When someone dies, the distribution of their estate is typically managed by an executor. Not only is an executor someone that the deceased likely trusted very deeply to manage their final affairs but they are legally obligated to act in the best interests of the estate’s beneficiaries.
Unfortunately, there are times when executors have been known to misuse their position and abuse that trust for their personal gain through what is known as “self-dealing.” This is a serious breach of the executor’s fiduciary duty.
What are some examples of self-dealing?
Self-dealing is basically any act that puts the executor’s interests ahead of the interests of the estate or its beneficiaries. It can look like:
- Selling estate assets to themselves at a discount: Everybody loves a bargain, but when an executor decides to purchase a valuable piece of property held by an estate at a price that’s below market value without the approval of the beneficiaries or the court, that’s self-dealing.
- Using estate funds for their personal expenses: Executors generally have a right to be reimbursed for estate-related expenses, but that doesn’t mean the estate’s funds are their personal piggy bank. If they “borrow” money to pay off a loan or some credit card debt, that’s a violation of their fiduciary duty.
- Investing estate funds in their business: Executors are often asked to manage investments for an estate, but if they shift those investments over to a business they manage or have a financial interest in, that’s engaging in underhand activities and self-dealing.
Self-dealing undermines the integrity of the estate administration process and is a deep betrayal of trust. Legal recourse is available to beneficiaries who suspect that an executor is engaging in this kind of breach of their duty.