The executor is the person entrusted with a deceased estate. They are charged with dealing with the deceased’s last wishes, winding up their financial affairs, and meeting the Will’s demands. The majority of people who fill the role of executor take it seriously and fulfil their duty diligently and with honesty. Sadly, some executors will take the opportunity to profit from this position of trust.
When an executor acts deceitfully to acquire assets for anyone who is not the rightful beneficiary it is classified as executor fraud.
Executor Fraud Defined
If an executor acts to benefit their gain, this is classed as executor fraud. Any type of fraud is a criminal act, and it is when someone obtains assets, money, or advantage through their unlawful actions. The most common reason executor fraud is discovered is due to a beneficiary being suspicious of the executor’s behaviour, whether it’s unhelpful or secretive.
Executor Fraud Examples
There are multiple opportunities for a bad actor executor to act fraudulently during the administration of the deceased estate. In certain instances, the courts have discovered executor fraud when an executor has paid themselves for unreasonable expenses or advances from the estate. Or, they have given themselves a salary for the role or used the deceased’s bank accounts as if it was theirs.
An executor may also go to the trouble of creating fake creditors so they can withdraw the money from the estate for themselves. It is fraud for an executor to take assets or to sell them under market value, whether to themselves or a family member or friend. Another instance of executor fraud is when the executor delays the administration because they are living on the deceased’s property.
Signs To Look Out For
· Uncooperative behaviour: If the executor acts belligerently then this is a cause for concern, especially if the executor is treating beneficiaries unfairly and behaving in a threatening way.
· Selling: If the executor is selling funds or assets from the estate, but there is no evidence of the proceeds going back into the estate, then this is a sure sign of potential fraud.
· Notice: If an executor hasn’t made an effort to notify beneficiaries (or even just one), it’s an indication there may be fraud occurring.
Accountability & Repercussions
An executor is charged with keeping accurate, up-to-date financial records of their administration of the estate. This ensures accountability and provides a paper trail to defend against executor fraud claims. When the estate administration is complete, the executor has to provide a financial activity summary that reflects the time from when the grant of probate was issued by the Supreme Court.
In addition to the estate’s initial inventory records, including the value of all assets, the executor must also track income and losses from a business, and profits from selling assets. The executor is also required to account for disbursements. It should be specific and detailed accounting, which deceased estate lawyers can advise on. These records must be available for beneficiaries to review. An executor will need to justify the actions they take and provide full disclosure pursuant to a court order.
If an executor is found to be acting fraudulently, they will have personal liability for the financial losses. The Supreme Courts also have the power to revoke probate from the executor in question. A deliberate, egregious act of fraud may result in criminal charges.
If an executor is accused of fraud, they cannot ignore the accusation, even if it was an off-handed remark. It is always best to take an allegation of fraud seriously. A beneficiary can petition the court to remove an executor. A beneficiary can sue the executor personally. In this event, the executor would need to go to court to defend themselves against the allegation. If they do not attend court, they can receive a default judgment against them. If you are accused of executor fraud, you should seek the services of a lawyer.
How AJB Stevens Can Help
Contesting a Will might seem like a dramatic choice, but the option is available for good reason. If you are a beneficiary, you deserve to receive what was provided for you. If you suspect executor fraud, enlist the services of estate litigation lawyers who can help you launch a Will dispute. The quicker you start challenging a Will, the better off everyone will be.
If you’re in a Will estate dispute situation where you don’t suspect executor fraud, you should still use reputable Will and estate lawyers to help you fight your care. Legal experts know the ins and outs of the law, and a firm like AJB Stevens can fight in your corner to make sure you get your due. Whether you want to have an executor removed from their position or sue them for fraudulent behaviour, AJB Stevens can help.