What is a personal representative’s liability regarding losses that they created for the estate?

My mom died without a Will. My sister was elected to act as executor. Against my wishes she decided to have a car repoed instead of selling it but I had a buyer. This resulted in a $8,000 debt being filed against the estate. Her decision was to ignore the debt and refused to sell the house, the only remaining asset. After several months of fighting over it, she sold the house. At this point $14,000 was held back to pay the debt, still she refused to pay it. After 10 months she has made an offer to settle, if the debtor refuses to settle and is successful at collecting, can the executor be sued for the loss?

Asked on December 9, 2015 under Estate Planning, Mississippi

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, an executor can be sued for losses she caused the estate (e.g. sued by a beneficiary who therefore received less than he/she should have), but will not be liable if the executor's actions were within the spectrum of being "reasonable" even if there were not optimal or were, in retrospect, unwise. Only if at the time the executor made the decisions, they were unreasonable (no reasonable person would have done what he/she did) might the executor be liable. Typcally, if you want to pursue such an action, you would bring the action in chancery court, seeking an "accounting" of the executor's actions. Such an action is more complex than, say, suing in small claims for property damage or an unpaid bill; you are advised to consult with an attorney who does probate work.


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