By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold, NJ Will Contest & Probate Litigation Attorney
The role of an executor or estate administrator when claims are made against the estate depends very much on the nature of the claim being alleged. When two or more beneficiaries are in conflict with each other during estate administration, the executor’s role is to remain neutral. It’s often easier said than done; staying neutral that is. The executor should provide information to all the beneficiaries equally about the value of the estate, and all matters relevant to the claim(s) being made whether favorable or unfavorable to one side, but otherwise should not “do battle” with the contestants. He or she should allow those who are the main beneficiaries fight it out.
Some issues arise when the executor is also a beneficiary of the estate. In that scenario, the executor effectively wears two hats, one as executor (neutrality) and one as beneficiary (having an interest). That’s always a tough role to play and may require you to either conflict out, petition to the court for instructions or resign your position.
An executor may however have a non-neutral role to play if, for example, there are unborn, minor (i.e. children under 18) or unascertained beneficiaries. The court has the power to appoint a fiduciary for someone (like a child) who is not capable of acting for themselves, and power to appoint a representative for numerous beneficiaries in the same class with the same interest.
As I mentioned, there are claims where an executor/trustee should remain neutral. The beneficiaries should litigate their claims, although the executor/trustee may and likely will be a party to any litigation. That’s because the interests of the Estate require representation.
A good example is when the terms of a Last Will are ambiguous and need to be interpreted. This issue will need to be decided by the court. If one interpretation of the Will favors beneficiary A but disadvantages beneficiary B, then the obvious parties to “do battle” are A and B. The executor clearly has an interest in the outcome because he or she needs to know how to administer the estate, but he/she should not take sides and should be neutral and not get involved.
At times there may be some genuine issues which need to be addressed in the administration of the estate or trust, which is not the fault of anyone. Alternatively a hostile internal dispute may involve a challenge by one party to the very validity of the Will or trust document, e.g. where a person claims that a Will is invalid.
In estate litigation a personal representative is generally indemnified out of the estate “for costs properly incurred”. Whether costs have been properly incurred depends on whether the executor acted in the interests of the estate or for the benefit of someone other than the estate. And second whether they acted in some way unreasonably in defending the proceedings.
To discuss your NJ Estate & Probate Litigation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.