In the event that an executor or administrator fails to properly account or otherwise fails to properly exercise his or her fiduciary duty to the beneficiaries of an estate, an application may be made seeking his or her removal from office and a replacement appointed. An executor or administrator can be removed for failure to properly invest assets, breach of fiduciary duty, failure to distribute assets and for committing waste. An action is brought by way of complaint seeking judicial intervention and to the extent supported by affirmative certifications, will be heard. The executor or administrator is required to respond appropriately and although the costs will likely be attributed to the estate, such a filing is a very effective means of forcing an executor or administrator to act, or to prevent an executor or administrator from committing further waste.
Removal of Executor – Grant of Commissions and Legal Fees
In the Matter of the Estate of Geraldine Parks, Deceased, 2011 N.J. Super. Unpub. ____ (Docket No.: A-5673-09T4) (App. Div. 2011). On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Sussex County. Before Judges Fisher and Fasciale.
Plaintiff, a beneficiary of the estate, appeals the trial court’s order granting commissions and legal expenses to her brother who was removed as executor of their mother’s estate. On appeal, the Appellate Division remanded the matter for clarification on the trial court’s grant of commissions and legal expenses.
Decedent died in 2008 leaving a will which devised her property in equal shares to her 6 children. 2 of her children qualified as executors of her estate. In administering the estate, 1 of the co-executors misapplied funds for his own benefit. Due to difficulties in the administration of the estate, the other executor, plaintiff, filed a complaint seeking removal of the co-executors, appointment of a third party administrator and reimbursement for certain expenses.
The judge removed the executor who misappropriated funds, and also removed the plaintiff, requiring an informal accounting within 60 days. A third party attorney was appointed as substitute administrator. The informal accounting was provided and at a subsequent hearing on the accounting, the court accepted the accounting provided that the co-executors were not entitled to any reimbursement of legal fees or commissions other than reimbursement for fees in connection with the appointment of the administrator following the removal of the executors. Plaintiff filed a motion for reconsideration seeking reimbursement of all his fees and commissions, claiming that he was being prejudiced by the misappropriation of his co-executor. The court agreed and awarded legal fees and commissions. On appeal, the Appellate Division remanded the matter seeking clarification from the court on its rationale in awarding fees and commissions to the plaintiff.
Executor – Breach of Fiduciary Duty
Conforti v. Faccone, 2010 N.J. Super. Unpub. ____ (Docket No.: A-0017-09T3) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Union County. Before Judges Reisner and Yannotti.
This matter arises out a dispute between the families of two children of the Decedent who were her residuary beneficiaries. In 1994, Decedent deeded her house to her two children, Rita and Peter, reserving a life estate. In 2002, Decedent executed a will leaving her entire estate to a revocable trust, with her two children as the residuary beneficiaries. Decedent added assets to the trust during her life. In 2004, just prior to her death, Decedent resigned her duties as trustee of the revocable trust. Her daughter, Rita, then became the trustee. Soon after her appointment, approximately $133,000 was withdrawn from the trust. The Decedent then passed away later that year.
After Decedent’s death, Rita failed to distribute the trust assets and did not sell the house. Instead, she and her husband sought to buy the house at a reduced rate from her brother, Peter, who refused. Although the house was not in the trust, and remained vacant, Rita withdrew substantial amounts from the trust to maintain the property, and also paid her husband and sons for cleaning and maintaining the house. In 2006, Peter filed suit seeking an accounting. Rita then made some distributions to grandchildren of the Decedent pursuant to the terms of the trust but refused to list the house for sale or to distribute Peter’s share of the trust. The house was finally sold in 2008, but the funds were held in escrow.
The trial court concluded that Rita unreasonably delayed the sale of the house and that the expenses to her husband and children for maintaining the house were overinflated. The court ordered reimbursement of 50% of those expenses, and surcharged Rita for the failure to distribute stock, which lost value. The court also awarded commissions and refused to award any attorneys’ fees as both parties sued for their own benefit. The court’s decision was upheld on appeal.
Removal of Personal Representative
In the Matter of the Estate of Howard C. Hope, Sr., deceased, 2010 N.J. Super. Unpub. LEXIS 329 (Docket No.: A-2988-08T3) (App. Div. 2010). On appeal from the Superior Court of New Jersey, Chancery Division, Camden County. Before Judges Cuff, Payne and C.L. Miniman.
Plaintiffs appealed the lower court’s denial of their application to have the court appointed Administrator CTA of the Estate removed.
Decedent died testate. In his Will, he named a son as executor and devised to him all of his personal property. The remainder of his estate was to pass in equal shares to his four children.
In July of 2003, one of the children filed an application to have his brother – executor removed for failure to distribute real estate owned by the estate. This application was granted and the court appointed an Administrator CTA to act on behalf of the estate.
Another application was filed requiring the Administrator CTA to distribute real estate owned by the estate in kind to the beneficiaries. The court ordered the Administrator CTA to sell the property and an appeal was taken. The appellate court upheld the court’s decision to have the property sold as it was impracticable to distribute same in kind. The Administrator CTA proceeded on a contract of sale which was objected to by the Plaintiffs.
Plaintiffs filed a motion seeking to remove the Administrator CTA, which was denied. The court found that the Plaintiffs had unclean hands and had notice of the contract for many years, and applied the doctrine of laches The court’s determination was upheld. The Administrator CTA did not abuse his discretion, acted in good faith and kept the Plaintiffs adequately informed of the Contract of Sale and the property.
Removal of Executor
In re Estate of John H. Hnat, 2009 N.J. Super. Unpub. LEXIS 103 (A-4672-07T2) (App. Div. 2009). Before Judges Carchman and Simonelli.
Issue: Was the removal of the Executrix under a Will based on perceived hostility and friction between the parties proper in light of the lack of any evidentiary support?
Holding: No. In this matter, the trial Court failed to hold a plenary hearing before removal of the Executrix and the appointment of a third party administrator. There was no proof that any of the reasons for removal set forth in N.J.S.A. 3B:14-21 existed. There was no proof of fraud, gross carelessness, lack of good faith or proof that the Executrix’s illness prevented her from properly administering the Estate. The Court removed the Executrix due to “assumed friction and hostility between the parties”, which is not necessarily sufficient grounds for removal. Since there was no evidence of such hostility or friction between the parties, or any of the other factors enumerated above, the Court’s removal of the Executrix was reversed.