Beneficiaries or heirs expecting to inherit from an estate may need to monitor the actions of a personal representative. If they identify early warning signs of financial misconduct and breaches of fiduciary duty, they can avoid major losses that could significantly diminish what they inherit.
Self-dealing is a common way in which personal representatives abuse their authority. Any of the three behaviors below could provide the basis for probate litigation.
1. Hiring their business at above-market rates
The personal representative may run a business or professional practice. Personal representatives who overcharge the estate for services or award contracts to companies owned by them or their immediate family members may have put their desire for enrichment ahead of the best interests of beneficiaries.
2. Playing favorites with beneficiaries
Personal representatives should not allow their relationships with individual beneficiaries to dictate how they manage or distribute estate resources. Particularly in cases where they show favoritism to their spouse or children, their conduct may cross the line and represent a breach of fiduciary duty.
3. Undervaluing assets for sale
The liquidation of estate resources is often part of estate administration. Especially when selling businesses, real property and other high-value assets, it is important that personal representatives set a reasonable price for the sale of estate property. Undervaluing resources to transfer them to themselves or people in their inner circle could be a manipulative tactic to increase their own wealth of the expense of estate beneficiaries.
Initiating probate litigation to remove a personal representative for self-dealing can help preserve estate resources. Concerned beneficiaries may need help documenting the misconduct of a personal representative and taking legal action, and that’s okay.