What Can You Do if the Personal Representative is Mismanaging the Estate?

The personal representative of a decedent’s estate serves a crucial role in the administration process. Unfortunately, when a personal representative is dishonest or disloyal, conflicts can arise that cause significant delay and a considerable amount of tension. It’s important to understand that a personal representative has a duty to act in the best interests of the decedent’s estate — and the beneficiaries. If they fail to act in accordance with their obligations or mismanage the estate, a beneficiary may be able to pursue legal recourse.

What are the Duties of a Minnesota Personal Representative?

A personal representative in Minnesota has a number of duties and responsibilities when it comes to probating a decedent’s estate. In addition to meeting all applicable deadlines and filing requirements, they must determine who the interested parties are and serve them with notice regarding the probate case. The personal representative is also responsible for taking inventory of the assets and obtaining a valuation of the property in the estate.

The personal representative of an estate must also assume responsibility over the decedent’s assets. While they do not need to take physical control of the property, it may be necessary to ensure that the property and assets are secure. They must ensure any and all tax returns required from the estate are filed in a timely manner and pay debts in order of the priority set forth by statute. Importantly, the personal representative is required to account for all activity — including income received and expenses paid by the estate — in a final accounting.

The probate process must be completed for most estates in Minnesota within 18 months, unless an extension is filed with the court.

How Can a Personal Representative Mismanage an Estate?

A personal representative has a fiduciary duty throughout the estate administration process to act in the best interests of the estate and the beneficiaries. Failure to do so can result in a breach of fiduciary duty, for which they may be held liable. Critically, there are many ways a personal representative may mismanage an estate or commit a breach of fiduciary duty.

Some common examples in which a breach of fiduciary duty can arise include the following:

• Using funds to make investments that benefit them instead of the beneficiaries
• Not properly maintaining the decedent’s property
• Failing to distribute funds to the beneficiaries, per the decedent’s instructions
• Missing court appearances or filing deadlines
• Failing to communicate with beneficiaries regarding the estate
• Engaging in reckless financial transactions using funds owed to beneficiaries
• Mishandling property and funds in the estate
• Artificially inflating their fees in order to receive more compensation

A breach of fiduciary duty can also arise if the personal representative fails to disclose relevant facts about the estate. They are legally obligated to remain transparent and act in good faith. In the event a personal representative breaches their fiduciary duty, they may be suspended, removed, or subject to other penalties.

What Can You Do if a Personal Representative Breached Their Fiduciary Duty?

A personal representative has an obligation to bring the estate to a conclusion in a timely manner and maximize the inheritance of the beneficiary. When beneficiaries or other parties with a legal interest in the decedent’s estate believe the personal representative has not adhered to their fiduciary duties, they can file a petition with the probate court requesting removal. The petition should outline the legal reasons removal is requested.

A beneficiary may also have the right to obtain a court order forcing the fiduciary to provide a formal accounting. The formal accounting must be in a specific format and provide detailed information concerning each asset in the estate. If the judge finds that the breach of fiduciary duty caused financial harm, the judge may surcharge the fiduciary. This means that if the personal representative is found to have mishandled the estate, they must refund the estate from their own funds. This typically arises in cases involving embezzlement, commingling of estate assets, self-dealing, and as a result of losses created by the personal representative.

Contact an Experienced Probate and Estate Litigation Attorney

If you are the beneficiary of a loved one’s estate and have reason to believe the personal representative has mishandled its assets, it’s vital to consult with a skillful probate and estate litigation attorney. At Dave Burns Law Office, I provide experienced counsel for Minnesota will contests and a wide variety of probate issues. If you would like to discuss a probate litigation matter, I welcome you to contact me at (612) 677-8351 or by emailing dave@daveburnslaw.com. I assist clients throughout the Twin Cities metro area and am available to meet with clients in both Minneapolis and St. Paul.