An executor cannot profit personally from the role, mix estate money with their own, ignore what the will says, pay bills or beneficiaries in the wrong order, skip tax filings, redirect assets that pass outside probate, or take major actions without court approval when approval is required. Those are the main things an executor cannot do, and each one carries real consequences: personal liability for losses, court-ordered repayment, and removal from the position. The specifics vary by state, but the core prohibitions are consistent across jurisdictions.
Profit From the Role
The most fundamental rule is that an executor cannot personally benefit from administering the estate beyond the compensation they are entitled to receive. Any transaction where the executor sits on both sides is treated as self-dealing, and courts take it seriously regardless of intent.
An executor cannot buy assets from the estate. Even at full market value, the arrangement puts the executor in the position of wanting the lowest price while being obligated to get beneficiaries the highest. Most courts will void the sale unless the will specifically authorizes it or a judge approves the terms after review. The reverse is also prohibited: an executor cannot sell their own property to the estate, because they control both the price and the approval.
Hiring yourself, or a business you own, to work for the estate falls into the same category. An executor who runs a contracting company and pays that company to repair estate property is setting the price and approving the invoice. Arrangements like this require prior judicial approval, and beneficiaries can challenge them after the fact. Any profit the executor extracted can be clawed back, and a pattern of self-dealing is grounds for removal.
Mishandle Estate Money and Property
Estate assets belong to the beneficiaries. The executor is a custodian, and that custodial role carries several specific limits.
Commingling Funds
Mixing estate money with personal money in a single account is one of the fastest ways to trigger a breach-of-fiduciary-duty claim. Once funds are commingled, the burden shifts to the executor to prove what is theirs. If they cannot, the entire balance can be treated as estate property. The fix is simple: open a dedicated estate bank account immediately after appointment and run every estate transaction through it.
Letting Property Deteriorate
An executor cannot let estate assets fall apart through inaction. Leaving a house uninsured, missing property tax payments, or skipping maintenance that would prevent further damage all breach the duty to preserve estate value.1Justia. Executor’s Breach of Fiduciary Duty Under the Law If neglect causes a loss, the executor can be personally surcharged for the difference between what the asset was worth and what it ultimately sold for.
Selling for Less Than Fair Value
Selling estate property for substantially less than it is worth, without a solid reason, is treated as mismanagement. A $20,000 car sold for $5,000 needs an explanation. Legitimate reasons exist: a deteriorating asset, carrying costs that outstrip waiting, or a lack of buyers after real marketing effort. But the executor carries the burden of justifying a below-market sale if beneficiaries challenge it.
Investing Imprudently
An executor managing estate investments has to balance risk and return across the whole portfolio, with the estate’s timeline and the beneficiaries’ needs in mind. Concentrating estate funds in a single speculative stock violates the duty to diversify. Losses caused by imprudent investment choices can fall on the executor personally.
Ignore or Rewrite the Will
The executor’s job is to carry out the will as written. If the will leaves a specific ring to one grandchild, the executor cannot give it to a different grandchild they think deserves it more. If the will directs that a house be sold and the proceeds split, the executor cannot keep the house in the family because they believe that is what the deceased would have preferred. Substituting the executor’s judgment for the decedent’s written instructions is a breach, and aggrieved beneficiaries can take it to court.
That extends to anyone the will names. An executor who dislikes a particular heir has no authority to reduce or withhold that heir’s share. The will controls. Courts can order the correct distribution, award damages for the delay, and remove the executor if the interference was deliberate.
Withholding Information From Beneficiaries
Beneficiaries have a right to know what is happening with the estate. An executor cannot refuse to answer reasonable questions about asset values, outstanding debts, timelines, or how shares will be calculated. Most states require formal accountings, which are itemized reports of money in, money out, and what remains. Failing to provide them when required, or stonewalling beneficiaries who ask basic questions, invites court intervention and can support a petition for removal.
Pay Debts and Beneficiaries in the Wrong Order
Every state sets a priority order for paying an estate’s obligations, and executors cannot rearrange it. Administrative costs, funeral expenses, and tax debts generally come ahead of unsecured creditors like credit card companies. An executor who pays a low-priority bill first can leave the estate unable to cover a higher-priority one, and the shortfall becomes the executor’s personal problem.
Distributing to beneficiaries before all debts, taxes, and administrative expenses are settled is equally prohibited. If an executor hands out inheritances early and the estate turns out to be insolvent, the executor may have to chase down the money or make up the difference out of pocket. The safer practice is to hold distributions until the claims period has closed and known obligations are paid.
Taking Excessive Compensation
Executors are entitled to be paid, but the pay has to be reasonable. Some states fix fees as a percentage of estate value on a sliding scale. Others leave the amount to the probate court based on complexity, time invested, and skill required. When the will specifies a fee, that amount usually controls. What an executor cannot do is unilaterally set their own pay, bill for work that was not performed, or take fees out of proportion to the actual effort. Beneficiaries can petition the court to review and reduce the amount.
Skip Tax Filings
Taxes are where an executor’s personal exposure is highest. The executor is personally responsible for the estate’s federal and state tax obligations, and ignoring them creates a direct claim against the executor as an individual.
The Returns That Have to Be Filed
If the estate’s value exceeds the federal estate tax exemption, the executor must file Form 706 within nine months of the date of death. A six-month extension is available by filing Form 4768 before the original deadline, but that extends only the filing date, not the payment date.2Internal Revenue Service. Frequently Asked Questions on Estate Taxes Missing the deadline brings penalties and interest that can land on the executor personally.
Separately, if the estate earns $600 or more in income after the date of death from interest, rent, asset sales, or other sources, the executor must file Form 1041, the estate income tax return.3Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 The executor should also file IRS Form 56 to notify the IRS of the fiduciary relationship.4Internal Revenue Service. About Form 56, Notice Concerning Fiduciary Relationship
Personal Liability for Unpaid Federal Taxes
Federal law gives tax claims priority over almost all other debts when an estate cannot pay everyone. Under 31 U.S.C. § 3713, if the estate is insolvent and the executor pays other creditors before federal tax debts, the executor becomes personally liable for the amount of those premature payments.5Office of the Law Revision Counsel. United States Code Title 31 – Section 3713 The IRS can pursue the executor directly under 26 U.S.C. § 6901, which gives a one-year window to assess the liability against the fiduciary.6Office of the Law Revision Counsel. 26 U.S. Code 6901 – Transferred Assets This is not a theoretical risk. Distributing to beneficiaries or paying general creditors before confirming tax obligations are satisfied puts the executor’s own money in play.
Touch Assets That Pass Outside the Will
One of the most common misconceptions is that the executor controls everything the deceased owned. They do not. Life insurance proceeds, retirement accounts with named beneficiaries, payable-on-death bank accounts, transfer-on-death brokerage accounts, and property held in joint tenancy with rights of survivorship all pass directly to the designated person by operation of law. The executor has no authority over these assets.
If a life insurance policy names a specific person, those proceeds belong to that person regardless of what the will says. The executor cannot claim the funds for the estate, redirect them to a different family member, or use them to pay estate debts. The same applies to a 401(k) or IRA with a named beneficiary. A beneficiary designation controls over the will. An executor who tries to intercept non-probate assets is acting outside their legal authority and can be sued by the rightful recipient.
Take Major Actions Without Court Approval
Even inside the probate estate, an executor’s power has limits. Routine administration like paying bills, collecting money owed to the estate, and managing bank accounts falls within independent authority. But certain significant actions require prior court approval, and skipping that step can void the transaction.
Selling real estate is the most common example. In many states, an executor must petition the probate court and get a formal order before selling a house or land, even when the will grants broad management authority. Some states allow executors to skip that step if they have been granted independent administration authority, but that power has to be specifically given, either in the will or by court order. Without it, a unilateral sale of real property is improper.
Settling lawsuits for the estate, signing long-term contracts, borrowing against estate assets, and abandoning estate property typically also require judicial sign-off. The common thread is that these decisions are hard to undo. An executor who skips approval does not just risk the action being reversed; they risk personal liability for any resulting losses.
What Beneficiaries Can Do About It
Every prohibition above has teeth because beneficiaries can ask a court to replace the executor. An interested party, usually a named beneficiary and in most states also a creditor, files a petition identifying specific legal grounds. Dissatisfaction with decisions or disagreements over strategy are not enough.
Grounds that courts recognize include mismanagement or waste of estate assets, self-dealing, failure to follow the will, failure to file required accountings, incapacity, conviction of a felony, and conflicts of interest that interfere with impartial administration. Evidence matters. Financial records, written communications, and documentation of the executor’s actions carry weight that bare allegations do not.
If the court finds sufficient grounds after a hearing, the executor is removed and a successor is appointed, either an alternate named in the will or someone the court selects. Courts can also freeze estate transactions while the petition is pending to prevent further damage. A removed executor can be ordered to return fees already collected and to personally repay losses their misconduct caused.