Can the Executor of a Will Spend the Money Any Way He Wants?

Can the Executor of a Will Spend the Money Any Way He Wants?`

Can the Executor of a Will Spend the Money Any Way He Wants?`

The death of a loved one can open the door to a flood of so many different emotions, and grief can exhibit in various ways. You might find yourself impatient with or suspicious of the individual who has been appointed to manage your loved one’s estate through probate, even if you’ve never been a particularly impatient or suspicious person before. That individual, called the executor of the estate, might even be a family member with whom you normally have a close relationship.

But now there are money, assets and debts on the line, and you find yourself wondering what exactly she’s doing with that money. Maybe you’re the primary beneficiary and it’s supposed to pass to you, but she’s whittling away at the balance. You can take comfort in knowing that there are some firm laws in place to monitor the activities of an executor.

An Executor Is a Fiduciary

The term "fiduciary" infers a great deal of responsibility. A fiduciary is legally bound to act in good faith to preserve the rights and well being of others, in this case the decedent’s estate and beneficiaries. This means putting their interests ahead of her own. If she doesn’t do so and you can prove it, you have legal recourse.

The Executor Is in Charge of That Cash

One of the executor’s first responsibilities after opening the estate with the probate court is to gather all the decedent’s assets, but this doesn’t mean transferring bank and investment accounts into her own name. It means moving the funds into an account or accounts in the estate’s name. Yes, she would be the party to write checks and make transactions from these accounts, but she will eventually have to account to a judge for each. Probate is a process carried out under the watchful eye and supervision of the court.

After the executor has identified and gathered all assets, she must submit a list of everything the decedent owned, including cash accounts and their values as of the date of death. Beneficiaries are entitled to copies of this report. If you notice that something is not on the list and you think it should be, you have a right to bring this to the court’s attention.

The Executor Has to Pay the Decedent’s Bills and Estate Expenses

The executor will almost certainly have to spend at least some of the money in the estate’s banks accounts, and she might have to liquidate or sell some or all of the decedent’s property to raise more money if the final bills are more than what was left in cash.

She’s also responsible for meeting the costs associated with managing the estate through probate. Appraisers might be necessary to value estate property, and they’ll expect payment. She might feel that she needs a lawyer’s assistance with certain estate matters, and the lawyer will expect to be paid as well.

The Executor Is Entitled to Compensation and Reimbursement

You might also notice checks made out to the executor, but this doesn’t necessarily mean she’s stealing from the estate. She’s entitled to make a claim to the estate for reimbursement if she spends her own personal money on estate-related expenses for things like postage, copying or even travel costs. In some states, she can simply take the money if she keeps proper receipts, but she might need court approval first in others.

Executors are also typically entitled to compensation for all their hard work. In reality, many family members who act as executors waive this fee, but others might not.

Executors can’t simply decide how much they’re entitled to receive for their services. Payment may require court approval, even if the decedent’s will states how much the executor should be paid. Some states have laws in place to determine how much an executor should be paid.

When the Estate Closes

An executor cannot simply gather assets, pay bills and expenses and then distribute the remaining assets to the beneficiaries. She needs court approval for closing the estate, and in most states, this involves giving a full accounting of everything on which she spent money. She can be held personally liable if anything is amiss or if the numbers don’t add up.

Beneficiaries often have the right to request an accounting of estate property and funds even before the estate is ready to close, in order to make sure everything is on the up-and-up. Contact a local attorney if you think you have cause for concern so you can learn the specific procedures in your state for alerting the court.

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About the Author

Beverly Bird has been writing professionally since 1983. She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath." Bird also has extensive experience as a paralegal, primarily in the areas of divorce and family law, bankruptcy and estate law. She covers many legal topics in her articles.