A Personal Representative (also known as an Executor) is responsible for the administration of an estate. A Personal Representative is nominated in the Will (if there is one) and confirmed by the Court in a probate proceeding. If there is no Will a Personal Representative will be appointed by the Court based upon laws that determine who has priority to serve as a Personal Representative.
The Personal Representative must inventory all of the deceased’s assets and debts; pay the deceased’s debts, and then distribute the remaining assets of the estate as provided by the terms of the Will (if one exists) or by the laws of intestacy (if there is no Will). The Personal Representative must responsibly handle the finances of the estate. This process can be intimidating for an individual who has never done so before.
After a person passes away, the Personal Representative must locate the Will and file it with the local probate court. Many times the Personal Representative will hire an attorney to help with the process. Copies of the death certificate should be obtained and sent to banks, creditors, and relevant government agencies like social security. Final tax returns may need to be filed. If the deceased or the estate is involved in a lawsuit the Personal Representative will be the representative of the deceased or estate.
After being appointed the Personal Representative should set up a new bank account in the name of the estate. All income received for the deceased, such as remaining paychecks, rents from investment properties, and the collection of outstanding loans receivable, should go into this separate bank account. Bills that need to be paid, like mortgage payments or tax bills, can be paid from this account. Debts of the estate must be paid according to a specific priority. If there is not enough money to pay all debts only those with highest priority will be paid. An inventory of assets should be compiled and maintained by the Personal Representative at all times. An accounting of the estate’s assets, debts, income, and expenses should also be available upon request.
Assets should be secured and maintained during the estate administration process. Assets may be transferred directly to heirs or need to be sold in order liquidate funds for the estate and heirs. Only the Personal Representative can transfer title on behalf of an estate. After a complete inventory is prepared, debts paid, and assets accounted for, the Personal Representative will distribute the estate according to the Will or the laws of intestacy.
For all of this trouble, the Personal Representative is permitted to take a fee from the estate’s assets. However, because the Personal Representative of an estate is usually a close family member, it is not uncommon for the Personal Representative to waive this fee.
If any of these responsibilities are overwhelming for a Personal Representative, he or she may elect not to accept the position, or, if he or she has already accepted, may resign at any time.