Question: My uncle is the executor of my grandfather’s Will. He is supposed to sell my grandfather’s house and land and split it between the beneficiaries named in the Will, including himself. He says that he doesn’t have to sell it because he transferred the land and home into his name and labeled it as a ‘gift’ on the deed. Is he allowed to do that?
Loraine’s Answer: An executor must follow the Will exactly how it is written. If the Will specifically requires that the house and land be sold from the estate and split the net proceeds in a certain way, then the executor has a fiduciary obligation to follow those instructions. He absolutely cannot just decide to keep the property for himself; that would be a breach of his fiduciary duty.
However, if the Will says that the net assets in the estate must be divided between beneficiaries of whom the executor is one, and if there are other assets in the estate that can be used to make up shares of the appropriate value for each of the other beneficiaries, then the executor may be able to allocate the property to his share and keep it for himself. He also might be able to purchase the property from the estate, but he’ll have to do so very carefully and make sure he does not give himself any special discount or deal that he would not give to a stranger.
If the executor says that the property was given to him as a gift by the decedent, then the deed would need to back up the executor’s claim. For example, if the deed was executed by the decedent well before his death and recorded with the appropriate county Superior Court immediately after it was executed, then this is evidence that may support the executor’s claim that the property was transferred to him before the decedent’s death and that the Will therefore has no effect on the property. Whether or not that claim is true would need to be investigated. If the executor was not supposed to be the sole beneficiary of that land and he did not properly carry out a sale to himself for which he paid the estate fair value, then he’s breaching his duty as the executor, and the other beneficiaries should try to have him removed.
A LOT depends on exactly how the Will is written. An estate attorney needs to review the Will and understand what it requires or permits. You have the right to hire an attorney to represent your interest as a beneficiary to an estate. You should consider doing so if you’re unsure the executor is carrying out his job appropriately. You should also be prepared to seek the removal of the executor as soon as possible if it really looks like he’s not doing what he’s supposed to do.
Key Estate Planning Takeaway: If an executor is not following the terms of the Will, or if the executor is making claims about what is or is not in the estate, then the beneficiaries (or other beneficiaries, if the executor is also a beneficiary) can try to force the executor to provide information about what assets are part of the estate and what has been done. They can also try to force the executor to carry out the terms of the Will property, and, if he remains uncompliant, they can try to have the executor removed and to make him repay the estate for any damages he has caused or property that he has stolen. The other beneficiaries need to hire at least one estate litigation attorney to help them with that.
This “Q&A with Loraine” blog series is inspired by answers from Morgan + DiSalvo Partner Loraine DiSalvo to actual user questions posted by individuals on www.avvo.com. This blog is a more in-depth response than can be given on their site under their character limits for answers. To view the original question and Loraine’s original response, click here.
