Jun 02, 2023
Trustee Compensation in California: A Full Guide
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Estate executors and beneficiaries have a very special and important relationship. An executor is mandated to act in the best interest of the estate and the beneficiaries, but because of the complicated and bureaucratic nature of their role, lines of communication can sometimes get jumbled. Some of the most frustrating reasons for a prolonged probate are will disputes or requests from the beneficiaries to remove the executor.
In order to avoid this, it’s important for executors and beneficiaries to communicate clearly and transparently. Executors should keep beneficiaries informed about the probate process, timelines, and potential delays, while beneficiaries should give executors the benefit of the doubt and try to understand that they’re just doing their job. However, there are some rules and exceptions that all parties should be aware of, including what an executor is and isn’t allowed to do.
An executor can temporarily withhold money from a beneficiary under certain circumstances. If the beneficiary insists on receiving their inheritance but the estate hasn’t been closed yet and debts still need to be paid off, then the executor has the right to withhold the beneficiary’s inheritance until all debts and taxes have been paid.
Once all loose ends have been tied up, an executor must follow the instructions of the will. This means that the executor cannot withhold whatever assets have been given to the beneficiary in the will. On the other hand, if the beneficiary wants a certain amount that hasn’t been allocated to them in the will, the executor has the right—and the obligation—to refuse. So let’s say a deceased’s will allots a nephew $5,000, but the nephew insists on getting the deceased’s car as well. If the will doesn’t explicitly bequeath the car to the nephew, then the executor must refuse this request.
It’s also important to point out that the executor can only distribute what’s left of the estate. So if the estate had a lot of debt that needed to be paid off, then what’s left for the inheritance may actually be less than what was allocated in the will. So if someone was set to inherit $50,000 but the estate only has $10,000 left after paying off all debt and taxes, then that’s all the executor can give them, because that’s all there is.
If a beneficiary believes that an executor is neglecting or mismanaging the estate or violating their fiduciary duties, then they can request that the executor be removed from their position. However, they cannot simply override an executor because they don’t like what the executor is doing, even if it’s part of their job.
Let’s say, for example, that an executor decides to sell a home in order to pay off the estate’s debt. The beneficiary, who maybe grew up in that home and attaches sentimental value to it, doesn’t agree with this strategy. If the executor is acting in the estate’s best interest by selling the house, then the beneficiary cannot override the executor.
Beneficiaries do have the right to demand that the executor be removed if they believe the executor is acting unethically or incompetently. In order to do this, they must file a petition with the probate court, which will then investigate whether the claims are legitimate.
An executor cannot override a will. Their entire job consists of honouring the terms of the will and carrying out its instructions. An executor cannot modify the will or change any of its listed beneficiaries or alter the distribution of the inheritance in any way. Any of these actions would constitute grounds for removing the executor of their position.
There are very, very few exceptions where an executor may override a will, and this is only possible if the will states something that is impossible to carry out or if current circumstances don’t reflect the conditions that were present when the will was written. So if the will instructs the executor to give the family house to the surviving child, but the house was sold during the deceased’s lifetime and the will wasn’t updated before the death, then the executor can petition for a variation of trust on the grounds that the terms of the will are unclear or can’t be carried out. However, this is not an ideal situation.
As a beneficiary, you do have the right to request the removal of an executor if you believe they’re not performing their duties. You’ll have to petition the court and show evidence of mismanagement. The executor selling a property for way below market value to a friend, or transferring estate property to their name during the probate process, would all be valid grounds for challenging an executor.
A beneficiary cannot, however, override an executor simply because they don’t like their actions, although they correspond to the instructions in a will. So if you’re upset with the executor because you believe you’re entitled to a bigger inheritance than what’s set forth in the will, then you don’t have any legal grounds for challenging them.
As mentioned before, removing an executor is possible if they’re not fulfilling their duties. However, it’s a step that should be considered carefully and be a last resort, since petitioning for removal will delay the probate process, cost money, and push back the distribution of the inheritance.
Before filing a petition to remove the executor and potentially taking legal action, it’s worth trying to talk with the executor in order to see whether the conflict is due to simple miscommunication and misunderstood expectations. However, if talking cannot resolve the problem, then you are within your right to petition the court to remove the executor.
Since an executor’s duties are so clearly established, it’s also pretty clear to identify when an executor isn’t complying with their duties and can be removed from their position. A court would approve the removal of an executor for the following reasons:
Gross misconduct. If an executor is using estate funds to pay for personal expenses, such as their own credit card debt, or their rent or holidays, then this is considered gross misconduct and calls for the immediate dismissal of the executor.
Failure to carry out executor duties. If an executor does not comply with their duties, such as applying for probate, submitting tax returns, and paying off creditors, then they may be removed.
Mismanagement of assets. An executor has the responsibility to care for the assets belonging to the estate while the estate is being settled. So if an executor doesn’t keep up with a home’s mortgage payment, allows it to fall into disrepair, or doesn’t keep it safe, then beneficiaries could successfully argue for the executor’s removal.
Conflict of interest. Let’s say an executor sells an estate’s real estate to themselves under market price, or the estate owes an executor money. These would be considered conflicts of interest and constitute grounds for removal.
As you can see, the executor-beneficiary dynamic isn’t always seamless. But at ClearEstate, we believe that harmony is possible. We promote transparent communication between beneficiaries and executors and ensure that all parties are empowered and aware of their rights. Curious? Get in touch with us for a free consultation to learn more.
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