Contending with the loss of a loved one in Kentucky or in any other part of the world is often a challenging time. Fortunately, a reliable and trustworthy executor can help families and friends after a loved one passes away. Whether named in a will by the decedent or appointed by a probate court, executors distribute assets to beneficiaries and settle taxes or debts. While an executor is typically safe from litigation, there are two situations in which a lawsuit can occur.
Creditors suing executors
Executors typically receive claims from creditors that detail what a decedent owes them. An executor collects this information, paying creditors in a certain order. However, whether intentionally or not, executors can make mistakes while settling these debts. An executor can end up paying creditors in the wrong order or paying beneficiaries before creditors, both of which can be grounds for a lawsuit against executors.
Beneficiaries suing an executor
Creditors aren’t the only parties capable of suing an executor. Beneficiaries can also take action in probate court.
Some people serving as executors can breach their duties by not filing a decedent’s tax returns, making bad investments or putting their interests over what’s best for beneficiaries. More serious executor-related offenses can involve theft and embezzling from a decedent’s account, such as using money from a deceased person’s estate to buy personal gifts. As shocking as these situations seem, they can happen. Beneficiaries have recourse to sue an executor if they breach their duties.
When you think of someone having fiduciary duties, you likely picture medical or financial professionals. However, an executor must also abide by fiduciary duties. While there’s no rule that executors must be estate planning experts, they must use good faith and honesty in this role.