Chapter 10 The Personal Representative

Wills, Trusts, and Estates Administration, 3e Herskowitz 2 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Learning Objectives Understand the general purpose of the personal representative Distinguish the different types of personal representatives Categorize the personal representative’s duties and obligations Understand why a representative would post a bond Understand when a representative can be personally liable to the beneficiaries

Wills, Trusts, and Estates Administration, 3e Herskowitz 3 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Purposes Of The Personal Representative To collect the testator’s assets To pay the estate’s debts To distribute the remaining assets to the beneficiaries, according to the testator’s wishes

Wills, Trusts, and Estates Administration, 3e Herskowitz 4 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Types of Personal Representatives One named in the testator’s will an executor or (female) executrix One appointed by a court when the decedent dies without a will an administrator or (female) administratix statutes prioritize who can be chosen

Wills, Trusts, and Estates Administration, 3e Herskowitz 5 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Special Circumstances Personal Representatives Administrator with Will Annexed administrator chosen by the court where the executor has predeceased the testator, or is unable to serve Special Administrator temporarily appointed by the court during an emergency, until the original representative is appointed

Wills, Trusts, and Estates Administration, 3e Herskowitz 6 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Special Circumstances Personal Representatives – Part II Administrator Pendente Lite one appointed during a will contest by one or more of the beneficiaries this administrator’s job is to preserve the estate during the suit Administrator Ad Litem one appointed during any other lawsuit related to the will the administrator represents the decedent’s interest in the suit

Wills, Trusts, and Estates Administration, 3e Herskowitz 7 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. What Establishes The Personal Representative’s Authority? Letters Testamentary a document granted by the probate court to the executor Letters of Administration this document is given to administrators, rather than executors

Wills, Trusts, and Estates Administration, 3e Herskowitz 8 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Duties of the Personal Representative Broad Duties Collect the decedent’s assets, including money owed to the decedent Pay debts, taxes, and estate costs Distribute the assets according to the will or intestacy statute Specific Duties Include… Publish notice to the estate’s creditors Sell or mortgage the estate’s real estate Find beneficiaries Invest liquid assets in prudent investments Open a bank account for the estate File claims for Social Security, pension, and other estate- entitled benefits

Wills, Trusts, and Estates Administration, 3e Herskowitz 9 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Personal Representative’s Bond What is it? a written promise to faithfully fulfill executor duties, secured by an amount of money How does it work? a surety or bondsman promises to pay the bond money posted to the court if the executor breaches his or her duties if the bond must be paid, the executor must pay the surety bond Must there be one? no…for two reasons: 1) some states don’t require them 2) even in states that do, the testator may, in his or her will, excuse it

Wills, Trusts, and Estates Administration, 3e Herskowitz 10 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. Removal Of The Personal Representative The personal representative may seek to be discharged But, the court could refuse the request The court may remove the representative if it is in the best interest of the estate Unsuitability or mismanagement would cause this removal

Wills, Trusts, and Estates Administration, 3e Herskowitz 11 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Personal Liability For The Personal Representative Could the personal representative be held personally liable? yes! if the representative breaches his or her fiduciary duties and causes the beneficiaries to suffer a loss as a result Is it likely to occur? no if the representative acts reasonably and in good faith, he or she would not be liable, even if a mistake is made

Wills, Trusts, and Estates Administration, 3e Herskowitz 12 © 2011, 2007, 2001 Pearson Higher Education, Upper Saddle River, NJ All Rights Reserved. The Paralegal’s Role in the Personal Representative’s Duties The paralegal can do the following in support of the lawyer’s task to help the personal representative: Draft documents the representative will need to help close the estate, including the letters testamentary Communicate with banks or other financial institutions Complete and file estate tax returns