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A Personal Representative’s Duties vs. Authority during Probate

Planning

Responding to the death of a loved one requires coordinating and collecting information from a number of sources so funeral arrangements can be made and financial accounts accessed to cover expenses. One central component of settling the affairs of someone who died is settling his/her estate in probate, a court process necessary for distributing assets and resolving creditor claims. A central player in the probate process is the personal representative, the individual appointed and authorized by the court to handle identifying, collecting and distributing assets, as well as paying the deceased’s outstanding debts. An overview of the distinction between a personal representative’s authority to act on behalf of an estate, and his/her responsibilities to the potential heirs, will follow below.

Personal Representative’s Authority/Responsibility Generally

The personal representative, typically named in a person’s will or an interested family member who requests appointment, serves in a fiduciary capacity, a position of special trust and reliance. This person is specifically charged with safeguarding the deceased’s assets and making decisions with the best interests of the estate in mind. To ensure the personal representative adequately fulfills this responsibility, he/she must assume personal financial responsibility for properly administering the estate and distributing assets to heirs. Consequently, a personal representative must navigate the appropriate balance of exercising authority to administer the estate with the responsibilities owed to heirs. The distinction between a personal representative’s authority and his/her duties is extremely important because a personal representative has the ability, but not the obligation, to approve acts that occurred before appointment, if they are beneficial to the estate. Approval of an earlier act could result in liability for the estate, which was illustrated in a recent case involving a car accident where one of the vehicles involved in the accident was driven by a potential heir without the knowledge of the later-appointed personal representative.

Specific Authority

In order for a personal representative to settle an estate, he/she needs power to control and manage assets and to negotiate with creditors. Thus, personal representatives may take physical possession of probate assets, minus the homestead, if necessary to administer the estate. Typically, property is left in the possession of a potential heir, unless it is likely the property will need to be sold to pay creditors. Personal representatives have the authority to sell, retain, lease or otherwise encumber property as necessary for administration, and these transactions will be fully enforceable unless there is evidence the personal representative acted improperly, e.g., selling for below market value or to the personal representative’s spouse. To assist personal representatives fulfill their duties, the law also authorizes them to employ professionals (accountants, attorneys, real estate agents, etc.) to handle aspects of probate administration, and any expenses associated with this are directly paid by the estate.

Specific Duties

The general duty of a personal representative to settle an estate primarily revolves around locating heirs/beneficiaries, substantiating creditor claims, and collecting/distributing probate property. To that end, a notice must be published in local newspapers to notify creditors with claims and potential heirs about the probate administration. Personal representatives must conduct a diligent search for creditors and object to any improper claims. Valid debts must be paid, a final tax return must be filed, if required, and any taxes owed must also be paid. Further, the personal representative must file an official inventory of all probate assets with the court so a valuation of the estate can be established. Intertwined with inventorying assets, the personal representative’s most important duty is to protect and preserve assets. This duty exists to allow the heirs/beneficiaries to receive the greatest distribution possible, and to guard against the personal representative abusing his/her position to collect a greater share than legally permissible.

Talk to a Probate Attorney

Most families will have to deal with the probate process at some point, but the rules are complex, and the stakes are high if the estate is mismanaged. Hiring the right attorney to represent your family’s interests is the best way to ensure this process will be handled correctly and efficiently. The Fort Lauderdale law office of Joyce A. Julian, P.A. can assist you with all aspects of probate, from overseeing the administrative process to litigating disputes. If you have any concerns about a loved one’s estate, call the office today for a free consultation.

Resource:

wealthmanagement.com/equities/americans-favor-real-estate-over-stocks

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