The New York State Supreme Court’s Third Department Appellate Division has affirmed the Madison County Surrogate’s decision in the Estate of Wetherill 828 N.Y.S. 2d 722 which surcharged and discharged an executor for improper exercise of his fiduciary duty. This was a matter where two executors were appointed to serve under the decedent’s will but only one was disciplined.
Here, Barker was a professional financial advisor. His co-fiduciary, Dorothy Ritchie, acquiesced to his decisions and allowed him to handle the estate’s affairs. Instead of prudently managing the estate’s investments, however, the executor made unsuitable investments in junk bonds and failed to preserve the estate’s principal. He also failed to return a considerable sum which he had received for future financial services from the decedent before her death, even though it constituted an unearned fee.
The court found that the co-executor’s pattern of financial misconduct warranted a substantial surcharge and removal from his position. Even though the court would normally have found that the other executor had, by her passivity, ratified the improprieties of her co-fiduciary, she was not similarly penalized. In a somewhat convoluted fact-pattern, the second fiduciary had initially been the legal secretary of the financial advisor. Subsequently, she became the administrative assistant and attorney-in-fact of the decedent.
It seems that the decedent’s former financial advisor/executor had made all of the improper decisions which had been injurious to the estate. His former secretary/co-executrix merely followed the directions of her former boss. Under the circumstances, it was determined that inasmuch as Barker had claimed to have a superior amount of expertise and had, in effect, taken over all of the decision making power from Ms.Ritchie, the court determined that it would be appropriate not to hold her jointly and severally liable for her co-executor’s blunders and improprieties.