It’s not uncommon for a parent to pass away with a will that says her children will divide the estate equally, after all the debts are settled. It’s also not uncommon for one of the children—maybe the eldest—to be named the executor. This works just fine in most situations, where all of the siblings get along. Things are settled, and everyone moves on.
However, sometimes an executor can act with some (or a great deal of) self-interest, especially when it’s one of the siblings. That daughter may feel entitled to more than an equal share, because of the care she’s given the parent or for any number of reasons.
What if the eldest sister gets her siblings to sign away their rights to everything? Perhaps some do, but when one sibling says no, this evil executor gets the will probated anyways. Subsequently, the lone hold-out finds out there was a testamentary trust created because she didn't sign away her rights, and—you guessed it—the eldest sister is the trustee. That’s dirty pool!
When the hold-out beneficiary requested an accounting of the trust, the evil executor/trustee refused. When an executor or trustee tries to keep the deceased parent’s estate and trust a secret, it’s not appropriate or acceptable, and she’s breaching her fiduciary duty.
nj.com’s recent article, “Your rights when family fights over a will,” explains that executors and trustees serve in a fiduciary capacity. It means they have a legal obligation to act for another (the beneficiaries) in a fair, honest, and transparent manner. While executors and trustees have the legal authority to manage the affairs of an estate or trust, she’s accountable to the beneficiaries and must inform them of what she’s doing.
When a person dies, the executor must notify, in writing, all beneficiaries named in the will (and all heirs at law, like those entitled to inherit by intestacy) that a will has been probated. This must be done within a specific number of days of the will being probated. The executor must also provide a copy of the will with the notification of probate in California. After receiving the notice of probate, individuals may contest the will within a specific timeframe. Additionally, in California, when a trust becomes irrevocable due a person's death, the Trustee must give a copy of the trust and a notification regarding options to contest the trust within a specified period of time after the death.
When the will is reviewed, beneficiaries can see that a testamentary trust was created. Once appointed, an executor must settle and distribute the estate, as quickly and efficiently as possible. Both executors and trustees have a duty to collect and preserve assets, deal impartially with beneficiaries and act at all times with the best interests of the estate and trust in mind to be certain that the estate and trust are distributed, according to the decedent's wishes.
A fiduciary also has a duty to account to the beneficiaries. Therefore, in the event a beneficiary has questions about how an estate or trust is being handled, he can request an accounting and copies of supporting documents. Likewise, a trustee is required to keep beneficiaries reasonably informed about the administration of the trust and information necessary for the beneficiaries to protect their interests. The trustee must promptly respond to the beneficiary's request for information on the administration of a trust. If a fiduciary willfully neglects or refuses to render an accounting or breaches her fiduciary duties, you can ask the court to remove her as the executor or trustee.
Therefore, in our scenario, the evil elder sister must, if requested, provide an accounting. If that accounting shows any improprieties, the elder sister may be personally liable for misconduct, including the legal fees for bringing the action.
If this looks like a real situation you’re having, talk to an attorney experienced in probate litigation.
One of the main goals of our law practice is to help families like yours plan for the safe, successful transfer of wealth to the next generation. Call our office today to schedule a time for us to sit down and talk about your estate plan, where we can identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: nj.com (September 28, 2018) “Your rights when family fights over a will”