Making a last will and testament involves more than simply deciding who gets what property after someone passes away. Other important decisions include who will serve as the personal representative of the estate after the death. Once appointed, courts can refer to personal representatives as "executors" if designated by a will, or as "administrators" if solely court-appointed.
Friends and family of the deceased do not always understand the duties of personal representatives and the roles they play during the probate process. While specific duties will vary from case to case, the following is a brief overview of what a personal representative should do during probate.
Take inventory of the estate assets - The first major job of a personal representative is to identify all assets of the estate and collect them. The will may mention many assets but not all of them. Estate inventory may involve:
- Identifying any unpaid dividends, debts, or interest owed to the deceased
- Getting professional appraisals of any property of value
- Identifying whether the deceased had any cash, other than that in a financial account
- Listing all personal and real property to be distributed
The personal representative must submit a report of the estate assets and property to the court.
Notify and respond to creditors - The personal representative will also need to identify any creditors of the deceased and notify them of the death. Creditors will then have the opportunity to make claims that the estate will pay before the distribution of the estate. The personal representative, however, has the job of determining if a particular claim has merit. The personal representative should defend the estate against invalid claims, but should pay valid creditor claims from the estate's assets.
Taxes and accounting - The personal representative must prepare and file any necessary tax returns, which can include:
- Personal state and federal tax returns
- State and federal fiduciary tax returns
- State and federal estate tax returns, if applicable (if the estate is worth enough that any estate taxes would apply)
The personal representative must also keep close accounting records for the estate. This can include all payments to creditors, payments received, interest earned, regular expenses of the estate property, court costs, and more. The personal representative should maintain complete and accurate accounting records for the probate court or any beneficiaries who request them.
Notifying beneficiaries - The personal representative also has the job of locating and notifying any beneficiaries set to inherit under the will. If the deceased left no will, the court-appointed personal representative will need to locate and notify potential heirs under California intestacy laws.
Distributing assets - After settling all other financial matters regarding the estate, the personal representative must distribute the assets that remain to beneficiaries in accordance with the will provisions. This process can often take a less-than-straightforward path and can involve making difficult decisions. For example, the personal representative may need to sell certain property so that beneficiaries receive their due shares. The personal representative may need to decide which property to sell.
Once all creditors receive payments and all beneficiaries receive their proper distributions, the personal representative can petition for the court to close the estate.
The Fiduciary Duty of the Personal Representative
During the entire estate administration process, a personal representative owes a fiduciary duty to the beneficiaries of the estate. This is the highest legal duty of care, and courts take adherence to this duty seriously. This fiduciary duty means that personal representatives should always act with the interests of the beneficiaries as their priority. This means not wasting any estate assets, putting assets at risk, acting in self-serving ways, and more. This duty applies to all actions of the personal representative throughout the estate administration.
What if Personal Representatives Do Not Fulfill Their Duties?
Many personal representatives fail to fulfill their duties for a variety of reasons. Some may not understand the magnitude of the undertaking and may not have the knowledge or ability to complete all necessary tasks. In these situations, personal representatives should seek assistance from an attorney or another probate professional or should notify the court that they are unable to fulfill their duties. This does not always happen, however, and the estate assets may face jeopardy or unnecessary diminishment as a result. Other personal representatives may breach their fiduciary duties and, therefore, waste estate assets.
In either situation, a failure on the part of the personal representative can cause significant financial harm to beneficiaries.
California probate laws give beneficiaries the right to take certain legal actions:
- To remove the personal representative and appoint another one
- To hold representatives accountable for any harm they caused due to a breach of duty
Any type of estate litigation can grow complex, especially when it involves the breach of a fiduciary duty. You must prove that the personal representative's acts or omissions constituted a breach and that the estate--and beneficiaries--suffered financial losses as a result. Personal representatives have the opportunity to defend their actions and against any liability to beneficiaries. If you suspect that the personal representative of an estate has acted wrongfully or has neglected fiduciary duties, make your first call to a law firm that focuses on estate litigation.
Contact a Los Angeles and Santa Clara Estate Litigation Attorney for More Information
Personal representatives have significant responsibilities and duties during the administration of an estate, and their actions can result in significant financial consequences for beneficiaries. If you are the beneficiary of an estate who believes that the personal representative of the estate is failing to fulfill any duties or is engaging in misconduct, speak to an attorney as soon as you can.
Hackard Law has represented the rights of individuals involved in estate litigation for more than 30 years and will review the facts of your case at no cost to you. To discuss your estate litigation matter with an attorney, please call (213) 357-5200 for our Los Angeles office and (916) 313-3030 for our Santa Clara location, or send us an email through our online contact form.