When Can a Personal Representative be Replaced?
When a personal representative mishandles estate affairs, the superior court may intervene, upon the request of a person interested in the estate. Interested persons may bring a petition for a report on the affairs of the estate (RCW 11.68.065) or a citation (RCW 11.68.070, 11.96A.060) in which proceeding the court issues a show cause order to the personal representative to answer the well-documented allegations of the interested party. The court may limit or revoke a personal representative’s non-intervention powers, under appropriate circumstances, or even replace the personal representative. Adequate reasons for removing a personal representative are waste of estate assets, embezzlement, mismanagement of estate assets, or any other reason satisfactory to the court. RCW 11.28.250.
As a fiduciary, a personal representative can be removed for waste, embezzlement, mismanagement, fraud, and for any other reason the court deems sufficient.
In re Estate of Jones, 152 Wn.2d 1, 92 P.3d 147 (2004).
Marcella Jones left her estate to her four sons equally. Russell Jones, one of those sons, was named personal representative of his mother’s estate. The brothers attempted to split up the estate’s property, but failed, due to decades-old conflicts among them. Russell lived in his mother’s house after her death, paid no rent, utilities, property taxes, or insurance. Russell deeded the residence to himself with scant concern about its fair market value, and without agreement of his brothers. Russell also drove the estate vehicle 17,000 miles. He re-valued the estate piano in a questionable manner. Russell commingled estate funds with his personal monies. Russell refused to account for the estate or provide its inventory values. Another brother colluded with Russell in these misdeeds.
The remaining two brothers repeatedly tried to compel Russell to withdraw, account, and provide an inventory. They also filed suits for fiduciary breach against Russell. Consolidating these several actions at trial, the court removed Russell as personal representative. The appeals court reinstated him. The Supreme Court removed him again, harmonized the various statutory removal provisions, and awarded the two challenging brothers attorney’s fees from Russell personally. Even after judgment, Russell failed to account for the estate assets.
A removed personal representative must account to the court for his management of financial assets during his tenure, and deliver all assets and paperwork of the estate to the successor personal representative. RCW 11.28.290. In probate matters, a court may assess the attorney’s fees and costs of the proceedings to any party involved or the estate. RCW 11.96A.150. It is likely that a court will assess (surcharge) to a personal representative whose actions have damaged an estate a sum sufficient to make the estate financially whole, which sum shall be paid from the personal representative's own pocket. Baker-Boyer Nat'l Bank v. Garver, 43 Wash. App. 673, 686, 719 P.2d 583, review denied, 106 Wn.2d 1017 (1986). See also RCW 11.106.070.
Non-intervention personal representatives may adjust assets beween principal and income as needed, subject to the prudent investor rule and all the circumstances of the estate and its beneficiaries, and the limitations on fiduciary investing contained at RCW 11.104A.010. RCW 11.104A.020. Violations of these investment rules, especially where the personal representative's acts are done in bad faith and without honest judgment, may well constitute mismanagement of estate assets and may contribute to a court's motivation to replace a defalcating personal representative.
An interested party may also bring a TEDRA petition (Trust and Estate Dispute Resolution Act), by which means an interested party can compel a personal representative to mediate issues that have arisen and/or to arbitrate those same issues. RCW 11.96A.260-320. Any such action must be brought before the personal representative has been discharged from his or her duties. RCW 11.96A.070.
At Lancaster Law Office, we find that most estate disputes mask underlying family arguments and distrusts. We encourage voluntary mediation of these issues, and, when appropriate, the involvement of collaboratively trained professionals to facilitate that mediation.