Virginia Executor and Trustee Duties: What Fiduciaries Must Do (and How to Avoid Personal Liability)
- Phoenix S. Ayotte, Esq.
- 8 hours ago
- 7 min read
You've been named as an executor of an estate or trustee of a trust in Virginia. You're wondering: "what are my legal responsibilities? Can I be held personally liable if I make mistakes?
The answer is yes.
Executors and trustees owe fiduciary duties under Virginia law, meaning they must act in the best interests of the beneficiaries and manage assets carefully, honestly, and in accordance with the law.
Many people accept these roles because a loved one trusted them. Unfortunately, good intentions alone are not enough. Executors and trustees can face disputes, lawsuits, court intervention, and even personal financial liability if they fail to properly perform their duties.
In this guide, I explain the duties of executors and trustees, common mistakes to avoid, and practical steps that can help protect both beneficiaries and fiduciaries.
What Is a Fiduciary?
A fiduciary is a person who has been entrusted with managing money, property, or legal affairs for the benefit of another person. The law holds fiduciaries to a higher standard because beneficiaries are relying on them to act responsibly and in good faith.
Common fiduciary roles include executors, trustees, agents acting under powers of attorney, conservators, guardians, and personal representatives of estates.
At its core, fiduciary responsibility means putting the interests of the beneficiaries ahead of your own interests.
What Is an Executor?
An executor, also called a personal representative, is the person named in a will to administer a deceased person's estate.
An executor's responsibilities typically include identifying assets, securing property, paying debts, filing tax returns, communicating with beneficiaries, handling probate proceedings, and distributing assets according to the will.
For example, if a parent dies owning a home, several bank accounts, and investment assets that pass to three children, the executor is responsible for gathering those assets, paying legitimate expenses and debts, and ensuring the inheritance is distributed correctly.
What Is a Trustee?
A trustee manages property held in a trust for the benefit of one or more beneficiaries.
Unlike an executor, whose role often ends once the estate is settled, a trustee's responsibilities may continue for many years.
For example, a trust may provide that children or loved ones receive distributions for health, education, maintenance, and support until they reach a certain age or milestone. The trustee must manage investments, make appropriate distributions, maintain records, and protect trust assets throughout the life of the trust.
Fiduciary Duties That Apply to All Fiduciaries
Whether serving as an executor, trustee, conservator, or agent under a power of attorney, every fiduciary owes several core duties.
Duty of Loyalty
A fiduciary must always act in the best interests of the beneficiaries and avoid conflicts of interest whenever possible.
For example, imagine an executor needs to sell a vehicle or piece of art owned by an estate. The executor should not simply purchase the vehicle/art for themselves at a discounted price because they like it. Instead, the executor should seek fair market value for the benefit of all beneficiaries.
One of the fastest ways for fiduciaries to find themselves in legal trouble is engaging in self-dealing or creating the appearance of self-dealing.
Duty of Care
Fiduciaries must act prudently and exercise reasonable care when managing assets.
Consider a trustee responsible for managing $500,000 for minor children. Leaving the funds in a non-interest-bearing checking account for several years may expose the trustee to criticism, if a prudent investment strategy would have better protected and preserved the assets.
The law does not require perfection. It does require diligence, attention, and reasonable judgment.
Duty to Follow the Governing Documents
Executors must follow the will. Trustees must follow the trust agreement. A fiduciary cannot substitute personal preferences for the instructions left by the person who created the estate plan.
For example, if a trust permits distributions only for education expenses, a trustee cannot decide to fund a luxury vacation simply because they believe it would benefit the beneficiary. Likewise, a trustee cannot accelerate, or withhold distributions if they are not empowered with the discretion to do so.
Duty of Impartiality
When multiple beneficiaries exist, fiduciaries must treat them fairly.
Suppose three siblings inherit equal shares of an estate. An executor should not provide extensive information to one sibling while refusing to communicate with the other two. Likewise, a trustee should not favor one beneficiary simply because they have a closer personal relationship- or because they perceive that their requests or needs are "more reasonable."
Duty to Keep Records
Every fiduciary MUST maintain detailed records of all financial activity.
Beneficiaries frequently ask questions months or years after decisions have been made. Accurate documentation can prevent misunderstandings and provide protection if disputes arise.
A good rule of thumb is simple: if money is moved, document it.
Duty to Account
Beneficiaries are generally entitled to receive information regarding the assets being managed on their behalf. Fiduciaries should expect to provide financial information, accountings, and explanations of significant decisions when requested. This can be done with the aid of professionals (CPAs, lawyers, etc.)
Transparency often prevents conflicts before they start.
Additional Duties of an Executor in Virginia
While executors share many fiduciary duties with trustees, they also have responsibilities unique to probate administration.
Identifying and Protecting Estate Assets
Executors must locate, collect, and safeguard estate property. This includes bank accounts, investment accounts, vehicles, real estate, business interests, personal property, and other assets owned by the deceased.
For example, if the deceased owned a vacant residence, the executor should ensure that insurance remains in place, utilities are maintained when necessary, and the property remains secure.
Paying Debts, Taxes, and Expenses
Before distributing assets to beneficiaries, executors must address valid creditor claims, taxes, funeral expenses, and estate administration costs.
One of the most common mistakes occurs when an executor distributes money too early. If significant debts are discovered later, the executor may face personal liability for improper distributions.
Communicating With Beneficiaries
Many probate disputes begin not because an executor acted improperly, but because beneficiaries felt ignored. Regular, pre-emptive communication will not only significantly reduce suspicion and conflict, it is the right of the beneficiaries to insist upon it.
I suggest (depending upon the estate) a regular (monthly/quarterly/annually) update explaining what has been completed and what remains pending can be invaluable.
Distributing Assets Properly
Executors must distribute estate assets according to the terms of the will or, if there is no will, according to Virginia's intestacy laws.
Mistakes in distributions can create significant legal complications and may require court intervention to correct.
Additional Duties of a Trustee in Virginia
Trustees often have broader and longer-lasting responsibilities than executors.
Managing Trust Investments
Trustees generally have a continuing obligation to prudently manage and invest trust assets.
For example, if a trust is expected to last for ten years, the trustee may need to balance growth, income, diversification, and risk management rather than simply leaving assets idle.
This is when and why it is often a good idea for a trustee to consult and hire an investment manager or financial professional. Not only does such professional guidance benefit the trust assets, it gives the trustee an assurance, should later challenges or disputes arise.
Evaluating Distribution Requests
Trustees frequently must decide whether a requested distribution complies with the terms of the trust and whether it is reasonable.
Suppose a trust allows distributions for health, education, maintenance, and support. A trustee may approve a tuition payment, but should deny a request to purchase a luxury sports car.
The trustee's duty is to follow the trust document—not simply to grant every request.
Ongoing Reporting Obligations
Under Virginia law, trustees have continuing obligations to provide beneficiaries with reports, accountings, tax information, and updates regarding trust administration.
Consistent communication remains one of the best ways to avoid trust disputes.
Best Practices for Executors and Trustees
The most successful fiduciaries tend to follow the same practical principles.
Keep estate and trust funds completely separate from personal funds. Never deposit estate money into a personal account or pay personal expenses from estate or trust assets.
Document everything. Save bank statements, receipts, invoices, tax returns, contracts, emails, and correspondence. If a question arises years later, documentation often provides the answer.
Communicate regularly. Beneficiaries who understand what is happening are generally less likely to assume something improper is occurring.
Obtain professional guidance when necessary. Attorneys, accountants, tax professionals, appraisers, financial advisors, and real estate professionals can help fiduciaries avoid costly mistakes. At a minimum, a trustee should have tax returns professionally prepared, and should ensure the funds are well-invested.
Do not rush distributions. Many fiduciaries feel pressure from beneficiaries to distribute assets quickly. Taking the time to ensure debts, taxes, and legal obligations have been addressed is often the safest course of action. On the other hand, requests for communication or distributions from a beneficiary should never be met with unreasonable delay.
Frequently Asked Questions
Can an Executor Be Personally Liable in Virginia?
Yes. Executors may face personal liability if they mismanage assets, distribute funds prematurely, fail to pay taxes, ignore creditor claims, or breach their fiduciary duties.
Can a Trustee Be Sued in Virginia?
Yes. Beneficiaries may bring legal action against a trustee who breaches fiduciary duties, engages in self-dealing, fails to provide accountings, improperly manages trust assets, or violates the terms of the trust.
Does an Executor Get Paid in Virginia?
Virginia law generally permits reasonable compensation for executors based on the work performed and the complexity of the estate administration.
What Happens if an Executor Refuses to Communicate?
Beneficiaries may have legal remedies, including petitions seeking accountings, court supervision, or, in appropriate circumstances, removal of the executor.
What Happens if a Trustee Favors One Beneficiary Over Another?
A trustee who improperly favors one beneficiary may be found to have breached the duty of impartiality and could be required to reimburse the trust or otherwise correct the misconduct.
Virginia Executor, Trustee, Probate, and Real Estate Representation
Many estates and trusts involve more than financial accounts. They often include homes, investment properties, rental properties, family businesses, and other valuable assets that require legal guidance during administration.
Future Counsel Law assists executors, trustees, beneficiaries, homeowners, investors, and families throughout Virginia with estate planning, probate administration, trust administration, fiduciary disputes, trust litigation, deed transfers, inherited real estate matters, and residential and commercial real estate transactions.
Whether you are administering a loved one's estate, serving as a trustee, handling inherited real estate, creating an estate plan, or facing a dispute involving fiduciary duties, obtaining legal guidance early can help avoid costly mistakes and protect your interests.
Need Expert Guidance?
If you’re in Virginia, Maryland, or Washington, D.C. (DMV) and need a lawyer to handle your probate, trust administration, or estate planning with confidence, Phoenix S. Ayotte, Esq. of Future Counsel is here to help! Whether you're serving as an executor or trustee, planning your estate, or navigating inherited property and real estate transfers, we'll help you manage your responsibilities properly—minimizing liability and guiding you through every step with clarity and care.
