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Choose Wisely When Naming the Right Personal Representative

Posted by Lesley L. Price, CPA on Nov 4, 2020 10:18:58 AM

Last Will-1220731939-1If you have a will instead of a trust, choosing the right person to serve as the personal representative should be made only after careful consideration. While many of us have clarity on who our beneficiaries are, we often do not take considerable concern into the pivotal role of a personal representative.

A personal representative or legal personal representative is the executor or administrator for a deceased person's estate. Personal representatives serve as fiduciaries of the estates' beneficiaries and have the duty to act in good faith, with honesty, loyalty, and candor, and in the best interests of the estate's beneficiaries. The personal representative is also responsible for paying your liabilities, filing any required tax returns, and distributing your remaining assets in accordance with your will.

In choosing your personal representative, make sure it is someone able and willing to serve in the role. Even where the smallest estates are concerned, a personal representative's role is not an easy one. He or she faces court supervision as well as the scrutiny of heirs and other family members — some of whom may be seeking the first opportunity to cry foul and call into question the representative's actions. The law requires personal representatives to follow the terms of the deceased person's will, and they have a legal duty to act in your beneficiaries' best interest. As a result, some individuals may be unwilling to incur the liability risks. Also, if choosing an individual, consider a younger person. Take into account the person's age and health and the likelihood of that person being around to administer your estate. 

Your personal representative does not need to have the same business or educational background as an attorney or an accountant. Still, he or she should be someone who you think will seek guidance and advice from them or any other trusted advisor. Mainly, your focus should be on someone level-headed and in whom you have considerable trust and confidence.

Being a personal representative requires a flurry of work in a short amount of time. Sometimes, it's frustrating, especially if beneficiaries squabble about the estate or contest the will. A personal representative typically is personally liable for any claims of fraud or mismanagement by the beneficiaries. Finding someone who can deal with demanding or even unpleasant beneficiaries is a must. It is common for you to think that all beneficiaries will get along smoothly, but when the time comes, it's not uncommon for beneficiaries to be insistent, uncompromising, and adamant that what they want to do and how they want to do it is legally acceptable (even when it absolutely isn't). Your personal representative will need to be able to stand up to this pressure and potential conflict and resolve these issues without becoming emotionally involved. 

The primary duty of a Personal Presentative is to protect the estate in a manner consistent with the decedent’s wishes. Although this may appear relatively simple, it is essential that the Personal Representative understand the responsibilities associated with the position, some of which are listed below.

Summary of Duties:

  • Opening the Estate
  • Identify Assets of the Estate
  • Opening of the Estate Account
  • Provide Notice to Creditors
  • Initial Accounting of Financial Activity
  • Preparation and Filing of Tax Returns
  • Distribution of Assets and Closing the Estate

Finally, your personal representative should be conscientious about following your wishes, regardless of whether they agree with your decisions. In your will, you can choose to leave your estate to anyone you wish. Your will—the way it's written as of the date of your death—memorializes your wishes, and your personal representative is legally duty-bound to follow those wishes, no matter their concerns.

For more information about the above article or other estate and trust tax services, contact Lesley L. Price, CPA at (334) 887-7022 or by leaving us a message below. 

Topics: Estate Planning

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