A personal representative of your will, also known as the executor, is the party responsible for carrying out your final wishes, evaluating your estate, filing proper documents, and distributing assets to beneficiaries. It is a role that you should not fill with the first person that comes to mind. Instead, you must carefully think about who you can trust to take on possibly one of the most important decision-making roles that greatly impact your loved ones.
Your personal representative tackles numerous tasks as part of their job to administer your estate. They must meet deadlines, file the proper paperwork, be organized, and have self-accountability. Most importantly, you want someone responsible enough to take on such a large to-do list; otherwise, your loved ones will suffer.
Opening the Estate – The First Priority
As the personal representative, the first step is to file a Petition for Probate document with the court. To do so, the representative must have a death certificate and any registered will that names them as the executor. Most courts require an estimate of the value of assets at the time of death with the petition, too.
After the courts agree to open the case for probate, now the representative will request a letter of administration. The letter grants them the authority to access bank accounts and other assets tied to the estate as part of their role. They will need this letter to transfer assets in the deceased’s name, sell or acquire new assets, and eventually administer the estate.
Identify the Assets of the Estate
Once you have the letter of administration, you must identify any assets of the estate and collect them.
You may need to collect bank statements, investment account statements, and any records of tangible property. Even after you collect and identify, you must also appraise the property. Hire a licensed appraiser to value the property, because it may have changed since the will or trust was initially created. It is your duty to professionally appraise these items. By doing so, you can decide the value of the asset. Then you can also avoid any disputes over assets and use whatever assets you need to sell in order to finalize debts.
You also have to file an inventory report with the appraised values within a specified amount of time. So start the asset collection process quickly.
Opening an Account Dedicated to the Estate Only
Next, you must open a bank account for the estate. You will need to have a federal tax ID number for the estate when you open it, and that tax ID is used to open that bank account. The new bank account is where you can move funds from all other accounts in the deceased’s name, and then you will use those funds to pay any outstanding debts, taxes, and other expenses connected to the estate administration process. All remaining funds, when you are ready to distribute assets, will go to the named beneficiaries of the will.
Notice to Creditors
Another duty is to notify creditors of the death. Creditors then have time, which is dictated by state law, to file any claims against the estate for payment. Once you receive those claims, you must pay all legitimate debts first. If the creditor doesn’t file within the limitation, then you do not have to pay them. You should consult an estate attorney, however, before assuming you can forgo payment on an estate’s debt.
Accounting of All Financial Activity
As the representative, you must keep detailed records. You need to document all financial activity for the estate, including fees, your wages, debts paid, assets acquired and/or sold, etc. These reports can be given to beneficiaries upon request as well as to the court. The court might require that you file reports periodically.
Filling the Final Tax Return
Before you can distribute assets or pay debts, you must first file the estate’s tax return and pay any taxes due. You should work alongside an accountant because this is not like your ordinary tax return.
Paying All Debts to Creditors
Any outstanding debts must also be paid. You will have any creditors who made claims against the estate, along with any lists of debts you know of, that you must pay using estate funds. As the personal representative, you are able to access account funds and sell assets, as necessary, to pay off debts.
Distribute to Beneficiaries
Once all other steps are completed, debts are satisfied, and the court gives you approval, you can then distribute assets to the beneficiaries.
By now, a few months have passed, and you will still need to keep detailed records of your hours, costs, and retain receipts for payments.
Do You Need an Attorney to Assist with the Personal Representative’s Role?
Sometimes, it is best to have an attorney help with the personal representative’s duties. Whether you are the personal representative of an estate that needs help, or you are creating an estate plan and deciding who to appoint, consulting with a local estate attorney is one of the best first steps you can take.
An attorney can help you navigate through the duties of the role, offer opinions when selecting your representative, and also make sure that your estate plan clearly outlines what the personal representative will do with your assets so that loved ones are cared for.
To explore your options, contact attorney Andrew M. Lamkin, P.C. He has helped countless representatives close out estates and has helped numerous individuals create estate plans that guide their representatives and care for their loved ones, even when they are no longer there to do so themselves.
Schedule a free consultation by calling the office or request more information by completing the online contact form.