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How executors can protect themselves from legal exposure

On Behalf of | Apr 22, 2022 | Estate Planning

Maryland estate executors have a serious responsibility before them, often managing a great deal of wealth and being responsible to many people. This can present some risk, both legally or financially, if the executor fails to fulfill his or her duties appropriately. Fortunately, there are steps executors can take to manage risks and minimize their exposure. This includes: 

  • Fully understanding the fiduciary duty of an executor: Executors are legally obligated to act in the best interest of estate beneficiaries. This is known as a fiduciary duty. Executors should take the time to full understand all this duty encompasses, and they should take measures to demonstrate they are acting in an unbiased manner. 
  • Keeping accounts separate: When moving funds related to an estate, it is imperative to keep everything away from the executor’s personal accounts. Even with great record-keeping, this could look very problematic if ever a dispute arose. Keeping a dedicated account or accounts for the estate is very important in prevent legal exposure. 
  • Involve experts: Estate administration often involves a number of professionals, including an attorney, accountant, financial advisor, and occasionally, subject-matter experts like a real estate agent. Working hand-in-hand with licensed professionals is critical to minimizing exposure as an executor, as they can see around corners and provide assurances to beneficiaries. 

In short, protecting oneself from legal and financial risks as an executor is not only about doing the right thing but also about being able to demonstrate that everything was indeed above board. That means keeping the correct paperwork, working with experts and doing everything possible to show that the fiduciary duty was fulfilled. One of the first steps to take on this journey as an executor is to find a trusted Maryland estate attorney.