Guidelines for estate administration are thoroughly covered within U.S. federal and state legislative rules of estate. Strict rule limitations imposed on executors prohibit “self-interested” actions regarding the planning, execution, or distribution of an estates. The rules of U.S. federal and state estate laws statutory provisions specify the terms and conditions of an executor’s entitlement to an estate’s assets. The enforcement of estate laws in probate court cases in the past several decades, has led to further definition of their rules of executor administration. Estate executors can learn more about how trust funds can be used for purposes of investment growth, as well as the security of the assets under their control.
At the time an individual is appointed as an estate’s Executor, there is a transfer of powers of attorney to that designated person. Estate owners who have drafted a will with advance directives assigning executor status to a family member estate law attorney, or other designated estate representative, have an opportunity to make decisions about the administration of their accounts and assets upfront. Advance directives protect the wishes of an estate owner, so there is little confusion about the administration of finance and property assets in the future.
During the life of the estate, an executor is charged with the prudential responsibility of increasing its worth for the benefit of its owner and inheritors. An estate executor can also serve as trustee of a trust formed as part of the estate, a fiduciary responsibility corresponding with the management, growth, and distribution of those assets. To this end, estate finance can be used to catalyze the conditions for returns on those assets, as well as for any provision required to ensure the security of its trust until it becomes effective at time of the owner’s death, or in perpetuity should it continue.
An estate executor is obliged to act in the interest of its originator and named beneficiaries. Protection of the estate may involve defending or prosecuting actions on behalf of an estate where warranted. Such actions may include filing countersuit against beneficiaries, potential beneficiaries, or third parties such as creditors other plaintiffs seeking attachment, who have brought claims against an estate. Executors wishing to seek personal enrichment as part of the administrative process, must utilize their own funds rather than the estate’s funds to file such action to court.
Limitations imposed by both federal and state legislation defining rules of estate formation and administration, dictate self-interested actions taken by an executor are contrary claims. At no time may the designated party responsible for estate decision, act in self-interest to the extent that asset enhancement or protection is exclusively for the purpose of their own enrichment. Such an act is considered contrary to the interests of the estate’s beneficiaries within law.
If it is determined by a court that an executor of an estate has failed to uphold legal duty to the corpus of the estate, putative and financial damages may be the outcome. According to federal and state rules of estate, an executor found to have spent estate funds for self-enrichment, is subject to potential criminal conviction in addition to penalties and repayment of those funds to the rightful estate owner. Planned giving professionals will want to learn more about executor estate actions, and the consequences of contrary claims for nonprofit charitable giving strategies.
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Federal and state rules of estate impose strict limitations on contrary claims such as undue financial enrichment or other expense related self-interested action taken by an executor.
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