What You Need to Know About Estate Personal Representatives

When you set up a will or estate plan, one of the things that you’ll be asked to do is name a personal representative. The personal representative, sometimes called an executor or administrator, is responsible for handling your estate and making sure that your wishes are carried out. This is an important responsibility, and it helps if you understand what the job entails and what you should be looking for in a personal representative. Take a look at some of the things you need to know.

What Does a Personal Representative Actually Do?

Your personal representative fills a number of important functions. It’s their job to locate all of your assets that are subject to probate and keep them safe for your beneficiaries. They may also need to have assets appraised for their value or identify creditors so they can pay off debts.

Your personal representative will be responsible for preparing and filing your final tax return, and if you have a large enough estate, or if your state requires it, they’ll also have to prepare and file estate tax returns as well. They’ll also need to pay the operating expenses involved in administering your estate until probate closes, and that may require them to sell or liquidate assets if you don’t have enough available cash in the estate. Finally, your personal representative is the person responsible for ensuring that your assets are distributed to the beneficiaries that you’ve named and that all relevant documents are filed with the probate court.

Who Should Be Your Personal Representative?

So, who is the best person to trust with these tasks? Often, people choose a family member or close friend to act as a representative. The thinking behind this is that a person who knows you well and has had an intimate relationship with you over the years will understand your intentions better than a stranger, so if there are any questions about your intentions or unexpected decisions to make, the personal representative will make the decision with your wishes in mind. However, a personal representative doesn’t have to be a relative or friend – it could be a professional, like an accountant or attorney, or even an entity, like a bank.

In any case, your personal representative should be somebody that you trust to follow through with your wishes. It should also be someone who you believe will be up to the task. For example, someone who lives far away or has many obligations of their own may not be the best choice to handle a complex estate, no matter how trustworthy they are. You’ll want to make sure that they have the time, energy, and resources needed to carry out your wishes and fulfill their legal responsibilities.

Are Multiple Representatives A Good Idea?

Sometimes, people name multiple co-representatives. This is common when a person has multiple children and doesn’t want to appear to be playing favorites, so they name all of their kids co-representatives. This can be a mistake. The problem is that when no one person has the final say, it can be difficult to avoid arguments. It’s usually preferable to appoint one person who will be the last word on any decisions that need to be made. This also avoids a situation where, despite having multiple co-representatives, one person ends up doing all the work and winds up feeling resentful.

However, that doesn’t mean that it’s always a bad idea to think of multiple people who could serve as a representative. If your preferred representative predeceases you, or if they’re otherwise unable to fulfill their duties, it’s helpful to have a backup named in your estate paperwork. Otherwise, the court will wind up appointing a representative.

It’s also a good idea to review your choice of personal representatives every so often. Relationships change over the years, and sometimes a person who seemed like a good choice at the time may seem like a less viable option in a few years. For example, a divorce in the family – even if it’s not your own – can change your relationships with people you were once close to and may be a good reason to rethink your choice of representatives.

How Does a Personal Representative Get Paid?

If you choose a lawyer, accountant, trust company, or bank to act as your personal representative, they’ll charge a fee for their services. This could be either a flat fee, an hourly rate, or a percentage of the value of the assets that will go through probate. Their fee comes from your estate.

If you choose a family member or friend to be your personal representative, they’re able to charge a fee, but it’s common for them to waive the fee in that situation. However, even if they waive the fee, they can still collect reimbursement from your estate for travel and other expenses they incur along the way.

Do You Need to Inform Anyone of Your Choice?

It’s up to you to choose the personal representative that you want, but before finalizing the paperwork, you should talk to the person (or people) who you want to fill that role. Acting as a personal representative can be a big responsibility and also a big chore, and some people may not want to take it on. Someone who has prior experience acting as a personal representative should be aware of what is involved and have an idea of whether or not they want to do the job again, but if the person you’re considering has never been a personal representative before, you should make sure that they’re aware of the scope of the duties they’re agreeing to before they agree.

You may also want to have a conversation with certain people who weren’t chosen, if only to avoid discord later. For example, if you appoint one of your children to be the executor, you may want to explain to your other children why they weren’t chosen so that they don’t feel slighted. This is entirely optional, but addressing the issue head-on can avoid hard feelings and difficulties later on.

Different estates have different needs, and choosing a personal representative depends largely on the specific needs of your estate. Consulting with an estate planning attorney can help you identify your needs so that you can make a choice about your personal representative that works best for you.

Categories: Estate Planning

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