In Estate Case, Executrix Failed to Properly Account for Profits on Estate’s Property, Leading Master-in-Chancery to Conclude that Executrix Breached Her Fiduciary Duties
In the matter of the Estate of Ruby L. Wiggins, Register of Wills Folio No. 171196 (March 29, 2022)
In this case, Master Molina ruled on exceptions filed by grandchildren of the decedent (the “Exceptants") concerning decisions made by the Executrix in regard to the Estate of Ruby L. Wiggins. The Exceptants filed two exceptions: (1) failure to list the rental income; and (2) lack of clarity regarding the disposition of the 2002 Chrysler (the “Vehicle”).
The Exceptants argued that the Executrix improperly asserted control over real property and that she be surcharged $5,333.34 from her estate share. The Exceptants sought an order compelling the Executrix to sell the Vehicle and to make a final accounting disclosing the sale proceeds of the vehicle as well as the rental income received. The Exceptants also requested the shifting of legal fees.
In Delaware, the executors/executrix’s of estates act as fiduciaries and their duty is to carry out the decedent’s wishes expressed in the will. Executors/Executrix’s owe a duty of loyalty and care to the estate’s beneficiaries. The Master found that the Executrix, though acting without malice, breached her duties to the estate and beneficiaries by renting out the decedent’s real property, failing to account for the resulting rental income, and failing to distribute the pro rata share to other beneficiaries.
Court of Chancery Rule 198 states that personal representatives bear the initial burden of demonstrating an account is properly prepared. But, the burden shifts to the Exceptant if they seek a surcharge.
Regarding the rental income issue, the Master found that the Executrix was required to pay the rental income into the estate, including the surcharge of one-third of the uncollected rent, for a total amount of $4,566.67. Regarding the Vehicle, the Master ordered that the Executrix sell the Vehicle within thirty days of the final order.
The Executrix also asked that the Exceptants be required to contribute their share of estate and funeral expenses. The Master granted this request in part. While finding that the Exceptants are not compelled to pay estate or funeral expenses, the Master held that equity dictates a reduction in the Exceptants’ share of the estate to cover certain expenses.
The Master recommended finding that there be no shift in legal fees because no exception to the “American Rule” applied. Specifically, the Master found that the Executrix did not act in bad faith.
The Master also required the Executrix to propose a final accounting reflecting rental income and Vehicle sale proceeds. Once approved, the Executrix is to distribute the Estate into thirds between Ms. James (who is the Decedent’s daughter and the Executrix’s sister), the Exceptants (collectively), and the Executrix.
