Sometimes the executor of an estate does not do a very good job at administering the estate. How to sue an executor of the estate is a question we are often asked.
In Florida, the executor of an estate is referred to under Florida law as the Personal Representative. To bring a lawsuit against the Personal Representative, the petitioner needs to file on time, have a winning case, and be able to prove the case. Here are some common issues with Personal Representatives and how to successfully bring a lawsuit.
The Personal Representative is taking too long to administer the estate.
This is the most common complaint that we hear. A simple estate should be administered in one year or less. In more complex estates, the estate administration could go on for many years. For example, if there are creditor claims, estate taxes to be paid, operating businesses held as assets of the estate, or litigation against a surviving spouse, the estate could easily go on for many years. If litigation results in appeals, the probate could last for five years or more.
If, notwithstanding the complexity of the estate, you feel that the estate is taking too long to administer, a lawsuit can be brought in the probate estate to compel the personal representative to finish administration of the estate.
Typically, the lawsuit would be titled as a Motion to Compel Administration, or a Motion to Compel Winding Up of Probate Administration. In the motion, the facts of the administration would be set forth, with an explanation that the estate administration should have been completed with the exercise of normal due diligence.
The Personal Representative will not give me my money.
There are two potential types of issues – the Personal Representative is holding all or a portion of the inheritance for too long, or the Personal Representative is giving the inheritance to the wrong person. Neither is acceptable.
If the Personal Representative has paid the inheritance to the wrong person, the remedy is file a lawsuit for Breach Of Fiduciary Duty, and to include within that an action against the person who improperly received the inheritance, such as a Petition to Return Assets. If successful, the person receiving the inheritance improperly would be forced to return the money. If that person cannot successfully be compelled to return the inheritance, the Personal Representative would be sued for the improper distribution. In addition, attorney fees would be sought against the Personal Representative, and possibly removal of the Personal Representative, if the conduct is egregious.
If the Personal Representative does not make distribution on a timely enough basis, a motion can be compelled to force a distribution, or perhaps an interim distribution. Whether the distribution is in fact late depends on the issues and needs of the estate (estate tax issues, creditor claims, a will contest). If there is no good reason to withhold distribution of the inheritance, the probate court should order an interim or complete distribution of the inheritance.
The Personal Representative is charging excessive fees.
Reasonable fees for a Personal Representative are allowed in Florida. An amount that is presumed reasonable is set forth in the Florida Probate Code. If the Personal Representative takes fees in excess of the reasonable amount, a successful challenge could be brought to return the excessive executor fee.
The Personal Representative is profiting from the probate estate.
The Personal Representative is not allowed to profit from the administration of the Estate. For example, the personal representative should not be buying assets from the Estate at a discount (or really at any price) unless full disclosure is made to the beneficiaries and they approve the transaction and/or the probate court approves the transactions. A Personal Representative who nevertheless engages in acts of self dealing can be sued for a return of any profits, as well as for attorney fees, and possible removal.
Other Issues
There are many other issues that can arise. The Florida Probate Code sets forth the general rules of conduct and behavior about how executors are supposed to act. Section 733.609 sets forth the basic rule:
A personal representative’s fiduciary duty is the same as the fiduciary duty of a trustee of an express trust, and a personal representative is liable to interested persons for damage or loss resulting from the breach of this duty.
A lawsuit can be filed against the Personal Representative for violating these fiduciary duties, a few of which are as follows:
- Duty of Loyalty. The Personal Representative is required to administer the Estate in the interests of the beneficiaries, not in the interest of the Personal Representative.
- Duty of Impartiality. As between multiple beneficiaries who are similarly situation, the Personal Representative should treat them impartially as much as possible. For example, a will might leave specific bequests in the amount of $50,000 to two beneficiaries. If distribution is going to be made to one, it should be made to both. If there is not enough cash on hand, the distribution should be made pro rata until sufficient cash is raised. If the Personal Representative is not going to treat beneficiaries impartially, the Personal Representative must have a very good reason for so doing.
- Duty of Prudent Administration. The duty of Prudent Administration typically addresses the investments of the Estate. If the Estate starts out invested only in speculative stocks, it might be wise to diversify into a balanced portfolio, or possibly into cash. If the Estate owns real estate, the real estate should normally be insured in case of casualty. The failure to prudently administer the Estate can expose the Executor to liability.
