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When an executor can be sued and who can do it

On Behalf of | Jul 7, 2022 | Estate Administration & Probate |

An executor is the person who is appointed to take an individual’s will through the probate process after the testator’s death. This involves managing the estate, including paying creditors and taxes and distributing assets to heirs. Creditors and heirs in Maryland may sue the executor of an estate under certain limited circumstances.

Lawsuits by creditors

Although the executor acts as the representative of the estate, they are not liable for the estate’s debts. However, they are supposed to pay those debts out of the estate’s assets. A creditor needs to file a claim in order to have a debt paid. There is an order of priority for paying claims as determined by the state. An executor is supposed to follow this order, and if they do so and do not mismanage the estate, a creditor does not have recourse if the estate runs out of money before they are paid. However, if the executor pays the claims out of order or takes the money themselves, a creditor may be able to file a lawsuit. Even in this case, the executor is not liable beyond the estate value.

Lawsuits by beneficiaries

Beneficiaries may also be able to file a lawsuit if an executor violates their fiduciary duty. This is the duty to carry out their responsibilities, and the violation may be intentional or unintentional. It can range from making bad investment choices or not filing taxes to criminal activity. The outcome of probate litigation could be the replacement of the executor, or the executor could also be held personally liable and required to pay damages.

Executors are not required to be experts in law or finance and may consult professionals if necessary to carry out their duties. However, creditors and heirs who believe an executor has not adhered to those duties may want to proceed to litigation.