Personal Representatives

Q: What happens when the person who dies owned land in multiple states?Small Luke

A: Usually, the laws of the state in which the deceased was last a permanent resident prevail in regard to governance of probate issues – covering all of the deceased’s personal property, wherever it was located, and all the deceased’s real property located within the state. Therefore, probate almost always filed in the last state where the deceased person lived.

If the decedent owned out-of-state real property, the laws of the other state can govern (or certainly affect) who inherits it if there is no will. If a will exists and it has been filed for probate in the state of most recent residence of the deceased, it usually must be submitted to probate in the other state(s) of jurisdiction in which the deceased owned real property. That additional probate filing is formally referred to as “ancillary probate”. Some states require the appointment of a personal representative who is a local resident or the state to administer any in-state property.

If there is no Will, probate is usually required in each state where the real property is situated, in addition to the home state and each individual state can impose it own methodology that controls the distribution of assets. As an example, in one state, the real estate might go only to the spouse. In another state, it might be equally divided between a spouse and each of his or her children. In still another, half of the assets might go to a spouse and the remainder divided equally between the children. This is one of the reasons a will is so important to properly express the wishes of the deceased and prevent family struggles and quarrels following a death.

Q: Who is legally responsible for handling the probate process?

A: If there is a will, the Personal Representative (sometimes referred to as the “executor” or “executrix”) is usually responsible.  If there is no will, an “administrator” is appointed by the court as part of the probate proceeding and that person has the responsibility for managing the estate through the proceeding, subject to established probate rules and procedures.

In many states, the probate court has a considerable amount of control over the activities of the Personal Representative, and requires that she or he obtain prior permission of the court before certain actions, such as the sale of real estate or business interests owned by the estate, may take place.

Q: What are the main duties of a personal representative?

A: The main tasks of a Personal Representative are to:

(1) determine if there are any probate assets;

(2) identify, gather, and inventory the assets of the deceased;

(3) receive payments due the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits);

(4) set up a checking account for the estate;

(5) figure out who is going to get what and how much under the Will (if there is no Will, the state’s “interstate succession laws” apply);

(6) value or appraise the estate’s assets;

(7) give legal notice to potential creditors (the procedure and deadlines for creditors to file claims vary from state-to-state);

(8) investigate the validity of all claims against the estate;

(9) pay funeral bills, outstanding debts, and valid claims;

(10) pay the expenses of administrating the estate;

(11) handle various paperwork, such as discontinuing utilities and charge cards, and notifying Social Security, Civil Service, and Veterans Administration of the death;

(12) file and pay income and estate taxes;

(13) distribute the remaining property in accordance with the instructions provided in the deceased’s Will; and

(14) close probate.

Q: If I am named as the personal representative, do I have to accept the job?

A: Of course not. It is always your option to serve or decline. Even if you agree to serve you can resign later. If you do quit before the completion of probate, you may be required to provide an “accounting” for the period you served. If you decline to serve (or accept and resign later) any alternate named in the will is typically appointed by the court. If no alternate representative is named in the will or the named alternate dies or is unwilling to serve (or, of course, if a person dies without a will, the probate court will appoint someone to serve as the personal representative.

Q: Are personal representatives usually paid for their work?

A: It is not a requirement, but usually they are compensated. Certainly all personal expenses they incur in the management and process of settling the estate must be paid for. Typically, a personal representative earns a fee of +/- 2% of the total value of the estate for their work. This can be mandated by the courts or by law in some states and also varies moderately from state to state. Generally, this percentage diminishes as a percentage as the size of the estate increases.

All of the funds paid to the personal representative are subject to approval by the probate court. Additional fees may be allowed by the court in cases of unusual difficulty or extraordinary circumstances. On the other hand, if a personal representative does not perform their duties in an orderly or timely manner, the court may reduce or deny compensation and the Personal Representative may be held responsible for any damages caused.

If a person is both the sole beneficiary of the estate, and the estate is not subject to Federal Estate Tax, it usually does not make sense to take any fees as all fee income is subject to income tax. (The money a beneficiary receives from the estate is income tax-free.)

Q: What happens if the personal representative fails to perform his or her duty?

A: An executor or administrator who is derelict in his or her duty is personally liable for damages caused in the administration of the estate.

Liability may arise from improperly managing the assets of the estate, failing to collect claims and moneys due the estate, overpaying claimants, selling an asset without the authority to do so, or at an inappropriate price, neglecting to file tax returns on time, distributing property to the wrong beneficiaries, etc.

This means that the Personal Representative might wind up paying for the loss out of his or her own pocket.

Q: What if someone objects to or contests the will?

A: If someone files an objection to the Will or produces another Will, what is known as a “Will contest” has begun. While Will contests are not that rare, and while few people actually win one, they can be extraordinarily costly and create incredible delays.

It’s also important to know that the requirements for contesting a will require a person to have “standing” to mount a contest.  Despite the fact that you feel your next door neighbor’s children ignored her and treated her badly. that does not give you the right to contest her will.  If, a person has proper standing to contest a will (ex: a child who was cut out of the Will by an angry parent, or even by a kindly parent who felt that the local charity, not his children, should get his assets) that person would have standing to bring a “Will contest”. If a Will gives one sibling 2/3rds of a parent’s estate and the other 1/3rd, the one receiving less has standing to bring a Will contest. Similarly, if a later Will is less favorable to someone than an earlier Will, or no Will at all, that person has standing. A Will contest sometimes is launched to have a different person, bank or trust company serve as Personal Representative for the estate, or as a trustee of Trusts created by the Will.

Q: Can there be more than one designated personal representative?

A: You could do so by appointing co-representatives or a secondary representative. However, this could not only cause problems during probate if there is a disagreement between the representatives. Normally, one representative is all that is needed and appointing more than one should only be done where there is a specify reason to do so. A possible example might be where one person handled only the real estate aspects of probate and the other one was designated to handle all other issues. Appointing co-representatives just to protect someone’s “feelings” is almost always a bad decision and should be avoided. Often, a frank discussion with the people involved can eliminate any issues of concern and allow one person to take on the challenging role or representative without the added challenges of co-representation.

Q: Is it necessary for the personal representative to live in the decedent’s state?

A: It depends on the laws of the state, but usually isn’t an absolute requirement, but it is usually easier – especially in regard to larger estates and real estate.

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IMPORTANT NOTE: Please be aware that the information on this page is delivered without warranty or guarantee of accuracy. It’s provided to help you learn more and formulate specific questions to discuss with your attorney and/or your Real Estate Professional and/or to help a personal representative, executor or executrix when executing their challenging responsibilities. By accessing this page, you acknowledge that it has been provided for INFORMATION ONLY and that you are hereby advised and fully aware that any decisions regarding probate issues should be discussed with an attorney and/or a Real Estate Professional.