An estate executor or administrator has many obligations with regard to an estate. The New York Probate Lawyer Blog has discussed in many posts the various powers that an estate fiduciary can exercise. These powers include the right to collect assets and pay expenses.
However, in addition to the powers to be used to administer an estate, a fiduciary is responsible for various fiduciary duties. For example, an executor has a duty to treat estate fiduciaries fairly. Also, the executor owes a duty of loyalty to the estate and cannot engage in acts considered to be self-dealing. Such conduct might involve taking advantage of the estate to further the fiduciary’s personal interest. For example, New York City estate lawyers are aware that it would be improper for a fiduciary to purchase an estate asset for a price below the fair market value. When an administrator or executor acts improperly, such conduct is viewed as a breach of fiduciary duty.Another aspect of conduct requires that there be no conflicts of interest. Similar to self-dealing, a conflict of interest may result if the Court appointed estate representative favors his own interests above those of the estate and its beneficiaries. A recent case decided by Manhattan Surrogate Nora Anderson on May 12, 2017 entitled Matter of Linton reflects the problem of a conflict of interest.
In Linton one of the preliminary executors of an estate sought to revoke the appointment of his co-preliminary executor. A preliminary executor is typically appointed on a temporary basis when it appears that the final probate of a Will is to be delayed due to a Will Contest or Kinship issue or other matters that can delay probate.
The respondent co-preliminary executor in Linton appears to have had a significant financial interest in a company as to which the decedent’s estate was a creditor. Thus, to the extent the estate was to enforce its creditor’s rights against the company, the preliminary executor may have been personally harmed. In view of the severity of the conflict, the Court suspended the preliminary letters of the co-fiduciary.
I have represented many fiduciaries and beneficiaries in estate litigation cases. It is important that the fiduciary recognize and avoid all situations that may result in a breach of fiduciary duty. The executor or administrator can be removed in such situations. Also the executor or administrator may be found responsible to pay monetarily if the breach of a duty results in damage to the estate.
Call me now for a free discussion if you have any questions or concerns regarding a breach of fiduciary duty. These types of problems can arise in probate cases, administration cases and accounting proceedings.
New York Trusts and Estates Attorney Jules Martin Haas has helped many clients over the past 30 years resolve issues relating to probate and estate settlement throughout New York City including Manhattan and Brooklyn. If you or someone you know has any questions regarding these matters, please contact me at (212) 355-2575 for an initial consultation.