What is a Personal Representative of an Estate?
If someone close to you has recently died, you may have received communication from the “personal representative of the estate.” In this blog post, we’ll discuss what a personal representative is, what they do, and what your rights are if a personal representative is not fulfilling their obligations. If you have been named personal representative of someone’s estate, this blog post will describe your duties and how to get the help you need to complete them properly.
Personal Representative vs. Executor: What’s the Difference?
If you are more familiar with the term “executor,” that is the same thing as a personal representative. Both refer to the person who is in charge of administering the estate of a deceased person (decedent). In many states, “executor” is the term used for a person named in the decedent’s will to manage their estate. “Administrator” describes the person appointed by a probate court to manage the estate of a decedent who died without a valid last will and testament (known as “dying intestate.”).
Both executors and administrators fall under the umbrella of “personal representative.” No personal representative has authority to act on behalf of an estate until they are formally appointed by the probate court, even if they were named in the decedent’s will.
Who Can Act as Personal Representative of an Estate?
If the decedent had a will that named a personal representative, that person will be appointed by the court unless there is some reason for their disqualification, such as a documented history of dishonest behavior or a lack of mental capacity to serve.
Can a personal representative be a beneficiary of an estate? Yes, and since most personal representatives are close family members of the decedent, they are usually beneficiaries as well. However, personal representatives are fiduciaries, which means they are obligated to act in the best interest of the estate and all beneficiaries, not just themselves.
Michigan law establishes a priority for who may be appointed as personal representative of an estate, in the following order:
- The personal representative named in the will;
- A surviving spouse if the spouse was a devisee (beneficiary) under the will;
- Other devisees named in the will;
- A surviving spouse;
- The decedent’s other heirs;
- After 42 days following the death, the nominee of a creditor if the court finds the nominee suitable;
- After 63 days following the death, the state or county public administrator under certain circumstances, such as if the decedent died with no known heirs.
A person who is named as personal representative in a will, or is otherwise entitled to be appointed, is not required to serve if they don’t want to or feel unable to. However, an experienced Michigan probate attorney can help make the process of serving as personal representative much easier.
If you are an heir or beneficiary of an estate, you also have the right to object to the appointment of a particular personal representative in a formal proceeding in the probate court.
What Are the Powers of a Personal Representative?
A personal representative who is acting in a reasonable manner for the benefit of those with an interest in the estate has numerous powers, including:
- Receiving property on behalf of the estate
- Perform or refuse performance of a contract entered into by the decedent that remains the obligation of the estate
- Deposit or invest estate funds if those funds are not immediately needed to meet estate obligations
- Acquire, dispose of, manage, or develop real property
- Insure estate property
- Borrow money on behalf of the estate to be repaid out of estate property
- Exercise a stock subscription or conversion right
- Continue a business operated by the decedent
- File a lawsuit on behalf of the estate, such as for the wrongful death of the decedent
What are the Duties of a Personal Representative?
Broadly speaking, the personal representative of the estate is responsible for managing the estate, paying its legitimate debts, and distributing any assets left over to the beneficiaries under a will or heirs at law. This broad description encompasses a number of specific tasks, including:
- Filing a petition to open the estate (along with proof of death) with the probate court in the county in which the decedent last resided
- Submitting the will (if any) to the probate court
- Identifying, gathering, securing, and making an inventory of the decedent’s assets
- Establishing a Tax ID for the estate and opening an estate bank account
- Notifying heirs and beneficiaries of the estate
- Providing notice to creditors of the estate
- Filing tax returns on behalf of the estate
- Paying the estate’s legitimate debts according to the priority established by law
- Providing heirs and beneficiaries with an accounting of estate activity, including funds received and disbursed by the estate
- Distributing all remaining assets after the payment of debts to heirs and beneficiaries as provided in the decedent’s will or by Michigan law if there was no valid will
Some states require the personal representative of an estate to live in the same state where probate proceedings are taking place; Michigan does not. However, it is important for out-of-state executors to have the help of a probate attorney in Michigan.
What if a Personal Representative isn’t Fulfilling Their Duties?
If you are an heir or beneficiary of an estate who believes the personal representative is not fulfilling their obligations, you have a few options. Let’s say the personal representative is not providing information beneficiaries are entitled to. You could go to the probate court and ask the judge to compel the personal representative to provide that information. If the personal representative still doesn’t provide the required information, you might need to return to the probate court and ask the judge to remove the personal representative.
Another option is to try to resolve the issue without going to court, such as through probate mediation. Probate mediation may be less costly and contentious than probate litigation, and may help to preserve family relationships.
To learn more about the powers and duties of a personal representative and the rights of beneficiaries of an estate, please contact Suzanne R. Fanning PLLC to schedule a consultation.