How to Find Out if the Executor of an Estate Cashed Insurance Checks

By David Carnes

The executor of an estate is accountable to the beneficiaries, heirs and estate creditors for his administration of the estate. He must inform these parties, as well as the probate court, of his actions on behalf of the estate. Although the executor is charged with day-to-day administration of the estate, the probate court holds ultimate authority and may intervene if the executor acts inappropriately.

Accounting Obligations

An executor is subject to two types of duties: common law fiduciary duties and statutory duties imposed by the state probate code. Fiduciary duties require the executor to communicate openly and honestly with beneficiaries, heirs and estate creditors. State probate law requires the executor to provide an accounting report to the probate court before probate is closed and comply with any probate court orders to prepare accounting reports during the probate process. In the accounting report, the executor must list all transactions involving trust property, including the cashing of insurance checks when the funds belong to the estate.

Action to Compel Estate Audit

An interested party, such as an heir or estate creditor, may file a petition with the probate court seeking an order to compel an audit of the estate. A petition to audit the estate, sometimes called a "petition to compel accounting," must allege facts that, if true, indicate the executor has acted incompetently or dishonestly in his administration of the estate. The court will then convene a probate hearing to rule on the petition. The petitioner may be required to present evidence in favor of his petition. If ordered, an audit will force the executor to state under oath whether he cashed insurance checks and reveal how he disposed of the funds if he did cash such checks.

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Petition for Removal

If evidence indicates the executor acted inappropriately, any interested party, such as an estate heir or creditor, may file a petition to remove the executor and have him replaced with someone else. Simply cashing insurance checks is not enough to establish misconduct if the executor did so for a legitimate reason, such as raising funds to pay estate creditors. Likewise, the executor cannot be removed simply for performing acts that are unpopular with heirs or creditors; actual misconduct must be established. Even misconduct may not be enough to remove the executor unless it resulted in a significant adverse effect on estate property.

Testamentary Trusts

In many cases, the decedent's will establishes a testamentary trust that provides for distribution of estate property after the close of probate. In this case, the decedent will often nominate the same person as executor of the estate and trustee of the trust. Although this doesn't directly affect the rights of beneficiaries or creditors to information concerning the disposition of estate assets, decedents sometimes appoint a "trust protector." A trust protector serves only one function: to fire the trustee, if necessary, and appoint a new trustee to replace him. If the decedent established a testamentary trust with a trust protector, you might appeal to the trust protector to demand a trust accounting report from the trustee before the close of probate. If he refuses to comply, the trust protector may fire the trustee and appoint either himself or a third party as the new trustee without the need for a court order. The new trustee would then gain access to all estate-related financial documentation, including canceled checks.

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References

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