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Court must determine if an executor acted inappropriately in managing estate assets – In re Account by Casaceli, 2010 NY Slip Op 33601 (N.Y. Surr. Ct., 2010)


In this case the court had to determine if the executor had engaged in activities that amounted to breaches of his fiduciary duty. An executor is a fiduciary with respect to an estate. This means that the executor must make decisions with respect to estate assets that are only in the best interest of the estate. An executor is not allowed to engage in self-dealing. This means that the executor is not allowed to make transactions involving estate assets that are in his or her interest.

The decedent, E. Casaceli, died on May 1, 2004, leaving a will which was admitted to probate on July 7, 2004. The decedent was survived by his four children, Gr. Casaceli, Ga. Casaceli, S. Casaceli, P. Smith. Gr. Casaceli was appointed executor. The will provided that each of the children except for Ga. Casaceli receive cash bequests of $45,000.00. The residuary estate was to be divided equally among the four children.
After Gr. Casaceli filed a final accounting, Ga. Casaceli filed objections to the accounting asserting that Gr. Casaceli made a number of questionable or unaccounted for transactions related to estate assets. Ga. Casaceli asserted that Gr. Casaceli took a $10,000 advance payment of commissions without an order of the court. He seeks a return of that money, plus interest. Ga. Casaceli also asserts that Gr. Casaceli made distributions to his company in the amounts of $100,000 and $20,000. While he repaid the $20,000, he did not pay interest, and thus, engaged in self-dealing by making an interest-free loan to his company. Further, Ga. Casaceli objects to receiving $66,285.00 less of his distributive share that Gr. Casaceli instead paid to himself.

Gr. Casaceli admitted that he did take $100,000.00 and $20,000.00 from the estate and paid it to his company, Cedar Pines. He then credited himself with the $100,000.00 as a distribution and eventually repaid the estate the $20,000.00. The court ordered that Gr. Casaceli pay the estate 9% statutory interest on the amount of $20,000.00 from the date taken until repayment. In addition, it required that he also pay 9% interest on the $100,000 advance. Typically, commissions are paid at the end of a probate proceeding, not in the middle. Further, the court takes the position that executors must first get court approval before taking advance commissions. Failure to do so is grounds for an automatic surcharge of 9% interest.

In addition, the accounting, as well as Gr. Casaceli’s own testimony shows that Gregory took $66,000.000 from Ga. Casacelil’s share as repayment for a personal loan he made to Ga. Casaceli. The court concluded that by doing so Gr. Casaceli acted in bad faith and in his own self-interest, and not in the interest of the estate as required. As a result, the court had the discretion to revoke his letters. The court declined to do so. Instead, it denied his commissions.

When it comes to probating an estate, it is not unusual for family squabbles to come into play. The executor, however, must put aside those squabbles and administer the estate in a manner that is consistent with the will or other estate document and that is consistent with the law. This means that the executor is required to seek court approval before taking certain actions. If he or she fails to do so, the court can take action. The action may include revoking or limiting the executor’s authority.

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