What Happens if the Executor Steals From the Estate?
An Executor of an estate must, among other things, collect the assets of the estate, pay any estate debts and taxes, pay the expenses associated with administering the estate (for example, legal fees associated with the administration of the estate, costs of packing and mailing estate property to beneficiaries), and distribute the estate in accordance with the decedent’s will. But what happens if the executor steals from the estate?
Removing the Executor Who Steals from the Estate.
A person with an interest in the estate can petition to have an Executor removed if there are good grounds to do so. For example, if a beneficiary believes that the Executor is stealing funds from the estate, he can prepare and file a Petition to Revoke and Appoint. In this Petition, the Petitioner should state the facts of the matter, provide grounds for removing the current acting executor, and name a successor to act in his place. If there is already a co-executor, the Petitioner can ask that the co-executor act alone. It should be noted, however, that you must read the will to make sure that a named co-executor is authorized to act alone.
If there is no co-executor (or if the co-executor cannot act alone), the Petitioner would ask that an administrator cta (that is, a person who was not named in the will to be appointed after the will has been probated and an executor has been appointed) be appointed.
Refer to Section Section 711 of the Surrogate’s Court Procedure Act for grounds for removing an executor.
Making the Executor Account for His Actions.
In the Petition to Revoke the Executor’s letters, the Petitioner can also request that the Executor prepare an accounting covering the period of time during which he was acting as fiduciary. In the accounting, the Executor will need to provide thorough details about how much was in the estate at the beginning of the accounting period (which could be the decedent’s date of death or a different date, depending on when the Executor started acting on behalf of the estate), how much income was received by the estate during that time that the Executor has been acting, state how all of the money has been spent up until the present time, and list how much remains in the estate at the present time.
Surcharging the Executor who Steals from the Estate
In addition to requesting an accounting, the Petitioner, after reviewing the accounting.can seek to surcharge he Executor for breaching his fiduciary duties and causing harm to the estate. A surcharge will typically be imposed for the amount that the Executor has stolen from the estate. If the Executor is bonded, then the surety will pay the surcharge and then seek to recover from the Executor afterwards.
Bringing a Turnover Proceeding Against the Executor Who Steals from the Estate.
If you discover that the Executor has stolen, you can also commence a Discovery and Turnover proceeding to get the asset back into the Estate. Click here for more details about the Discovery and Turnover process.
Bonding an Executor to Prevent Theft.
A bond is insurance for the estate. It is a device used to protect the estate from any wrongdoing on the part of the executor and make sure that all of the estate creditors are paid and that all beneficiaries receive their appropriate shares. Without a bond, the estate is vulnerable to any potential wrongdoing on the part of the estate fiduciary.
We can help you recover stolen funds so please feel free to contact us for help.
For more information, please contact Guardianship, probate and estate planning attorney Regina Kiperman:
Or visit her at her office:
80 Maiden Lane
New York, NY 10038
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