Being appointed as the Executor of a deceased person’s estate is often seen as a privilege. However, that golden glow of privilege fades fast as soon as an Executor realizes the litany of tasks that one faces in order to properly administer the estate, as well as the reality that he or she is the lightening rod by which the beneficiaries of the estate take out their frustrations and criticisms.
One extremely important but overlooked concept of being an Executor is that taking on that office also means taking on the risk of personal liability. In other words, being an Executor means putting one’s own personal assets on the line. Personal liability can result in contract and tort.
An Executor who makes contracts relating to an estate is personally liable to the contract, as long as the contract has no relation to some obligation of the testator. An Executor is also liable in tort law for negligence. Negligence by the Executor can make the Executor personally liable to any beneficiaries or creditors of the estate. Examples where Executors could be found negligent include, but are not limited to:
- improperly interpreting the terms of the Will;
- not properly following the terms of the Will;
- paying the wrong amounts to the wrong parties;
- making improper disbursements for creditor claims;
- improperly preferring one creditor over another;
- not prudently investing the estate assets;
- breaching the even hand rule;
- not properly protecting estate assets; for example, not changing locks on property or purchasing fire insurance or keeping a property in good repair;
- not selling assets in a timely way;
- unreasonably prosecuting or defending litigation on behalf of the estate;
- not prosecuting a claim against a third party in time;
- improper delegation of duties;
- failing to keep accurate records of the administration of the estate.
Given this, it is prudent to seek legal advice from counsel experienced in estate matters before agreeing to act as an Executor. It is also important to know that being named as an Executor in a Will does not obligate one to act as such; a person named as an Executor in a Will can renounce the right to act, provided that one has not intermeddled in the estate.