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    TRUSTS & ESTATES, WILLS, AND TAX LAW UPDATE

    ESTATES: Removal of an Executor or Trustee

    Posted by D. Bradley Pettit on Fri, Feb 16, 2018 @ 16:02 PM

         The general rule is that a probate or surrogate's court may revoke letters of administration that were granted to an executor or personal representative if there is demonstrated friction, hostility or antagonism between the appointed fiduciary and beneficiaries of a decedent's estate, but only if the enmity between the fiduciary and the beneficiaries threatens to interfere with the administration of the estate.  In re Estate of Brown, 2016 N.Y. Slip Op. 02691, 138 A.D.3d 1191, 29 N.Y.S.3d 630 (3d Dep't 2016).  In other words, neither a conflict of interest nor hostility between an executor or trustee and the beneficiaries of an estate or trust provide the basis for removing a trustee or personal representative unless the administration of the trust or estate has been adversely affected.  In re Gerald L. Pollack Trust, 309 Mich. App. 125, 867 N.W.2d 884 (2015); In re Estate of Robb, 21 Neb. App. 429, 839 N.W.2d 368 (2013) (when executor of estate has a personal interest in administration of estate and in disposition of estate property and circumstances reveal that those conflicting interests are preventing executor from performing fiduciary duties in impartial manner, then executor should be removed).

         The mere fact that the personal representative of a decedent's estate is also a beneficiary thereof does not necessarily create a conflict of interest that would justify the removal of the personal representative as the fiduciary for the estate.  Gardiner v. Taufer, 2014 UT 56, 342 P.3d 269.  In order to justify removal of a personal representative who is also a beneficiary of an estate, the evidence must show that the personal representative committed some negligent act or mismanagement of the estate before a court can find a sufficient conflict of interest that is serious enough to justify removal of the estate fiduciary.  Id. ¶ 31, 342 P.3d at 279.

          The fact that there is animosity between the fiduciary for an estate and the beneficiaries thereof does not automatically mandate removal of the fiduciary from his or her office.  Ashley v. Ashley, 2012 Ark. App. 236, 405 S.W.3d 419, reh'g denied, CA11-741, 2012 Ark. App. LEXIS 452 (May 16, 2012).  But animosity between an estate fiduciary and the beneficiaries coupled with evidence that the fiduciary failed to comply with probate court orders or was negligent in the handling of the estate may justify removal of the fiduciary from office.  Id. at 12-13, 405 S.W.3d at 426-27.

           The fact that an appointed executor of a decedent's estate also served as the decedent's attorney-in-fact while the decedent was alive does not give rise to a sufficient conflict of interest that would support removal of the attorney-in-fact/executor as the estate fiduciary.  If the facts additionally show, however, that there is evidence of misconduct on the part of the agent/executor, such as an indication that while he or she was serving as attorney-in-fact, he or she transferred significant assets from the decedent to himself or herself for personal benefit at a time that the decedent's cognitive and physical condition had deteriorated, then removal is appropriate.  In re Estate of Anderson-Feeley, 2007 MT 354, 340 Mont. 352, 174 P.3d 512.

          When deciding whether an independent executor's conflict of interest or disagreements with the beneficiaries of an estate amounts to sufficient misconduct or mismanagement of the estate as would warrant his or her removal as executor, the trial court can take into consideration several factors including the following: the size of the estate; the degree of actual harm to the estate; the executor's good faith in asserting a claim for estate property; the testator's knowledge of the conflict; and the executor's disclosure of the conflict.  Kappus v. Kappus, 52 Tex. Sup. Ct. J. 754, 284 S.W.3d 831 (2009).

         The authorities cited suggest that the existence of a potential conflict of interest on the part of the fiduciary of an estate or animosity between the fiduciary and beneficiaries does not necessarily justify removal of the fiduciary from office.  There must be evidence of additional circumstances, such as misconduct or mismanagement on the part of the fiduciary, before a probate or similar court will grant a petition by the beneficiaries of an estate to remove the executor or personal representative.

    Topics: executor of estate, hostility between trustee and beneficiary, motives and conflict of interest if trustee is a b, removal of executor or personal representative

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