Can the Executor of a Will Take Everything?

Executive Summary

• An executor of a will plays an important part in administering an estate and has several powers, including managing financial assets, but they have limitations on their power that prevent them from taking assets from an estate for personal gain.
• An executor cannot take everything from an estate’s resources and are only entitled to executor’s fees as compensation for their services, and their inheritance if they are also named as a beneficiary.
• An executor’s responsibility is to administer the estate based on the will’s terms, and they cannot make decisions that override the creator of the will’s wishes.
• If you suspect that an executor has stolen money from an estate or breached their duty, then you should contact a probate and estate administration attorney as soon as possible to support you in pursuing litigation.

Introduction

A will’s executor is responsible for managing and administering the estate as outlined by the terms of the will. An executor has significant responsibility, but they are limited in their power and have a duty to only act in the best interest of the estate. If they breach this duty, then you may have grounds to pursue executor removal or legal recourse.

Generally speaking, the executor of a will cannot take everything simply based on their status as executor. Executors are bound by the terms of the will and must distribute assets as the will directs. This means that executors cannot ignore the asset distribution in the will and take everything for themselves. However, if the executor of the will is also the only beneficiary named in the will, they can take the estate assets after debts and taxes are paid.

Ultimately, understanding what an executor can and can’t do is important for ensuring estate assets are managed appropriately. This guide discusses what the executor of an estate can do and what their limitations are when managing the assets of an estate. 

What is an executor of a will?

The executor of a will is the person responsible for managing the probate process for a decedent’s estate, including administering the estate and distributing assets to identified beneficiaries. Typically, the executor is selected by the testator, or the creator of a will, and named in the document. 

The named executor must then be approved by the probate court to initiate the probate process. In instances where there is no named executor in the will or the executor does not wish to serve, the court will appoint a successor (known as an administrator with the will annexed), based on an order of priority, starting with the surviving spouse, then surviving child, and so on until a suitable administrator has been located and appointed.

The executor’s responsibilities include marshaling assets, paying estate taxes and debts, selling estate property as necessary, and distributing estate assets and property to the named beneficiaries of the will.

Can an executor of a will take everything?

No. An executor of a will cannot take everything unless they are the will’s sole beneficiary. 

An executor is a fiduciary to the estate beneficiaries, not necessarily a beneficiary. Serving as an executor only entitles someone to receive an executor fee. While the executor fee will come from the estate funds, it is a legal entitlement to be paid for their time and effort as approved by the court and not an inheritance. 

In some cases, the named executor may also be a beneficiary of the will, serving two separate roles at once. When the executor is also a beneficiary of the will, they are entitled to receive their inheritance on top of the executor fee. However, the executor cannot modify the terms of the will. 

As a fiduciary, the executor has a legal duty to act in the beneficiaries and estate’s best interests and distribute the assets according to the will. This means that an executor cannot allocate all assets to themselves unless they are the sole beneficiary of the will or if the will expressly gives them the power to do so. However, this scenario is uncommon.

Can an executor take money from the estate?

An executor can only take money from the estate if it is for the benefit of the estate or outlined in the will. An executor has authority to manage finances for an estate and allocate funds to pay for any fees or expenses surrounding the estate. For example, they can use these funds to pay debts, taxes, and administrative expenses, like property maintenance.

However, they do not have the authority to simply take money without reason at their own discretion. Any money that they manage or spend must only be done for the benefit of the estate. An executor cannot decide to take money from the estate for their own personal gain.

What happens if an executor spends all the money?

Cases of executor theft can have harsh repercussions for beneficiaries and the estate as a whole. If an executor takes everything, then they will drain the assets of the estate and leave nothing to distribute to the beneficiaries, preventing them from accessing their rightful inheritance. Spending all the estate assets can also lead to fines and repercussions for the estate if there is not enough money left to pay for important expenses like estate taxes and creditor debts.

Fortunately, the law provides potential recourse for beneficiaries who have experienced theft at the hands of an estate executor. An executor who steals from an estate will be subject to legal consequences and required to pay restitution for their actions.

If an executor spends all the money from an estate, then beneficiaries should take the following steps:

• Requesting an accounting – Beneficiaries have a right to request an accounting of assets related to an estate, including what assets are still in the estate accounts, what transactions an estate executor has made.
• Proving misconduct in court – Beneficiaries should gather evidence surrounding an executor’s misconduct, like account records, missing assets, and a lack of communication, to present before the court and prove that they have stolen or squandered assets.
• Seeking damages and remedies – Beneficiaries can seek damages through the court to protect their access to their rightful inheritance and have the executor return the stolen money.

Under California Probate Code §8502 and Texas Property Code §113.082, beneficiaries can also seek to remove an executor for misconduct and have a new executor appointed. A probate estate litigation attorney can provide guidance in this process and support beneficiaries in understanding their options if an executor takes all the money from an estate.

Can an executor withdraw money from an estate account?

An executor can transfer money from a decedent’s bank account to an estate account in the name of the executor, but they cannot withdraw cash from the account or transfer it into their own bank account. The executor can then utilize this money to pay for any expenses related to the management of the estate. 

Examples of authorized expenses include:

• Debts
• Estate or property taxes
• Expenses for maintaining the estate, like a mortgage
• Utilities, maintenance, and other expenses for property upkeep

It’s important to distinguish—the estate’s assets do not belong to the executor. They belong to the estate. As a fiduciary, the executor must manage the money in the estate account, but they cannot take it for themselves. Even if the executor is also a beneficiary, they cannot take funds directly from the decedent’s account as their “inheritance.” They must wait until the estate is closed and funds are distributed to beneficiaries upon court approval of a petition for final distribution. 

An estate account will list the executor as the account owner, but in their capacity as fiduciary of the estate. The executor can access the funds in the account as needed to pay debts, taxes, and other estate expenses. When the estate is closed, the executor can close the account and distribute the money according to the will. However, the executor cannot use the funds for their own purposes or as they wish.

The executor must maintain accountability in their management of estate assets by maintaining an accounting of all estate transactions. They should disclose this accounting to beneficiaries and the probate court at least annually and as appropriate. At the end of the probate process, they must also submit a full accounting of every transaction that occurred. This accounting should include receipts of transactions, tax returns, account statements, closing statements, and more.

Can an executor sell property of the estate?

Yes, executors can sell the estate’s property, with some limitations.

In California, a probate referee will be appointed to appraise the estate assets, including personal property, securities and real estate. The executor may be able to sell the estate’s personal property for 90 percent or more of the appraised value without receiving approval from the court or the beneficiaries. While the executor may not need to get approval from the beneficiaries, executors should provide beneficiaries with notice of the sale. 

An exception to this rule is that, when selling real estate, the executor usually must receive approval from both the beneficiaries and the court. To receive the approval for this, they must complete a petition to approve acts, which will require that the court provides input to approve these actions.

If an executor does not follow this process, you may have grounds for a legal contest claiming breach of fiduciary duty.

What powers do executors have?

As the administrator of the estate, executors do have some key powers that set them apart from other interested parties. These powers are concentrated in their responsibilities to manage assets around the estate. Executor powers are outlined in detail in probate codes.

Executors have the following powers:

• Administrative powers – These powers are any of those that involve managing the welfare of the estate, which include marshaling and inventorying estate assets, soliciting creditor claims, selling real estate, and paying debts or taxes.
• Distributive powers – Distributive powers are those related to distributing assets as stated by the will, which include distributing assets to beneficiaries and overseeing disputes between beneficiaries once all other obligations, debts, and taxes have been paid.

However, the probate court does not give unlimited discretion to estate executors in their role, and many of these powers are also limited by the court. For example, in order to sell real estate, an executor must receive approval by petitioning the probate court. Similarly, estate executors must submit a petition to the court for an approval for a final distribution.

If an executor oversteps these bounds, they can face a legal contest from beneficiaries and even be removed from their position.

What can I do if an executor steals money?

If an executor steals money from an estate, then you do have options for legal recourse. The most important thing is to take action as soon as you suspect an act of wrongdoing from an executor.

If you suspect that an executor has stolen money from an estate, you should take the following steps:

• Understand potential signs of misconduct – You can identify potential theft sooner if you understand the potential signs of theft or misconduct, which include unexplained gaps in accounting, a lack of communication from the executor, or unexplained transactions.
• Take immediate action – The longer you wait to open a case, the less likely you are to recover assets, so you should reach out to an attorney as soon as possible.
• Contact an attorney – To support you in taking action against an executor, your first step should be to contact a probate and estate administration attorney so they can help you understand your options and begin taking action.
• Recovering stolen assets – Your attorney will work with you to recover the assets stolen by the executor by sending a demand letter, threatening legal action if they do not return the stolen assets.
• Initiating litigation – If the executor does not respond to the demand letter, you can file a lawsuit against an executor and initiate the litigation process, which includes taking the executor to court, presenting evidence of theft, and having the executor removed.

In many cases, a beneficiary’s first instinct is to call the police when they suspect an executor has stolen. Unfortunately, however, an executor stealing money from an estate is considered a civil matter, not a criminal one. The police will not be likely to provide support past recommending that you take the matter to court.

Can an executor decide who will get what?

Although the executor plays an important part in the estate administration process, they do not have the authority to decide who gets what. Their responsibility requires that they follow the terms of the estate planning documents.

An executor does have some authority to make decisions regarding the distribution of assets. For example, if there are areas of ambiguity surrounding a testator’s intentions in a will, the executor does have authority to interpret what the will says and who should receive what distributions. In doing so, they must leave their personal interests aside and use their understanding of the will and the testator’s wishes to make decisions.

In other cases, if there are beneficiaries who challenge their distributions, the estate executor can lead negotiations to pursue a resolution. Once again, in this process, they must strictly follow the terms of the will and the wishes of the testator to guide their decisions. However, this process often also requires that they consult the court.

There are some cases where a conflict of interest may arise regarding the management of expenses and disbursements, particularly when an executor of a will is also a beneficiary. If an executor seems to overstep their boundary in overseeing asset distribution for the will, then beneficiaries can pursue legal remedies and appeal or contest the will through the probate court. The executor should also maintain consistent communication around their actions and why they are taking them in order to alleviate any potential concerns among beneficiaries.

Who can be executor of the estate?

In California, anyone who is at least 18 years old and has not been determined to be incapacitated by court order can be an executor. As long as they meet these requirements, an executor can be named in a will and approved by the court. Executors are often family members or close friends of the deceased, but some people prefer to name disinterested third parties as their executors to keep management out of the family to reduce friction.

Additionally, there is no prohibition on beneficiaries of the will serving as executors. In fact, they often do. Because the executor has a fiduciary duty to the estate and all of its beneficiaries, this usually does not cause any problems, despite the apparent conflict of interest. 

However, sometimes executors who are also beneficiaries choose to ignore their fiduciary duties and act to further their own interests, even when contrary to the other beneficiaries’ interests. If you are a beneficiary of a will and suspect that the executor is violating their fiduciary duty, you should discuss the situation with a probate litigation attorney as soon as possible. 

Can the executor of an estate be changed?

Yes, an executor of an estate can be removed under certain circumstances in California. According to California State Probate Code §8502, an executor can be removed when:

• They have wasted, embezzled, mismanaged, or committed a fraud on the estate, or are about to do so.
• They are incapable of properly executing their duties or are otherwise not qualified for appointment.
• They have wrongfully neglected the estate, or have long neglected to perform any duties.
• The removal is necessary to protect the estate or interested persons.
• There is another cause for removal under state statute.

If a question is raised about an executor’s qualifications, the court will hold a hearing to decide whether the executor should be replaced and who is best suited to serve as executor. Interested parties, such as the decedent’s spouse, beneficiaries and heirs, creditors, and other potential executors, have a right to participate. After the hearing, the judge can remove an executor if they agree there are grounds for removal.

How long can an executor take to settle an estate?

While the probate process in California usually takes about anywhere from a year to two years, more complicated estates can take several years to settle. 

An estate with a clear will and no contests or complications can usually be settled in around a year. On the other hand, complicated tax issues, high-dollar assets, challenges to the will, bogged down legal processes, and other complications can make the estate take much longer to settle.

If you are a beneficiary and believe that the executor is dragging their feet and wrongfully neglecting the estate, you should consult with an experienced probate litigation lawyer as soon as possible. You may be able to have the executor removed and replaced with someone who is willing to do the work needed to settle the estate and distribute your inheritance sooner. 

Find an estate lawyer who can help 

An estate attorney is not necessary for challenging an executor, but they are a valuable resource in the process. They will help you gather evidence surrounding the suspected theft, follow the necessary legal procedures for challenging an executor, and represent you in court if litigation is necessary. If you have an estate dispute, hiring the best attorney familiar with the local probate court where your case is going to be heard and decided often will get you the best result.

At RMO, our probate litigation attorneys are here to guide you throughout challenging legal processes and help you pursue restitution for executor theft. With decades of legal experience, we will support you in developing a winning strategy so you can recover your stolen assets and preserve the best interests of your estate, and secure access to your rightful inheritance.

Schedule a consultation with our team to start discussing your case today.