Failing To Make Mortgage Payments On the Estate's Real Property Is Grounds for Removal As The Estate's Fiduciary, Even If The Property Is Worth Less Than The Mortgage

Castro v. Castro, 8th Dist. App. No. 99037, 2013 Ohio 1671. An estate consisted of a mortgaged real property where the value of the real property was less than the value of the mortgage. The fiduciary for the Estate rented out the Estate property to a third party, collected monthly rent and deposited it into an Estate account. In spite of a court order to file a final accounting for the Estate, the fiduciary failed to file a final account because the real property and its mortgage still belonged to the Estate. The fiduciary testified that he chose not to continue to pay the mortgage on the Estate's real property because the property was worth less than the amount owed to the mortgage holder and that foreclosure was imminent.

The estate fiduciary was removed for failure to timely administer the estate and failure to preserve the assets of the estate. The fiduciary had an obligation to take some action with regard to the real property to preserve and/or dispose of it but failed to produce any evidence that he took any steps to safeguard the real property. The estate fiduciary's removal from his position was affirmed.