As an Atlanta probate attorney, I have assisted many clients with performing their duty as executor of an estate. The job of being executor can be difficult because fiduciary duty is not easily defined or understood, especially to a layperson. An executor’s position is defined in the law as being “of the highest trust and confidence to heirs at law, and [an executor] is required to act in entire good faith.” However, this is not a very specific description, and it’s difficult to know what constitutes “the highest trust.”
In order to better understand what a breach of fiduciary duty can be, we can look to the case Greenway v. Hamilton. Stanley Greenway was appointed the executor of his mother’s estate following her death. Greenway’s niece, Dina Hamilton, filed a petition for accounting following Greenway’s distribution of the estate. Greenway provided an accounting, to which Hamilton had objections. The probate court held a hearing on the matter and found that Greenway had breached his fiduciary duty, a position which was upheld by the Supreme Court of Georgia on appeal. Here are specific examples of how Greenway breached his duty:
- Greenway sold estate property to his wife for significantly less than it was worth. The estate contained property that was appraised at a worth of $19,500; Greenway sold it to his wife for $12,000. Greenway told the court that he “did not breach his fiduciary duty regarding the sale […] because all the law required of him was that he settle the estate expeditiously and with as little sacrifice of value as is reasonable.” However, the probate court found that the $7,500 discount in the sale of the property was “more of a sacrifice of value than was reasonable,” and that Greenway therefore breached his fiduciary duty.
- Greenway excluded funds that rightly belonged to the estate from his report of estate assets. Prior to his mother’s death, Greenway used a Power of Attorney she granted him to put his name on two of his mother’s bank accounts and a certificate of deposit. (To learn more about Powers of Attorney, read my previous blog post on the subject.) He then opened a new bank account in his name and his mother’s name on the day his mother died, into which he moved the funds over the next few weeks. Eventually, he removed the funds from the account for himself. He did not report these funds as estate assets, although Greenway had no ownership rights and the funds belonged to the estate. A Power of Attorney allows the agent to conduct transactions while the principal is living but does not grant the agent any ownership rights, meaning that funds automatically become property of the estate upon a principal’s death. Since Greenway wrongfully claimed the funds for his own by moving them into his personal account, he caused injury to the other beneficiaries of the estate while benefiting himself, thus breaching his fiduciary duty. (To learn more about joint accounts, read my previous blog post on the subject.)
As an experienced Georgia probate attorney, I have dealt with many cases in which an executor breached their fiduciary duty. If you would like assistance in performing your duty as executor, or if you believe an executor in an estate you’re involved in is breaching their fiduciary duty, please email me or call my Atlanta probate firm at (404) 445-7771.
