Houston Estate Planning and Elder Law Attorney Blog
Serving as an executor can feel like an administrative job until something goes wrong. In Texas probate, an executor can face personal liability if they mishandle estate funds, fail to follow required procedures, or treat estate property as their own for temporary use. Most executors are family members doing their best. Even so, good intentions do not erase fiduciary duties, and conflicts often arise when beneficiaries believe decisions were rushed, undocumented, or self-serving.
Texas also makes it easy to underestimate risk because independent administration reduces court supervision. Less supervision can speed things up, yet it also means an executor has to self-police deadlines, accounting, and decision-making without a judge checking each step.
Texas Executor Fiduciary Duties
An executor acts as a fiduciary. That role requires loyalty to the estate and fair treatment of beneficiaries under the will and the Texas Estates Code. Executors must safeguard assets, pay valid debts, manage property responsibly, and distribute inheritances in accordance with the will and applicable law.
Fiduciary duties create real exposure when an executor cuts corners. A beneficiary can ask a court to compel an accounting, seek removal, or pursue claims for losses caused by misconduct or negligence. Courts tend to focus on documentation, timelines, and whether the executor treated estate property with the care expected of a reasonable person.
Commingling Estate Funds and Personal Accounts
One of the most common mistakes is mixing estate money with personal money. Commingling can occur when an executor deposits checks into a personal account, pays estate bills from personal funds without tracking, or uses estate funds to cover expenses that also benefit the executor personally.
Even when the executor plans to “settle up later,” commingling invites suspicion and complicates recordkeeping. It can also complicate tax reporting and create disputes over reimbursements. A separate estate account with clear statements often prevents this problem.
Improper Distributions and Paying Heirs Too Soon
Executors sometimes distribute assets quickly to reduce stress, especially when family members are pushing for money. That approach can backfire if the estate later faces creditor claims, taxes, or litigation expenses.
Texas probate involves priorities. Valid debts and administrative expenses should generally be handled before final distributions. If an executor distributes too soon and the estate cannot pay its debts, the executor may have to chase heirs for repayment or cover the shortfall personally. Distributions should match the estate’s actual ability to pay obligations and still remain solvent.
Creditor Claims and Missed Notice Issues
Creditor handling is another area that creates liability. Some estates have clear debts, such as mortgages, medical bills, or credit card balances. Others have less obvious claims that surface later. Executors should understand which notices apply, when claims must be paid, and when claims can be rejected.
Mistakes can occur when an executor ignores creditor correspondence, pays the wrong claims first, or fails to preserve enough funds to address known obligations. A structured creditor review and careful documentation of payments can reduce risk.
Real Estate Risks and Property Management Problems
Texas estates often include a home or rental property. Real estate introduces practical hazards. Insurance lapses, property taxes, HOA issues, and basic maintenance can quickly lead to losses. A vacant home can invite vandalism or water damage. A rental property can bring tenant disputes and repair obligations.
Executors who delay decisions without a plan can face allegations that they allowed the property to deteriorate or lose value. Executors who rush into a sale without proper valuation can face criticism from beneficiaries who believe the property was undervalued. Keeping the property insured, securing it, and documenting valuation steps often reduces conflict.
Self-Dealing and Conflicts of Interest
Self-dealing is a major liability trigger. Problems arise when an executor buys estate property, uses estate assets personally, or makes decisions that favor the executor over other beneficiaries.
Some transactions can be lawful if the will authorizes them and the executor follows the required procedures. Many transactions become risky when they happen informally or without transparency. Even small decisions, such as taking personal property from the home before an inventory is clear, can lead to disputes that escalate into formal litigation.
Inventory, Appraisement, and Accounting Disputes
Texas probate often requires an inventory, an appraisement, and a list of claims, unless an exception applies. Beneficiaries also commonly request an accounting, especially when administration takes longer than expected.
Liability risk increases when records are incomplete. Missing receipts, unclear reimbursements, unexplained withdrawals, and vague summaries often lead to court involvement. Detailed spreadsheets, saved invoices, and consistent updates reduce suspicion and provide a cleaner record in the event of a dispute.
Taxes and Filing Deadlines
Tax issues can surface even in estates that do not appear taxable. Final income tax returns, estate income tax returns, and property tax obligations can all arise depending on the assets and timing.
Executors can face problems when they ignore tax notices, miss deadlines, or distribute assets before taxes are resolved. Coordination with a CPA can be important, especially when the estate includes investment accounts, business income, or rental property.
How Executors Can Reduce Personal Liability in Texas Probate
A risk-reduction approach starts with structure. Open a separate estate bank account. Keep receipts. Document every payment and reimbursement. Communicate major decisions in writing. Obtain valuations when selling significant assets. Avoid informal distributions.
Executors should also treat disagreements as a signal to tighten the process, not as a personal attack. When beneficiaries are anxious, transparency tends to calm the situation, while silence tends to escalate it.
Contact a Houston Probate Attorney
Executor liability concerns often arise when an estate includes real estate, competing beneficiaries, or unclear records. Houston, Texas Estate Planning & Elder Law Firm McCulloch & Miller, PLLC helps executors understand fiduciary duties, build clean documentation practices, and address disputes before they escalate into litigation. To schedule a consultation, call (713) 903-7879.