Personal Representative’s Duties (What are they?)

The least you need to know…

• A personal representative must act on behalf of the estate, not their own behalf or the behalf of the heirs.
• A personal representative must identify the estate’s assets, pay debts, and distribute the assets in accordance with the will and law.
• The personal representative is empowered to file lawsuits as necessary to gather all the assets of the estate.

The personal representative’s duties 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.

If you need to find a probate attorney near you, begin your search by entering your ZIP code in our search tool.

What are the responsibilities of a personal representative?

There are no duties of a personal will representative until after death. In fact, a personal representative may not even know they have the role until after someone dies. The duties they must undertake include each of the responsibilities below.

Identifying Assets

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.

Filing lawsuits

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 down the estate of the deceased. 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 taxes 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 the representative’s fiduciary 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 And Co-personal Representatives

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 to 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.

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Case Studies: Personal Representative’s Duties

Case Study 1: Breach of Fiduciary Duty 

The personal representative, Sarah, of John’s estate neglected their duties, resulting in the loss of valuable assets. Sarah failed to identify and collect all the assets, leading to the accidental disposal of valuable items. Additionally, she did not properly pay bills or investigate claims, breaching her fiduciary duty. Consequently, John’s heirs filed a lawsuit against Sarah for negligence and failure to protect the estate’s assets.

Case Study 2: Improper Distribution

In Sarah’s estate, the personal representative, Mark, disregarded the instructions outlined in the will. He made unauthorized gifts to non-heirs, violating his fiduciary duty. Mark distributed the assets without considering tax liabilities, potentially causing financial complications for the beneficiaries. Legal action may be taken by the heirs to rectify the improper distribution.

Case Study 3: Failure to File Lawsuits 

Mark, the personal representative of Mark’s estate, neglected to take necessary legal action to protect and retrieve assets wrongfully withheld. For instance, the deceased’s employer refused to release the last two weeks’ wages earned. Mark failed to file a lawsuit to recover the amounts due, disregarding his responsibilities. This failure may lead to financial losses for the estate and potential legal consequences for Mark.

Frequently Asked Questions: Duties of a Personal Representative

Even though we’ve seen a lot of the duties of Personal Representatives explained, there are a lot of common questions that have yet to be addressed. We’re going to try and cover some of these now.

How should personal representative sign documents?

There is no exact rule that dictates how to sign as a personal representative of an estate as long as the personal representative’s role is clear. This means that you should sign documents on behalf of the estate with your name, title, and the name of the estate.

Your title could be “personal representative,” “executor,” or “executrix.”

Can a personal representative be a beneficiary of a will?

Not only is this allowed, but it is also the most common situation in probate. Naming a child to administer a will, for example, happens all the time, and it would be pretty strange to trust a son or daughter to administer the estate but to not want to leave them anything in your will.

Can a personal representative sell a property?

A personal representative can sell a property if it aligns with the intentions expressed in the will. Often the personal representative will need court approval and must have the property appraised before the sale can go through. The intervention of the court will especially be necessary if not all the heirs agree with the sale.

What does a personal representative get paid?

It is typical for a personal representative to be paid for their service. Personal representative fees typically are around three to five percent of the estate and are taxable income.

How do you become a personal representative for an estate?

Usually, a personal representative is named in a will. A court can also appoint a personal representative if it’s deemed necessary for probate. In the latter circumstance, proof of the personal representative appointment will be provided by the court to facilitate the execution of the duties.

Can a personal representative be removed?

A personal representative can only be removed by the court. A court would only do so if it was shown that the personal representative was acting contrary to the interests of the estate or otherwise wrongly.

For example, if the personal representative is committing fraud, embezzling, or mismanaging the estate. Typically, this bad behavior must be brought to the court’s attention by an interested party (someone who is or could be an heir of the deceased).

Bringing It All Together

The duties of a personal representative are dictated by the will of the deceased (if there is one) and by state law. The personal representative is required to identify all assets that are part of the estate and determine the value of these assets. The personal representative is also responsible for paying debts and taxes of the estate.

Finally, the personal representative will distribute the assets in accordance with the will or the rules of intestacy in the state and then close out the estate.

Failing to do all of these things in accordance with the law and the wishes of the deceased is a breach of fiduciary duty and can result in the personal representative being sued by the heirs.

Did we cover everything you wanted to know about personal representatives and their duties?

If you are a personal representative or think you may have a case for breach of fiduciary duty, you can start your search for an estate attorney by entering your ZIP code into our search tool below.

References:

1. https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041#:~:text=For%20fiscal%20year%20estates%20and,close%20of%20the%20tax%20year.&text=Estate%20tax%20on%20the%20transfer,%2DSkipping%20Transfer)%20Tax%20Return.
2. https://www.ssa.gov/benefits/survivors/#:~:text=In%20most%20cases%2C%20the%20funeral,800%2D325%2D0778).
3. https://va.org/reporting-a-veterans-death/

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