only you inheriting the house. In this scenario, can an executor of a will decide who gets what?
Or suppose that a will directs for an income-producing rental property to be distributed in equal shares to you and your siblings. The executor informs you that dividing the property in this way would not be feasible since the rental units are not identical, so he buys the property himself and distributes the proceeds from the sale to you and your siblings. In this scenario, can an executor transfer property to himself?
Or, suppose estate administration began over a year ago, but the executor is not communicating with beneficiaries about where she is in the process. Beneficiaries have sent multiple requests to the executor for information, but to no avail. They now fear the executor could have run off with all the assets. Can the executor of a will take everything without facing any consequences?
Or, what if there is no will? Can an executor decide who gets what without a will? Does the executor have the final say?
If you have lost a loved one, what happens to their assets is probably very important to you. You not only want to receive the inheritance you were left by them, but you also want to see their final intentions being fulfilled. The person who can ensure this happens is the executor, but what if you don’t trust them?
It’s natural to feel uneasy about an executor presiding over your loved one’s assets, but remembering they are bound by certain rules will go a long way in quelling your worries. While executors do occasionally break rules, they typically pay handsomely for doing so. In other words, the penalties for engaging in fiduciary misconduct are severe enough to be strong deterrents.
That said, it’s important to be aware of which actions by an executor are appropriate and which ones aren’t so you can nip executor problems with beneficiaries in the bud should any arise. If you believe an executor may be acting inappropriately, it’s crucial you share your concerns with a knowledgeable probate attorney, who may be able to further investigate the matter on your behalf, and if necessary, sue the executor.
Who Is the Personal Representative?
The court appoints a personal representative (i.e., executor/administrator) to oversee the decedent’s estate during the probate process. The personal representative cannot access the decedent’s assets or take any actions on behalf of the estate until they are formally appointed to the role.
During probate, the personal representative is tasked with inventorying the decedent’s assets, paying their creditors and distributing their assets, among other things. They are bound by their fiduciary duties. That is to say, they must solely represent the best interests of the beneficiaries or heirs when making estate-related decisions.
Executor of the Estate
Who is the executor of the estate? Is the spouse automatically executor?
When someone dies with a will, the court generally appoints an executor to carry out the terms of their will and spearhead estate administration.
While the executor can be the decedent’s spouse or another close relation of the decedent, it can theoretically be any adult. But it’s important to remember that while decedents have the option to nominate an executor in their will, it’s the court who has the final say about who is appointed to serve.
That said, the court must defer to the decedent’s choice of executor unless the nominee is unqualified, unfit, or unwilling to serve, or is successfully disputed by interested parties.
Adminstrator of the Estate
Who is the administrator of the estate? Do certain parties have priority to serve?
When someone dies without a will, the court appoints an administrator to spearhead estate administration and distribute the decedent’s assets according to the laws of intestate succession (which can be found in Keystone’s intestate succession chart).
While the duties of an administrator are largely the same as the duties of an executor, the rules for becoming administrator are slightly different, in that one’s order of priority to serve will be determined by California Probate Code section 8461.
If a decedent left behind a surviving spouse, they will have priority to serve. Next in line to serve will be the decedent’s children, grandchildren, parents and so forth.
Executor’s Powers and Limitations in Deciding Who Gets What
On the one hand, personal representatives must be granted certain powers to effectively administer decedents’ estates. On the other, their powers must be limited to curb the potential for misconduct. Needless to say, it can be confusing for beneficiaries to differentiate between what a personal representative is and is not allowed to do.
Luckily, we’re going to simplify things for you: Personal representatives rarely, if ever, have the right to decide who gets what from a decedent’s estate.
If an executor is claiming they have the right to make such a decision, you should consult with a probate attorney as soon as you can to find out whether the decedent’s will has actually conferred them with this level of authority.
We go into the specifics of when an executor can decide who gets what and when they can’t in the following subsections.
Does an Executor Have to Follow the Will?
If a will has been authenticated by the court, the executor is responsible for following the will to a T. There is, however, an exception to this rule.
Suppose the executor believes the decedent’s will to be a product of undue influence on account of its terms being different from the terms the decedent had previously discussed with him. As a result, the executor plans to distribute the decedent's estate according to what he believes were the decedent’s final intentions. Can an executor ignore a will in this situation?
Technically, the answer is “no”, because while the executor cannot ignore the will, they do have standing to contest the will. By contesting the will, the executor would be asking the court to invalidate the document at issue.
In the above example, if the executor were to contest the will and win, it would result in the most recent will being voided and a prior version of the decedent’s will (if one exists) being submitted to probate. If there is no prior valid will, the executor would need to defer to intestate succession laws to determine who gets what.
Remember, to contest a will, it’s necessary to prove one or more of the grounds for contesting a will apply. While executors generally can contest wills, though they should be careful about bringing a contest if their involvement in the matter could be perceived by interested parties as a violation of their duty of impartiality. Beneficiaries, beneficiaries under prior wills and heirs also generally have standing to bring a contest.
There are strict deadlines for contesting a will, so if you are seeking to potentially bring a contest, it is important that you not delay consulting with a trust and will dispute attorney about the merits of your case.
Can an Executor Interpret Ambiguities in a Will?
An executor could take it upon themselves to interpret ambiguities in a will, but doing so would not be advised, as it could land them in hot water with the beneficiaries. Let us illustrate with an example.
Suppose a decedent’s will reads: “I give my residence and bank accounts to my ex-spouse.” On the face, this term in the decedent’s will would not be problematic, but in this case, the decedent had more than one ex-spouse, which presents a quandary for the executor. It’s obvious to the executor that the decedent had intended their home and bank accounts to pass to the most recent ex-spouse with whom they had a minor child, so she is considering moving forward with distributing the assets to this recent ex-spouse.
Unfortunately, this would not be wise for the executor to do, because the previous ex-spouse could accuse the executor of favoring the most recent ex-spouse over her, which would be a violation of the executor’s duty of impartiality. A better route for the executor to consider would be to discuss the matter with both of the ex-spouses. If an agreement can’t be reached through that approach, the executor could always file what is known as a Petition for Instructions with the court. This option would leave it up to the court to try to accurately interpret the ambiguity.
By utilizing one of the suggestions mentioned above, executors can rest assured they won’t be accused of impartiality, which hopefully would enable them to remain in good standing with the beneficiaries.
Can an Executor Remove a Beneficiary?
An executor cannot remove a beneficiary from a will, no matter how burdensome or irritating a beneficiary may be. That said, the court could potentially issue an order for a beneficiary to be disinherited (e.g., if it’s successfully proven that they stole from the estate), which the executor must heed, but this would not be the same as their removing a beneficiary.
The reason why an executor can’t remove a beneficiary is simple. While a will generally is revocable during the lifetime of the will creator (called the testator), it automatically becomes irrevocable once the testator dies. When a will becomes irrevocable, not only does revoking a will become impossible, but so does changing the will in any way. In other words, the will becomes set in stone, and by extension, the beneficiaries do as well.
Can an Executor Withhold Distributions From Beneficiaries?
While successor trustees generally have some leeway when it comes to withholding trust fund distributions from beneficiaries, executors generally have none. That is to say, once creditor claims, probate fees and other administration-related expenses have been paid, the executor must distribute all remaining estate assets to beneficiaries within a reasonable timeframe.
There are some circumstances under which different rules could apply. For example, the will could authorize the executor to temporarily withhold a distribution from a beneficiary (e.g., if they have a substance abuse issue or severe mental illness), though this would be unusual. Another scenario in which an executor would be authorized to withhold a beneficiary’s distribution would be if the beneficiary were a minor. In such an instance, the executor would either need to place the minor’s distribution in a trust or custodial account or provide it to their guardian of the estate (if they have one) who could hold on to it for them until they turn 18.
It’s worth noting that when an estate has substantial debts, beneficiaries may not receive the full inheritance they were left or any inheritance at all, since the executor generally must satisfy all valid debts before making any payments to them. This, however, is not the same as the executor withholding an inheritance.
Can an Executor Sell Property?
Executors generally can sell property, but whether they can sell property without first consulting the court will come down to the terms of the will and the level of authority they’ve been granted.
If a will grants an executor the authority to sell property, then they have the power to do so. But even if the executor has the authority to sell a parcel of real property, the steps required to do so will depend on whether the court has granted the executor full authority or limited authority under the Independent Administration of Estates Act of California.
If the court has granted the executor full authority, they generally can proceed with selling property without obtaining consent from the beneficiaries or court first, but they will still need to provide beneficiaries with a Notice of Proposed Action, the details for which can be found in California Probate Code sections 10580 - 10592. If any beneficiaries object to the Notice of Proposed Action, the executor will need to petition the court for approval of the proposed sale.
If the court has granted the executor limited authority, they will need to file a petition with the court to have sales involving real properties approved in advance of them being finalized.
In general, executors should always try to sell real properties for fair market value or higher. In order to do so, it is customary for the executor to retain the services of a licensed real estate agent to assist in listing and marketing the property for sale to solicit as many offers as possible on the property.
Can an Executor Transfer Property to Himself or Herself?
If the executor is also a beneficiary (which is common for executors), they not only would be justified in transferring property to themselves, but it would be their job to do so. It, however, should go without saying that an executor can only transfer to themselves the property they were left in the will or are inheriting by intestate succession.
It may also be possible for the executor to transfer property to themselves if they purchased the property from the estate, although an executor purchasing property from an estate poses an ethical dilemma, so it should be avoided whenever possible.
Can the Executor of a Will Take Everything?
The executor of a will can take everything only if they are the sole beneficiary of a decedent’s estate and all of the decedent’s debts have been paid.
If an executor who is not the sole beneficiary of an estate were to run off with all the decedent’s assets, they not only could be held personally liable for their misconduct in the probate court, but they could be criminally charged for theft as well.
Can an Executor of a Will Receive Anything?
What is an executor of a will entitled to? If the executor of a will is also a beneficiary, they are entitled to provide themselves with the inheritance the decedent left them at the close of administration. In other words, there is nothing in the law that prohibits an executor from also being a beneficiary.
While there are some potential conflicts of interests when an executor is also a beneficiary, that doesn’t mean they can’t be fair and ethical when performing their duties. For example, if they were to provide themselves with their inheritance at the same time they are providing other beneficiaries with their inheritances, there would be nothing wrong with that; however, if they were to provide themselves with their inheritance early, that could be seen as a red flag.
Even if the executor is not a beneficiary, chances are they will be walking away with a portion of estate assets nonetheless, as they generally have a right to collect fees for the time and effort they dedicated to managing the estate.
Can an Executor Decide Who Gets What Without a Will?
When there is no will, the estate will have an administrator presiding over it. And while the administrator won’t be bound to the terms of a will, they will be bound to the laws of intestate succession, which are extremely rigid and leave almost no room for interpretation.
As you may have guessed, there aren’t any beneficiaries without a will, so who inherits? The answer would be the decedent’s heirs, who may consist of their surviving spouse, children, grandchildren, parents, siblings, and nieces and nephews, among others.
To put it simply, even when there is no will, the administrator does not have the authority to decide who gets what. What’s more, administrators cannot even bring contests, since intestate succession laws remain firm regardless of the situation. Only in rare circumstances could an heir be disinherited. For example, the court may render an heir ineligible to inherit if it comes to light they subjected the decedent to elder financial abuse.
What Happens if an Executor Doesn’t Follow the Will?
If an executor can remember only one rule, it should be to follow the will as closely as possible. Executors not following a will is a surefire way for them to make themselves the subject of an executor misconduct claim, which could come with severe consequences if successfully proven.
Executors should remember that even if they have failed to provide beneficiaries with a copy of the will, beneficiaries can secure a copy from the county clerk’s office. In other words, whether an executor’s straying from the terms of a will is intentional or unintentional, they are likely to be found out.
If you are an executor who isn’t confident in your ability to adhere to the terms of a will, know that a probate attorney can be a great resource. They can handle all the tedious responsibilities of your role, so you can focus on the bigger picture.
That said, it is important to be aware of the consequences that could result from violating your fiduciary duty to abide by the terms of the decedent’s will.
Suspension or Removal
When an executor doesn’t follow the will, it can cast doubt on their ability to accurately perform the other duties of their role, such as estate accounting and paying the decedent’s debts. Therefore, it would be understandable if beneficiaries wish to take steps to protect the estate from an executor who lacks diligence or ethics.
One of the primary ways beneficiaries can protect the estate from being harmed by an irresponsible executor who does not follow the will would be to file a petition to have them suspended or removed.
If the petition were to be granted by the court, either an alternate executor (if one was named in the will) or administrator could be appointed to serve in the prior executor’s place.
Surcharge
In some cases, suspension or removal is not enough to reverse the damage caused by an irresponsible executor who did not follow a will; a surcharge is needed as well.
For example, what if a will expressly forbade some of the decedent’s personal property from being sold, but the executor proceeded to sell it anyway? It may require considerable money and effort to recover said property, if it can be recovered at all. Therefore, surcharging the executor for their negligence would be an appropriate reaction.
It may also be possible for beneficiaries to recoup from the executor their attorney’s fees and costs.
Are you dealing with a bad executor? We can help.
If the executor of your loved one’s estate has taken it upon themselves to decide who gets what or is going beyond the bounds of their authority in some other way, it is crucial you work with a probate attorney to get to the bottom of what’s going on as soon as possible.
When bad executors are allowed to proceed with their activities unfettered, they can cause serious harm to the estate, as well as delay when beneficiaries are able to receive their inheritances.
The attorneys at Keystone are experienced in holding fiduciaries accountable for their misconduct. Request your free consultation today to learn how we can help.
