An executor is considered a fiduciary, which means the executor is held to a heightened standard with regard to handling of the estate’s financial matters. Fiduciary duties fall into two main categories. The duty of loyalty means that the executor must do what is in the best interests of the estate and its beneficiaries, not what is in his best interest or what he thinks is right. The duty of care means the executor must perform his basic functions with a certain reasonable level of competency.
In some circumstances, the executor may also be an agent of the estate and subject to the legal principles of agency. In general, an executor-as-agent must avoid conflict between his personal interests and those of the estate, act subject to the directions of the estate’s beneficiaries or the court, perform with reasonable diligence and act within the appropriate scope of authority. An executor may be called upon to defend the estate in court against creditor claims or to file claims against others on behalf of the estate, either of which would imply acting as an agent of the estate.
The executor of a will must keep in mind the general principles of fiduciary duty and agency when carrying out the particular duties of the position. These duties include compiling an inventory of the estate identifying all assets that are properly part of the estate and their estimated value. The process will likely involve contacting banks, insurance companies, stock brokers, warehouses or any other institution that may be custodian of estate assets. To gain control of the estate assets from these private businesses, the executor must obtain and present a death certificate and letters testamentary showing her status as the executor. Another important obligation of the estate may be paying federal or state taxes, which the executor is responsible for filing in a timely fashion. If there are assets remaining after the obligations of the estate are satisfied, the executor must also ensure that the beneficiaries receive the property to which they are entitled.
The executor can be held accountable for failure to perform her duties satisfactorily, and may be removed for wasting the value of the estate through poor management. Embezzlement, fraud or other malfeasance can also result in removal of an executor and the filing of a civil action against her. Before an executor is released from her obligations, she must file a final accounting with the court, which interested parties can review and use as a basis for their claims against the executor. In some states, the executor may even have to post a bond in court against the possibility of being sued for waste or malfeasance of the estate.