Penalties for Executors Due to Attorney Fault


A recent court ruling serves as a reminder of the personal financial liability executors may face even when they retain a probate attorney. Executors may be held legally responsible for errors in estate administration. Their actions may range from unintentional blunders, like failing to meet a filing deadline or recording an accounting error, to willful negligence, to intentional mismanagement of funds or other acts of fraud. The latter may yield criminal charges. Many executors seek legal counsel with a probate attorney to ensure compliance with laws and regulations throughout the administrative process. However, who is responsible when the executor’s attorney makes an error? The executor, according to Specht v. United States.

Specht v. United States involved an estate administered by the decedent’s surviving cousin Janice Specht. Specht accepted the role despite a seeming lack of knowledge and qualifications to serve as executor; she had no formal legal knowledge, higher education, or prior experience serving as executor, according to Bloomberg. To make up for her lack of legal expertise, Specht took a practical approach and hired a probate attorney. Unfortunately, she was unaware that the attorney suffered cognitive decline due to brain cancer. The attorney failed to file the estate tax return, pay the estate tax due, and provide accountings. While Specht received reassurances from the attorney, she also received probate court and tax department notices alerting her that filings and payments were due, as well as warnings regarding the probate attorney’s incompetence from family and independent counsel. The court found that Specht remains liable for the attorney’s wrongdoings. Even though the attorney’s health was out of her control, she, as executor, was obligated to supervise the attorney’s actions.
If errors occur, an executor may not only be obligated to pay personally for the amount owed, but they may be liable for penalties and interest. Learn more about the Downsides to Serving as Executor.
An executor has a few options to prevent complications like those described above and minimize their financial risk. For one, the individual could refuse to serve as executor. This removes the burden entirely and places it on another party. Another approach may involve careful scrutiny of an attorney’s credentials. To help ensure an attorney’s actions are carried out properly, the executor could request written evidence confirming the attorney’s administration steps (such as copies of filed documents, postal receipts, etc.).
Some individuals feel compelled to fulfill executor duties after learning a loved one appointed them in a will. This does not necessarily mean the named individual is best suited for the role or knows how to manage the estate administration. Learn about the first steps for executors to observe in North Carolina probate.



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