When a parent passes away, the person named as executor in the will is handed a new, demanding role—often while still grieving. You receive your Letters Testamentary from the Surrogate’s Court and assume the job is simply to gather assets and write checks. But the role is far more demanding. In my practice, I have seen well-meaning executors make critical errors that turn a straightforward estate administration into a contentious legal battle.
As an executor, you are a fiduciary. This means you have the highest duty of loyalty and care under New York law. A breach of that duty, even an unintentional one, can result in personal liability. The court can surcharge you, forcing you to repay the estate for losses from your own pocket. Understanding the common pitfalls is the first step in responsible stewardship.
Mismanaging Estate Assets
One of the first duties of an executor is to identify, collect, and safeguard the decedent’s assets. A frequent and serious error is co-mingling personal funds with estate funds. You must open a separate bank account—an estate account—where all the decedent’s liquid assets are deposited. All estate expenses must be paid from this account. Using estate funds for personal expenses is a clear breach of duty, but even temporarily depositing estate checks into your personal account creates a presumption of impropriety that is difficult to overcome.
Another common mistake is failing to properly value and manage property. Selling a family home in Brooklyn to a friend for a “good price” without a formal appraisal, or holding onto a volatile stock portfolio as it plummets, can expose an executor to liability. The law requires prudence. You must act as a reasonably prudent person would in managing their own affairs, which includes getting professional valuations and making deliberate, documented decisions about assets.
Improper Distributions and Payments
Beneficiaries are often anxious to receive their inheritance, and an executor may feel pressured to distribute assets quickly. This can be a disastrous mistake. New York law sets out a specific order for paying estate debts. Funeral expenses, administration costs, and taxes must be paid before any distributions are made to beneficiaries. If you distribute assets prematurely and an unexpected tax bill or creditor claim arises, you may be held personally responsible for the shortfall.
I’ve seen cases where an executor paid a family loan before satisfying a credit card debt, only to find the estate was insolvent. The credit card company could then pursue the executor directly. The prudent path is to wait until the statutory seven-month period for creditors to file claims has passed and all tax obligations are settled before making final distributions.
Ignoring Fiduciary Duties and the Law
The role of an executor is governed by a strict set of legal duties. These are not suggestions—they are mandates. The core duties are loyalty, prudence, and impartiality. An executor cannot engage in self-dealing, such as selling estate property to themselves or hiring their own company to perform services for the estate, without court approval or the informed consent of all beneficiaries.
New York’s Estates, Powers and Trusts Law (EPTL) is clear on this. EPTL § 11-1.7 explicitly voids any clause in a will that attempts to grant an executor immunity from liability for failing to exercise reasonable care and prudence. The law holds fiduciaries to a high standard for a reason: they are stewards of someone else’s legacy. Acting without understanding these duties is not a valid defense.
Here are seven of the most common—and costly—errors we see in our practice:
- Failing to Create an Inventory: Not creating a detailed, dated inventory of all assets and their values at the time of death.
- Paying Creditors Out of Order: Satisfying general creditors before priority debts like taxes and administrative expenses are paid.
- Making Premature Distributions: Distributing assets to beneficiaries before the creditor claim period has expired and all liabilities are known.
- Co-mingling Funds: Mixing personal money with estate funds in a single bank account.
- Engaging in Self-Dealing: Using the position as executor for personal benefit, such as buying estate assets at a discount.
- Failing to Communicate: Keeping beneficiaries in the dark about the estate’s progress, which breeds suspicion and often leads to litigation.
- Ignoring Professional Advice: Attempting to manage an estate with real estate, investments, or business interests without guidance from legal and accounting professionals.
Each of these mistakes can lead to delays, unnecessary expenses, and petitions filed in Surrogate’s Court to compel an accounting or remove the executor. What should be a process of honoring a legacy becomes a source of family conflict and financial loss.
Serving as an executor is an act of trust, but it is also a significant legal undertaking. It is not a task to perform alone or on assumption. The duties are precise, and the consequences of error are real.
If you have been named as an executor for a New York estate and are uncertain about your responsibilities, the most prudent first step is to understand the scope of your role. Our firm offers a one-hour Fiduciary Kickstart session where we review the will, outline your immediate legal duties, and help you create a roadmap for an orderly and proper administration.
