The executor, or personal representative of an estate, is a trusted individual chosen to oversee the distribution and management of an estate after the testator passes away. The law charges executors with a vital duty: to carry out the decedent’s final wishes with respect to his property and possessions. This is a legal duty that the law staunchly protects. A testator (the person who passed away) can name one or more trusted individuals to serve as an executor, and can even designate alternate executors in case the first-choice individual or entity proves unable or unfit to serve. Indeed, in some cases, an executor may lose the mental capacity to carry out his duties. This can cause a serious issue for the estate’s administration.
What Causes Loss of Capacity?
A loss of capacity could be physical, mental, or psychological. For instance, a person could lose capacity due to the onset of a mental condition like dementia, or because of an illness or accident that substantially changes the brain chemistry. Essentially, loss of capacity means that the executor is no longer mentally or physically capable of carrying out his or her duties in administering the estate.
There are many different signs that a person may be losing capacity. For instance, an executor may suddenly become confused about his or her role, may act erratically, or may suddenly start to act out of self-interest instead of in the best interest of the testator and the estate. Some signs might be fairly obvious and sudden, like a new medical diagnosis, while others might be more gradual like beginning to forget important information. In cases of dementia, one of the earliest signs is increased recklessness. Other signs of mental incapacitation include mistakes due to the mental impairment or being incapable of properly handling the financial manners.
When this happens, it’s advisable to reach out to an attorney to discuss the specifics and to see if the person needs to be tested for incompetency. There are official judicial proceedings that can determine whether someone should be adjudicated incompetent and as such, removed from his or her position.
Effects of Lost Capacity on Estate Administration
If an executor is losing capacity or incapacitated, it is wise to ask him or her to consider resigning from the role voluntarily before requiring further intervention from the testator, beneficiaries, attorneys, or the courts. Since wills are often drafted years and decades in advance, it is important to be mindful of the health of the executor(s) you name, and, if they are older, to consider naming co-executors or alternate executors if you do not want a court to decide who will step in to replace the person you originally chose.
The incapacitation of an executor can cause difficulties in probate with administering the estate. In the case the executor dies before the testator, the court will appoint a new executor if the will does not name a co-executor or alternate executors, or the testator can amend his will to name new executors. If an executor is losing capacity or has lost capacity following the testator’s death, the beneficiaries of an estate have the right to intervene if they feel the estate is not being properly managed or the executor is unable to carry out his or her duties satisfactorily.
Executors have fiduciary duties to the beneficiaries and being unable to uphold those duties could make an incapacitated executor liable. Absent the resignation of an incapacitated executor, the beneficiaries can file a petition with the court to remove the executor with strong and compelling evidence if they believe the executor’s cognitive or physical abilities or other factors prevent them from fulfilling their duties. The court will then hold a hearing to determine whether or not to remove or replace the incapacitated executor (or instate an alternate executor or make a co-executor the sole executor).
Choosing – or Replacing – an Executor
When looking for an alternate executor or a replacement executor, a testator needs to pick the right person or entity for the role who is legally able to serve. In North Carolina, a person may serve as executor if he or she is over the age of 18 and of sound mind.
The duties of an executor are not to be taken lightly, as they are legal responsibilities that can be costly for the estate, the executor, and possibly the beneficiaries if the executor acts in bad faith or irresponsibly. As such, it is important to carefully consider your choice. While you do not have to choose an attorney or an accountant, keep in mind that the executor will be required to shoulder some heavy tasks and should be able to confidently navigate the process. Depending on the complexity of the estate, you may want someone with additional background in legal or financial matters, as well as someone with high attention to detail and who is organized.
If you are concerned about an executor’s capacity or ability to fulfill his or her fiduciary duties, we can help you explore your options. Whether you need to have a serious conversation with an executor or consider finding a replacement, you should engage a professional with experience navigating thorny fiduciary issues rather than attempting to handle the process alone.