What are the duties of a personal representative?
UPDATED: June 19, 2018
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The duties of a personal representative are dictated in a will and controlled by the probate laws of the state. The duties of a personal representative are directly related to the stages of executing the will or trust such as: identifying assets, paying the bills, filing lawsuits (if needed), and closing out the estate in accordance with the will and controlling probate law.
Failure to adhere to the required duties can result in heirs filing a lawsuit against the personal representative for breach of fiduciary duty alleging that the personal representative owed a statutory and reasonable duty to protect the assets of the estate while trying to wind down the estate, and then breached that duty by failing to exercise due diligence to perform the tasks required.
The first main duty of the personal representative is to identify and collect the assets. When most people think of assets they think of real estate and stock investments. However, assets can include any property of value and the personal representative must identify, gather, and inventory all the assets of the deceased. A sub-duty of identifying and inventorying assets is having the assets appraised. This is especially important if you are not sure how much something is worth, or even what it is. If you find an odd collection of butter churns while cleaning out a deceased’s house and throw them in the trash, you may be liable to the estate for breach of fiduciary duty if it’s later determined that the butter churns were expensive antiques.
Finding assets sometimes takes work. The personal representative of the estate should look for any unpaid amounts due the deceased including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits). Even though these amounts are not in the decedent’s checking account, they are still an asset of the estate.
Paying the Bills
The second main duty of the personal representative of the estate is to pay the bills. Outstanding bills can include outstanding debts of the deceased or funeral expenses. The personal representative should give legal notice to potential creditors and investigate the validity of all claims against the estate. If someone is making a claim against the estate, the personal representative may need the assistance of other professionals, like an accountant or an attorney. If any expenses are incurred in protecting or administering the estate, the personal representative must pay the expenses for administering the estate out of the estate’s funds.
During the process of identifying assets or investigating claims against the estate, a personal representative may need to take action to protect assets, retrieve assets, or defend against invalid claims. As such, the personal representative of an estate has the duty to file the appropriate lawsuits or pursue legal remedies to accomplish any of the executor’s responsibilities. For example, if the employer of the deceased refuses to turn over the last two weeks of wages earned by the deceased, the personal representative would have a duty to take the appropriate legal action to recover the amounts due.
Closing Out the Estate
The final duty of the personal representative is to wind down the estate. Part of the winding down involves opening a checking account specifically for the estate. This allows any heirs, reviewing courts or the IRS to see exactly what the estate involved and what was paid. Personal representatives should never mingle or combine estate funds with their own personal funds.
The personal representative also completes any paperwork necessary to shut the estate of the deceased down. This includes handling various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of the death of the decedent. Payment of income and estate taxes is one of the final wind down duties. Do not distribute assets to heirs without knowing what the tax bill is going to be for the estate.
Once all of the particulars of the estate are settled, the personal representative then has to decide who gets what. Most wills will tell the personal representative who the heirs or beneficiaries are and how much of the estate the beneficiary is supposed to receive. If there is no will, then the probate laws will guide who is an heir and how much they should receive. After the heirs are identified, the personal representative must distribute the remaining assets of the estate consistent with the will or the state’s probate laws. Making gifts to non-heirs is considered a breach of this duty. Once all of the bills have been paid and the assets are distributed, the final duty of the personal representative is to close the estate or the probate.
Legal Help & Co-personal Reprentatives
The personal representative can hire attorneys and accountants to help with their duties, but in the end, the responsibility for making sure something gets done still falls on them. However, personal representatives can be sued for failing to file or pay a final tax return in a timely manner; so it is important not rely on an attorney or an accountant to get the return filed.
Similarly, co-personal representatives are generally jointly and severally liable for all decisions they make in agreement. For example, if you and another representative agree to file a late return and are later sued, you will both be liable for all of the damages. If you disagree with the decision of a co-representative then make sure that you document your objection to avoid liability issues later.