Executors and the value of an estate: what to know

Many wills and estate plans only call for an executor to preserve the assets of the estate. Executors have no obligation to do anything to actively increase the value of an estate’s property and assets. However, as Marketwatch explains, there have been executors who have tried to boost the value of the estate, perhaps because they may end up benefiting from it. However, this is a risk that New York executors should not take, as it could open an executor up to being held liable by the beneficiaries of the estate.

Major risks emerge if an executor tries to invest estate assets to generate an increased return. If an executor tries to put assets in a stock portfolio that loses value, the estate loses money. This would result in a possible loss to beneficiaries if there is no money left in the estate to fulfill the inheritance that the beneficiaries are meant to receive. The executor would then likely face litigation for the loss of the money.

Executors might try to increase estate value in other ways. A home improvement project to a house owned by the decedent, for example, could boost the house’s value. However, the executor must investigate whether the assets of the estate can be utilized for improvement projects. If not, even if the project results in the home being worth more money, the use of estate funds may still qualify as depleting estate assets.

Mishandling estate assets by depleting them is, according to New York state law, grounds for the executor to be removed from the duties of the office. So if an executor has committed actions that qualify as having “wasted or improperly applied” the estate’s assets or invested the assets in an illegal manner, the executor is deemed unfit to handle the duties of executor. And if there is loss to beneficiaries, the executor could also face litigation and possible penalties.

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