Estate Administration

Fiduciary Duty of Personal Representative

Lesikar v. Rappeport, 33 S.W.3d 282 (Tex. App.—Texarkana 2000, pet. denied).

 

Testator left his estate to Daughter One and Daughter Two, for life, and named them as co-executors. After a factually complex lawsuit involving estate property, the trial court determined that Daughter One breached her fiduciary duties to Daughter Two for engaging in a wide array of conduct relating to Testator’s estate. Daughter One appealed.

The court affirmed. The court discussed the duties Daughter One, as an executrix, owed to Daughter Two, as a beneficiary. The duty includes good faith, candor, and full disclosure respecting matters affecting Daughter Two’s interests. Merely because the daughters were in a strained relationship did not lessen Daughter One’s duties duty of full and complete disclosure. Daughter One cannot gain personal benefit from her position as co-executrix and cannot permit herself to be placed in any position where her self-interest conflicts with her obligations as executrix. The court meticulously examined the evidence and determined that it was sufficient to sustain the trial court’s holding that Daughter One breached her fiduciary duties. The court agreed that Daughter Two had not waived her right to complain and that a constructive trust remedy was appropriate.

Moral: A client should be leery of appointing co-executors. A testator probably believes that co-executors will provide a built-in check and balance protection for the administration of the estate. However, this is not the case because Probate Code § 240 permits each co-executor to act on his or her own except for the conveyance of real estate. This moral is well-presented by concurring Justice Ben Z. Grant who recommends amendment of this section to prevent "hydra-headed administration."



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