Common Mistakes Personal Representatives Make

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Probate is the process of settling a deceased person’s estate through the probate court system. Being named the personal representative of another person’s estate is a big responsibility; you are charged with carrying out someone’s last wishes, distributing their assets, and following the law. It can be stressful, especially if you are grieving the loss of your loved one or are not familiar with the probate process.

Unfortunately, the estate administration process is not always an intuitive one or an easy one. Mistakes are common, and can lead to unnecessary delay and increased costs—and in some cases, liability for the personal representative. Here are some of the most common mistakes to avoid as a personal representative.

Assuming that Probate is Just One Process

“Probate” is the overall term for administering an estate through the probate court system, but that doesn’t mean that there is only one probate process. Depending on the size and complexity of an estate, formal probate, informal probate, supervised administration, or unsupervised administration. These different processes have different rules and varying levels of court involvement. There are also streamlined “small estates” processes for estates with minimal assets. Choosing the wrong process can result in needless delays and expenses.

Delaying the Start of the Probate Process

One of the most common mistakes personal representatives make is not opening a probate estate with the probate court right away. It’s understandable; you may be grieving and dealing with other issues in the days and weeks following a loved one’s death.

Unfortunately, if no person with priority to serve as personal representative has been appointed by the probate court within just 42 days of the decedent’s death, a creditor of the estate can petition to open an estate and have a representative of their choosing appointed. At that point, the administration of the estate is no longer in the hands of the person the decedent would have chosen. If no one has opened an estate within 63 days of the death, the probate court may appoint a public administrator. Unless you want to take the risk of one of those things happening, you should petition to open a probate case for your loved one’s estate as soon as possible.

Failing to Keep Proper Records and Communicate with Beneficiaries

Another of the common mistakes personal representatives make is failing to keep adequate records.As the personal representative of an estate, you are a fiduciary: someone obligated to put the interests of another party (the estate and its beneficiaries) first.

As such, you need to keep meticulous records of your transactions on behalf of the estate: income collected, payments made, and so on. Failing to keep proper records, inform beneficiaries, and report to the court when necessary can lead unhappy heirs to take legal action, perhaps even seeking removal of the personal representative.

Mishandling of Estate Assets

Often heirs become frustrated that the probate case is not moving as quickly as they’d like and suspect misconduct, even if the personal representative is doing everything as they should. Unfortunately, sometimes, personal representatives really do mishandle estate funds, whether intentionally or otherwise.

That may look like “borrowing” from the estate or commingling estate assets with the personal representative’s own funds, or prematurely distributing assets to some heirs at the expense of others or of creditors. Mishandling of estate assets can lead to personal liability for a personal representative, so consult with an experienced Michigan probate attorney to ensure you are following the law.

Failing to Notify Creditors or Pay Debts in the Right Order

Almost everyone who dies has some creditors, such as their credit card company or the healthcare facility that cared for them in their final illness. When creditors are notified of a decedent’s estate under Michigan law, they have a limited time to present a claim against the estate. If they fail to do so, the claim is forever barred.

Dealing with creditors is the source of a number of personal representative mistakes. You may be so eager to take care of the estate business that you pay estate claims as they come in without regard to the priority established by law. If a creditor whose claim has higher priority goes unpaid because you paid other claims first and there is no longer enough left in the estate to pay them, you could be liable. You could also be liable if you fail to give a creditor proper notice and they learn of the estate only after its assets have already been distributed.

Thinking You Have to Go It Alone

Not getting the legal help they need is one of the biggest mistakes personal representatives make. An experienced probate attorney can help you choose the right probate process for the estate you are administering, ensure that you are meeting court requirements and deadlines, and help you notify heirs and creditors according to the law. An attorney will also help you pay the estate’s debts in the proper order, as well as appropriately distribute estate assets to heirs and beneficiaries and close the estate.

Because a probate attorney’s services are generally considered a benefit to the estate, the attorney’s reasonable fees are paid out of estate funds—not the personal representative’s pocket.

To learn more about common probate mistakes and how to avoid them, contact Suzanne R. Fanning PLLC to schedule a consultation.