From the desk of San Diego Probate and Trust Attorney, Kristina R. Hess
With Contribution and Research by Klint LeBlang
The Personal Representative
The person named as executor in the Will will usually be appointed the personal representative. The personal representative is responsible for managing the estate and following both the probate Rules of Court and the procedures. The executor has no authority to act as the personal representative until he or she is appointed by the court and formal “Letters” are issued by the Court Clerk. If the Will does not name an executor, if the person named executor is unable to be executor or does not want to be executor, or if there is no Will, the probate court appoints an administrator to handle the process. This is typically the closest living relative, or a person who will inherit some portion of the decedent’s assets. If an executor decides to be the personal representative, he or she can resign at any time. However, he or she still may have to give an “accounting” to the Court for the time served.
To help with the process, the personal representative should live nearby to the decedent and be familiar with the decedent’s finances.
The personal representative does not have to be a legal or financial expert, but must have reasonable prudence and judgment and be particularly careful, honest, loyal, impartial and diligent. Exercise of these character traits are commonly referred to as “fiduciary duties.” This is why it is strongly recommended to consult an experienced probate attorney to ensure these fiduciary duties are adequately met.
The following people cannot be a personal representative:
- a minor,
- a person subject to a conservatorship or otherwise incapable of performing the duties of personal representative,
- a surviving business partner of the decedent, if an interested person objects (unless the Will names the partner as executor), or
- a non-resident of the U.S. (unless the Will names the non-resident as executor).
Duties Of The Personal Representative
The personal representative cannot do any of the following things without the Court’s permission:
- pay fees to himself or herself,
- pay fees to his or her attorney,
- make a preliminary distribution of property to beneficiaries (with a few exceptions), or
- close the estate.
Further, sometimes the Court’s permission is required to sell real estate or business interests owned by the estate.
The personal representative has a number of duties including, but not limited to:
- deciding if there are any probate assets;
- locating the decedent’s assets and managing them during the probate process;
- receiving payments due to the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits)
- figuring out who is going to get what and how much under the Will. If there is no Will, the administrator will have to look at state law (Probate code Sections 6400 – 6414, called “intestate succession” statutes) to find out who the decedent’s heirs are and determine each heir’s share of the estate;
- valuing or appraising the estate’s assets;
- giving official legal notice to creditors and potential creditors of the probate proceeding and the deadlines for creditors to file claims, according to state law;
- handling day-to-day details, such as disconnecting utilities, ending leases and credit cards, and notifying banks and government agencies — such as Social Security, the post office, etc.;
- filing tax returns and paying income and estate taxes – including a final state and federal income tax return covering the period from the beginning of the tax year to the date of death;
- distributing the decedent’s property to the people or organizations named in the Will, or to the decedent’s heirs if there is no Will after getting the court’s permission; and
- filing receipts for distribution and wrapping up any closing details for the estate.
The Court does not supervise the personal representative. Therefore, it is crucial to understand all the duties fully and comprehensibly.
Although it may seem overwhelming, the personal representative usually earns a statutory fee between 2% – 4% of the probate estate, including out-of-pocket expenses to manage and settle the estate. This percentage varies and can drop depending on the size of the estate (the percentage drops for larger estates). The fees earned as personal representative are taxable as ordinary income and must be reported.
Failure Of The Personal Representative To Perform His Or Her Duty
The Court may lower or deny compensation and can replace the personal representative with someone else if the personal representative fails or improperly performs their duties. Additionally, the personal representative may be liable to pay damages he or she caused in the process. A personal representative may be held liable for:
- improperly managing the assets of the estate,
- failing to collect claims and money due the estate,
- overpaying creditors,
- selling an asset without the authority to do so, or at an inappropriate price,
- not filing tax returns on time,
- distributing property to the wrong beneficiaries, or
- distributing property to beneficiaries before all creditors have been paid, etc.
Consulting an experience probate attorney can help the personal representative meet all deadlines and avoid mistakes and delays and help avoid disagreements among family member over minor or major issues.
Probate in California is a long and lengthy process that can be extremely confusing to a family that does not have experience with the probate process. It is commonly recommended that a family contact an experienced probate attorney to help administer the estate.
If you missed the last blog post on the overview of probate, you can find it here.
If you are currently in probate or have questions regarding probate, please contact our office today.
Please note that this blog is not intended to provide legal advice and is for general informational purposes only.
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Kristina Hess, San Diego Probate Attorney