Executor Removed for Mismanagement

An independent executor cannot breach his fiduciary duties to the estate beneficiaries by self-dealing, mismanaging estate property, and failing to disclose potential conflicts of interest.  The court of appeals in Waco recently found that it was proper to remove an executor of his mother’s estate (the oldest son of the deceased), and to substitute in the secondary executor named in the will (a younger son of the deceased) due to breaches of fiduciary duty on the part of the first executor.

In this case, the original executor breached his fiduciary duty to the other beneficiaries of the estate (who were his three siblings) by signing leases for approximately half of the rent that his mother had been receiving before her death.  The leases were for property that the family business (of which the oldest son original executor was president) leased from the mother during her life.  When the oldest son became the executor of his mother’s estate, he cut the lease payments to the estate in half without notifying his siblings, who were the other beneficiaries of the estate.

The court found that the original executor failed to discharge his fiduciary duties to his siblings in a proper way, since he allowed his conflict of interest as president of the family business to reduce the rent payments to his mother’s estate (and to his siblings as beneficiaries of the estate), without disclosing his plans to his siblings and giving them a chance to object.  As a result, the court removed him as executor, denied his request for attorney’s fees, and awarded attorney’s fees to his siblings.