If you have been nominated in a Will as the personal representative (executor) for someone, you might not be aware of everything that is expected. Your job is to administer the estate after the person dies, wind up their financial affairs, pay taxes and debts, and distribute the remainder of the estate to the beneficiaries. The PR is officially appointed by the probate court.
The personal representative bears
a fiduciary
duty. That is, the PR has a duty of loyalty to, and represents the interests of,
the decedent's estate, above the interests of all others. The PR must avoid any
conflicts of interest, avoid self-dealing, and maintain confidentiality of the
affairs of the estate. In addition, the PR has a duty to preserve the value of the estate assets, and minimize tax liabilities whenever possible. As long as the PR acts in good faith, the PR is
generally not personally liable for their actions.
While the duties of the PR can become complex, and at some times a little overwhelming, the job isn't insurmountable. You just need to stay organized and focused, and have a keen eye for detail. The decedent had faith in you to do the job right, and thus chose you for the task. Consider it an honor to have been asked.
However, if performing the duties of personal representative is more than you can handle now, or if you are not able to serve as PR, you have the power to refuse to serve. The Will may have nominated one or more successor personal representatives, or it may have granted you the power to nominate a successor to take your place. If there is no successor provision in the Will, you may have to petition the probate court to appoint a new PR.
Here is a checklist of some things to do after that loved one
has passed and you are representing their estate assets:
✦ Open communication. As the estate's PR, you are the connection between the probate court, creditors, and heirs. You will be spending some time on the phone, calling banks, credit card companies, funeral home, medical providers, insurance companies, and so forth. Keep written records of all correspondence, including notes of phone calls. You will be plenty busy in coming months and you may not recall all the details from parties you will be in contact with.
✦ Contact an experienced probate attorney to protect yourself and make sure everything stays on track. Legal counsel can walk you through the probate process, help you avoid pitfalls, and help ensure something important is not overlooked.
✦ Take inventory of property. Once appointed, the PR is responsible for securing the decedent's property and keeping it protected. This may include changing locks, and limiting access to other people. You may be surprised how easily things can be carted off by heirs who think they deserve them right away. However, you may give family members a few small keepsakes, but you should never distribute any asset of value until after there has been an accounting with the probate court.
You will need to present a written inventory to the probate court. You may need to have some assets appraised. If debts were owed the decedent, you will be responsible for collecting those. You should also secure access to financial assets, such as bank accounts, investment portfolios, retirement accounts, life insurance, etc.
✦ Open a checking account on behalf of the estate. You will need funds to pay bills and expenses related to the estate. Keep an accurate and up to date register for the account, in case you are asked to document account activity.
✦ Pay debts and expenses. You must determine all valid debts of the decedent's estate and pay them. You will also be paying all expenses of the estate administration, including funeral, final medical bills, attorney fees, utilities, and taxes.
✦ Notify the probate court. You must petition the probate court and file the Will in order for you to be officially appointed as personal representative. If there is no Will, the decedent's heirs must petition the court to appoint someone as PR. The court will require an inventory of the estate assets.
Probate in Minnesota can be
either formal or informal, and the administration
will be either supervised or unsupervised. Having an experienced
probate attorney can help you file the right type.
Note: If the estate includes no real property, and has a total value of under $75,000, probate may not even be necessary. This is what is known as a small estate, and the court's involvement is not required. Of course, you will still need to take the other steps in settling the estate, including paying debts, expenses and taxes, and distributing the remaining assets.
✦ File tax returns. You will be required to file final income tax returns on behalf of the decedent. If the estate is valued at over $3 million you will need to file a Minnesota estate tax return, and if over $11 million, a federal estate tax return. Both tax returns must be filed within nine months of death.
✦ File a final account with the probate court. You may be required to file a Final Account with the court, and you will need accurate records of all transactions taken on behalf of the estate. The Final Account is a record of assets, receipts and disbursements made during the administration of the estate. Even if a Final Account is not required by the court, it is a good idea to file one anyway, to protect yourself from any contested issues that may arise later.
✦ Distribute the estate property. After all creditor claims are satisfied and bills are paid, you will be responsible for distributing the remaining property to the heirs. You will need to refer to the Will and state statutes for guidance as to distribution.
Of course, this list is not exhaustive, and there will likely be some other tasks at hand, depending on the circumstances.
The PR is usually entitled to reimbursement from the estate for any out of pocket expenses incurred while administering the estate. The PR may also charge the estate a reasonable fee for their services, typically around $25-$50 per hour.