What Happens When the Executor of the Will Steals the Money?

By Laura Payet

What Happens When the Executor of the Will Steals the Money?

By Laura Payet

The executor is the person appointed in a deceased person's will to manage her estate and distribute assets to the will's beneficiaries. An executor's many responsibilities require him to have access to the estate's funds, which sometimes can prove too much of a temptation for someone inclined to dishonesty.

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A beneficiary has several ways to take action against a thieving executor. You can ask for an accounting to track where the money is going, you can bring legal action against him to recover stolen assets, and, if the executor has posted a bond, you can make a claim against it. Whatever you do, you should act quickly. Even though you have a right to recover from the executor, if the money is spent, he may not have the resources to repay you.

An Executor's Responsibilities

An executor's duties include:

  • Submitting the will to the court for probate
  • Setting up a separate bank account for the estate
  • Locating, inventorying, and appraising the estate assets
  • Notifying creditors of the deceased's passing
  • Paying the deceased's debts, including funeral expenses and final taxes
  • Keeping an accurate accounting of all income and expenses
  • Distributing assets according to the will

In addition to these concrete tasks, the executor owes the deceased and her beneficiaries a fiduciary duty to act in good faith at all times and for the benefit of the estate and its beneficiaries. Stealing estate assets is a clear violation of this duty.

Remedies for an Executor's Theft

If you suspect that the executor is stealing money from the estate, you or your attorney should send him a letter demanding an accounting. In response, he is required to provide you with documentation of all the estate assets, income, and expenses, including bank statements, receipts, and other supporting materials. Hopefully, the accounting will show your suspicions are unfounded.

If, however, the accounting is incomplete or suspect, you can petition the court to remove the executor and appoint a new one. Thereafter, you can file a lawsuit against the former executor to recover stolen assets. The extent to which you can recoup the estate's losses, however, is limited by the executor's resources, so it's important to act quickly before the estate's funds are all spent.

Some states require an executor to post a bond upon appointment, which acts as insurance for the estate from losses he may cause. The executor pays a premium for the insurer to cover losses caused by his conduct. As a beneficiary, you can turn to the insurer to repay the executor's theft up to the bond amount. Thus, for example, if the executor has a $100,000 bond but you can prove that $125,000 was stolen, your compensation will be limited to $100,000. In some states, to recover on the bond you must file a lawsuit, sometimes known as a surcharge action, against both the insurer and the executor.

Finally, in cases where the theft is particularly egregious or well-documented, you may wish to contact the police. Know, however, that the police may not be responsive to allegations of executor theft, believing the issue to be a family dispute that can be difficult to prove.

If you have been appointed the executor in someone's will, the task can seem daunting. You face many serious responsibilities, with personal liability for your mistakes as a possible consequence. But you don't have to manage it all alone. An online service provider can guide you through the process. You can also hire an estate planning attorney for assistance.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.