When someone serves as the executor of an estate, it is their legal responsibility to the beneficiaries of the estate to carry out the terms of the will of the decedent. A will's terms express a deceased loved one’s wishes for the beneficiaries. These wishes may include what property each beneficiary may receive, and the manner and timing of receiving it. The executor’s primary duty is to distribute the property in the estate in accordance with the will.
Jump ahead to these sections:
- When Can an Executor Override a Beneficiary?
- Examples of an Executor Overriding a Beneficiary’s Wishes
- What Can an Executor Do When They Are Having Conflicts With a Beneficiary?
In many cases, the executor is usually someone the decedent trusts, and as a result, the decedent may give the executor some discretion in distributing property to one or more beneficiaries. However, if the beneficiary does not agree with how the executor is exercising their discretion, this can lead to conflict.
When there is conflict between an executor and a beneficiary, the executor usually has a legal right to make the decision to settle the conflict. But there are rules for resolving such conflicts, and the executor must abide by these rules.
When Can an Executor Override a Beneficiary?
When there is conflict between an executor and a beneficiary, the executor will almost always have the right to override the beneficiary as long as there is a basis for the executor’s decision in the will. There are two reasons why an executor may override the wishes of a beneficiary:
The executor must follow the terms of the will
The executor is obligated to do what the will says. Unless the will says to do something that is against public policy—like doing something wasteful or illegal—then the executor must follow the wishes of the decedent. Even if the executor doesn’t agree with what the decedent wants to do with their property or thinks there may be a better way to dispose of assets, the executor must do what the decedent intended.
Likewise, the beneficiaries are bound by the terms of the will. If they do not agree with what the decedent intended in the will, there is really nothing they can do about it. The executor and beneficiaries are all limited by what the decedent expressed in the will.
Additionally, an executor cannot update or amend the will or distribute property in a way that is not authorized in the will. Even if all the beneficiaries agree to receive their property in a certain way or at a certain time, the executor can override the beneficiaries’ decision if it is contrary to the terms of the will. The beneficiaries cannot insist that the executor do anything outside the terms of the will.
The executor must exercise proper discretion
Even if the will authorizes the executor to exercise some discretion in distributing property to beneficiaries, the executor must still act within the scope of the will. For example, a will can instruct the executor to distribute assets held in a bank account to the decedent’s children as they need it for educational purposes.
The executor may decide which grandchildren will receive money and when, but the executor may not give those assets to anyone other than the decedent’s grandchildren and may distribute assets only for their educational needs. If the grandchildren want the assets from the bank account for any other reason, the executor may override their decision because the executor is authorized in the will to exercise discretion.
When can an executor NOT override a beneficiary?
The same rule that limits the beneficiaries’ ability to demand a distribution that is contrary to the terms of the will applies to the executor. This means that if the executor attempts to distribute or manage the property in the estate in a way that contradicts the terms of the will and the beneficiaries object, the executor may NOT override the beneficiaries’ objection because the executor has a fiduciary duty to abide by the terms of the will.
There are two reasons why an executor would not be able to override a beneficiary’s request.
1. The executor does something that is not authorized in the will
An executor may wish to take certain actions that are not expressly authorized in the will, and the beneficiaries can also object or request that the executor follow the terms stated in said will. Because of the executor’s fiduciary duty to the will, the executor may not override the beneficiaries’ decision.
For example, suppose a deceased loved one instructs the executor not to sell the decedent’s antique car and instead preserve it until the decedent’s child is 21 years old, then distribute the car to the child. In this case the executor has a fiduciary duty to act according to the express terms of the will.
The executor could decide to sell the car to obtain more than it is worth, allowing the executor to distribute greater assets to the child. In this case, if the child who is to receive the car objects to the sale of the vehicle, the executor would not be able to override the child’s decision, because the executor is bound by the wishes of the decedent expressed in the will.
2. Following the terms of the will would violate public policy
Every person has a right to pass on their property at death as they see fit. However this is not an absolute right. The law does not allow someone to dispose of property in their will in a way that is illegal, wasteful, or against public policy.
As another example, even though it might be what the terms of the will express, an executor could not dispose of property by purchasing stolen property which is illegal. They cannot burn a house to the ground (wasteful) or condition a child’s inheritance on their not getting married or not practicing a certain religion, which is against public policy.
If these types of provisions were included in the will and the executor tried to fulfill the decedent’s intentions in these ways, the beneficiaries could object to the executor carrying out these wishes. A court can find any of these provisions in the will to be illegal, wasteful, or against public policy, making the executor unable to override the beneficiaries’ objections.
Examples of an Executor Overriding a Beneficiary’s Wishes
Notwithstanding the rare occasions when the terms of the will violate public policy, which would limit the executor’s ability to act, an executor usually has the right to override a beneficiary’s wishes. It can be much easier to do so when the executor can support that the actions taken are authorized by the terms of the will.
Example: selling stocks
Suppose a will provides for the executor to distribute proceeds from the sale of Stock A to Beneficiary 1 whenever the executor deems it to be financially prudent to do so. This provision gives the executor the discretion to determine the best time to sell Stock A.
However, if Beneficiary 1 wants to receive Stock B instead of Stock A because Stock B is a much more valuable stock, then the executor has the right to override the beneficiary’s decision because the will expressly provides for the executor to sell only Stock A.
It doesn’t matter that the decedent wants the beneficiary to benefit from the sale of stock and selling Stock B would be a greater benefit to the beneficiary than selling Stock A. The executor is obligated to do only as the will directs.
Likewise, suppose Beneficiary 1 is satisfied to receive the proceeds from the sale of Stock A but wants to sell the stock and receive the proceeds now. Even if the beneficiary believes this is the best time to sell Stock A so that they can receive the proceeds, the executor may override the beneficiary’s decision if the executor determines that this is not a financially sound time to sell Stock A.
The will legally authorizes the executor to exercise their discretion, and as long as they do so reasonably, the executor may override the decision of the beneficiary. It doesn’t mean that the executor is necessarily correct but it is possible because the will expressly provides for the executor to exercise their discretion.
Example: managing investments and income
Even if all the beneficiaries agree to dispose of property in a manner different than what is directed in the will, the executor may override the beneficiaries’ agreement. For example, suppose a will directs the executor to invest a sum of money and distribute the annual income from the investment to Beneficiary 1, and in five years, to distribute the money left in the investment to Beneficiary 2.
Beneficiaries 1 and 2 reach an agreement to dispose of the sum of money now and split the money equally. In this way, Beneficiary 1 will receive more money than just annual earned income for five years, and although Beneficiary 2 might receive less money, they do not have to wait five years to receive it.
In this case, both beneficiaries are content to split the money now, and they are still fulfilling the wishes of the deceased. However, notwithstanding the agreement of the beneficiaries and the benefits each would receive by distributing the money now, the executor could override their agreement because it does not precisely follow the intention of the decedent.
Unless the decedent authorized the executor to exercise discretion in distributing the money, the executor must follow the terms of the will.
What Can an Executor Do When They Are Having Conflicts With a Beneficiary?
It is not uncommon for an executor to have conflicts with beneficiaries in carrying out the wishes of a decedent. When this happens, the executor does not have to run the risk of acting improperly or being removed as executor. Instead, the executor may seek the direction of the probate court as to how to distribute property without violating their fiduciary duty to the beneficiaries.
The probate court, which oversees the executor’s management of the estate, can determine how the will should be interpreted, what the decedent intended, or what the rights of the beneficiaries may be. The executor may always act as they see fit if they are confident that they are following the terms of the will.
If they are unsure how to dispose of property, this is where probate court can be of help.
The Executor’s Duty Is Expressed in the Terms of the Will
Conflict between an executor and a beneficiary is not that unusual. But when conflict arises, the executor may rest assured that they are acting properly if they are following the terms of the will. If the executor is not sure how to interpret the terms of the will, they may seek the court’s direction.
The only time an executor may not override the wishes of a beneficiary is when the executor attempts to act in a way that is contrary to the express terms of the will, or if the terms of the will call for a disposition that is illegal, wasteful, or against public policy.