How to Sue a Personal Representative (Executor) for Breach of Fiduciary Duty in Michigan
If an executor in Michigan mismanages an estate, steals funds, or hides information, you can petition the probate court to remove them. Under EPIC, you can also demand a 'surcharge,' forcing them to repay the estate out of their own pocket.
When a person is appointed as a Personal Representative (commonly called an executor) of an estate, they are granted immense power over the deceased's assets. With that power comes a strict legal obligation. In Michigan, if the executor is secretly enriching themselves or ignoring the beneficiaries, they are violating state law. Using our USA Lawyer Directory to find a probate litigation attorney is highly recommended, but you must first recognize the signs of a fiduciary breach to protect your inheritance.
What Constitutes a Breach of Fiduciary Duty?
Under the Estates and Protected Individuals Code (EPIC), specifically Mich. Comp. Laws § 700.3703, a Personal Representative is a fiduciary. This means they must act in the utmost good faith, solely for the benefit of the heirs, and completely put aside their own personal interests. If they violate this standard, they can be held personally liable under Mich. Comp. Laws § 700.3712. The courts, such as the Oakland County Probate Court, Pontiac or the Washtenaw County Probate Court, Ann Arbor, take these violations very seriously.
Self-Dealing and Buying Estate Assets Below Market Value
Self-dealing is one of the most severe breaches. An executor cannot use their position to buy estate assets for themselves unless they have court approval or the consent of all beneficiaries. For example, if the deceased owned a classic car worth $40,000, the executor cannot "sell" it to themselves or their spouse for $5,000 just because they control the checkbook. The court views this as outright theft from the beneficiaries.
Embezzlement & Commingling Funds
An executor must keep estate funds entirely separate from their own personal money. Depositing an estate check into their personal checking account is called 'commingling' and is strictly forbidden. If an executor uses estate funds to pay their personal mortgage or take a vacation, that is embezzlement. Beneficiaries have the right to trace these funds and demand immediate repayment.
Unreasonable Delays in Distribution
While probate in Michigan can legitimately take 7 to 12 months, an executor cannot drag the estate out for years without a valid legal reason. Delays cost the estate money in ongoing property taxes, insurance, and legal fees. If an executor refuses to sell the house or distribute funds simply out of spite or laziness, the court can force their hand.
Failure to Keep Beneficiaries Informed
Under EPIC, beneficiaries have a right to know what is happening. The executor is legally required to provide an inventory of assets within 91 days of appointment and must provide ongoing formal accountings of every penny that comes in and goes out. If the executor ignores your calls and refuses to provide accounting documents, they are in direct breach of their statutory duties.
How to File a Petition for Removal and Surcharge
If the executor is causing harm, you must act formally. You cannot just call the judge. Your attorney will file a Form PC 604, Michigan, State Court Administrative Office, Petition for Removal of Personal Representative. Along with removal, your attorney will request a 'surcharge.' As established in cases like In re Estate of Thacker, 137 Mich. App. 253 (MI Court of Appeals 1984), a surcharge is a court order forcing the executor to personally reimburse the estate for the financial damage they caused.
Freezing Estate Assets via Emergency Court Orders
If you have proof that the executor is actively emptying bank accounts or is about to sell the family home to a friend for pennies, you cannot wait months for a hearing. Your attorney can file an emergency motion for a Temporary Restraining Order (TRO) or an injunction. If granted, the probate judge will immediately freeze the estate's bank accounts and suspend the executor's powers until a full evidentiary hearing can take place.
How Much Does Litigation Cost?
Holding a bad executor accountable requires aggressive litigation, but the court may sometimes force the bad actor to pay your legal fees if egregious fraud is proven.
| Court Filing Fee (Petition for Removal) | $20 (Motion fee on an open estate) |
| Attorney Retainer | $3,000 to $7,500+ depending on complexity |
| Forensic Accountant Fees | $2,000 to $5,000 (If needed to trace stolen funds) |
Frequently Asked Questions (FAQ)
Who pays the attorney fees if I sue the executor?
Initially, you must pay your own attorney to bring the lawsuit. However, if the court finds that the executor severely breached their duties or committed fraud, the judge can order the executor to personally reimburse your attorney fees.
Can the executor use estate funds to defend themselves?
Yes, generally an executor can use estate funds to defend their actions in court. However, if the court later determines they actually breached their fiduciary duty, they will be ordered to repay all of those legal fees back to the estate.
What happens if the executor spent all the money and is broke?
If the executor is insolvent, recovering the money is difficult. This is why many estates require the executor to post a 'surety bond' before they are appointed. If they steal the money, you can file a claim against their bond insurance policy to recover the funds.
Does the executor get paid even if they are removed?
Usually not. A judge has the authority to deny or reduce the executor's statutory compensation if it is proven that they breached their fiduciary duties or mismanaged the estate.
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