criminal-law civil-law trusts-and-estates court-records
Under U.S. law, can an estate&#39;s executor be penalized for accidentally losing a document before the estate is closed?
<p>What legal penalty might apply in a situation where documents were lost by accident before settling or closing an estate? Would there be civil or criminal penalties if, some but not all, documents (like bank statements or property assessments) were accidentally lost?</p>

<p><strong>Edit</strong>
Context: a hypothetical situation where the estate is insolvent, and the potentially lost documents may or may not contain signed original documents.</p>

<blockquote>
  <p>What legal penalty might apply in a situation where documents were
  lost by accident before settling or closing an estate? Would there be
  civil or criminal penalties if, some but not all, documents (like bank
  statements or property assessments) were accidentally lost?</p>
</blockquote>

<p>There isn't enough context in this question to know.</p>

<p>An executor is a fiduciary who has a duty to account, so if the fiduciary can not provide a report that tells where all of the assets of the estate went, the fiduciary is deemed to have converted the assets unaccounted for and this could even give rise to theft charges.</p>

<p>But, losing supporting documents for an accounting, particularly documents like bank statements and property assessments which can be recreated from third-party sources is neither a crime nor a tort. No one is harmed because they are lost.</p>

<p>A fiduciary has a duty to keep beneficiaries informed of what happened in an estate, not to preserve records supporting those communications <em>per se</em>. </p>

<p>Also, in the probate process, it isn't uncommon for interim accountings to be filed quarterly or annually before the estate is officially closed. And, in many states, when an executor files an interim accounting it can often be contested for only a short time period after it is filed (frequently a matter of weeks or a few months). So, a lack of supporting documentation would only be legally relevant to the time period since the last interim accounting in many cases.</p>

<p>Further, frequently in a probate estate, to receive a distribution without a court order, a beneficiary will sign a waiver of all liability of the executor and the estate arising prior to the distribution. So, if there are multiple distributions made in a probate estate, only acts since the last waiver was signed could be contested.</p>

<p>Similarly, if losing documents that help prove that the executor is innocent of improper action makes it harder for the executor to defend himself or herself or itself against claims that the executor acted improperly, the executor may have a harder time defending against those claims.</p>

<p>But, losing relevant documents during the course of a contested litigation or in anticipation of contested litigation is only sanctionable as spoliation of evidence if the impact on the litigation is material because there is no other source of the evidence, and is intentional.</p>

<p>Also, with narrow exceptions, usually involving physical injury, accidents don't give rise to criminal liability (which is usually based on reckless or intentional acts).</p>

<p>Civil liability almost never arises unless someone is actually economically or physically harmed by an act.</p>

<p>Now, if the executor lost a "real" document like a live check that for some reason can't be reissued due, or a bearer bond that is subsequently sold by a unknown person who finds it to a bona fide purchaser for value, resulting in an economic loss to the estate, and this loss is due to negligence, the executor is legally responsible for indemnifying the estate from this harm. </p>

<p>But, this would not apply in a case where the document is mere evidence of a legal obligation rather than embodying the legal obligation, or having intrinsic value (e.g. if the document was an original copy of the Declaration of Independence), unless the loss of the document was negligent and losing it causes physical or economic harm (which would rarely be the case).</p>

<p>As a concluding caveat, it bears mentioning that the relevant parts of the criminal law are predominantly a matter of state law, and that probate law is almost entirely state law, so the law is not perfectly uniform within the United States on this issue. But, these are issues upon which there would be little variation between U.S. states.</p>

<p>A "penalty" suggests violation of some law, such as an ordinance against speeding or throwing trash in the street. There are no laws making it a crime to lose a document in a probate case, so there will be no fine assessed for losing the document. As a civil matter, though, a person could be sued for negligently causing damage, for instance if a person loses a bearer bond (let's say one that he an another person has an interest in), there will be potential substantial financial loss, so the question would be whether his (in-)action was negligent, that is, did the person use ordinary caution to protect the bond. If the document is a bank statement, the loss is probably minimal. Losing a property assessment (the county assessor's statement) would not result in a loss, so there's be no basis for a lawsuit.</p>

<p>The example documents you mention seem replaceable, so a "penalty" for loosing them seems unlikely unless replacing them were needed and expensive.   If the executor owed an equitable duty to you, you might get him to obtain a replacement at his own expense if that's reasonable under the circumstances.</p>

<p>In some states there are rules that hold a trustee to the highest fiduciary standard of care.  A possible consequence for a trustee in court may be that any reasonable doubts caused by inadequate record keeping could be resolved in a beneficiary's favor, and against the trustee.  I'm not sure if the same applies to an executor. </p>
