When a California resident passes away, their estate usually goes through a process called probate. During probate, the decedent’s will is validated, the estate’s bills are paid and is assets are distributed to the beneficiaries named in the will. These important tasks are handled by the estate’s personal representative. This is usually the person named as the executor in the decedent’s will. If the will does not name an executor or the decedent did not leave a will, a personal representative will be appointed by the court. If an executor makes mistakes or acts improperly, they can be sued by either the estate’s creditors or its beneficiaries.
Lawsuits filed by creditors
Before an estate’s assets can be distributed to the beneficiaries named in the will, its debts must be settled. Creditors must file claims in probate court before they can be paid. Once all of these claims have been received, debts are prioritized and paid according to state law. If an executor fails to pay a valid debt or the estate runs out of money because lower priority debts were paid first, creditors can sue the executor. Creditors can also sue beneficiaries to recover what they are owed if assets were distributed prematurely.
Lawsuits filed by beneficiaries
Executors have a fiduciary relationship with an estate’s beneficiaries. This means they are required to act in the beneficiaries’ best interests at all times. If they fail to meet this duty, they can be sued. This kind of probate litigation is usually initiated when executors have acted fraudulently or sold assets for less than their fair market value. When executors are suspected of committing fraud, they can be sued personally.
Avoiding executor lawsuits
Choosing an executor who is capable and will perform their duties diligently is the way to avoid estate litigation. The probate process is complex and the rules are strict, which is a recipe for mistakes if the individual tasked with handling important matters is not up to the job.