Every estate planning process that includes a last will and testament (i.e, every estate plan!) will require naming someone as the personal representative, a/k/a executor, of your estate. Most of my clients name a spouse, so they don’t have to give much thought to this designation. However, there have been clients who had a difficult time deciding who to name. Some clients are single or have a spouse who is incompetent or in the last days or weeks of life. Other clients didn’t have a relationship with their children, or they didn’t have children, some had no living family members or the family that was still living was only interested in their money and not them personally. These situations left them perplexed over who to name as the personal representative, that is, the person who will eventually be their estate administrator.
Even if you name a spouse, who is the back-up person? That is, who will be the personal representative if your spouse dies or is unable to act as the personal representative? When you talk with me for an estate planning consult, I always ask you for your back up plan, your alternatives. You must have a back-up; you must plan for the unexpected.
The Personal Representative Can Be a Beneficiary, But Doesn’t Have to Be
The personal representative’s power over assets requires naming someone who will be responsible and trustworthy. That means, the person you may feel obligated to name may not be the best choice. Many clients believe that, after the spouse, the oldest child should be named as the “executor” because he or she is the oldest and thus the person obligated to take on the responsibility of administering the parents’ estate. Some fear the oldest child will be angry if passed over for a younger sibling for this duty. (side note: you’re dead! why do you care if the oldest child is angry?) Do not ever feel obligated to name a particular person because of a birth order. What if the oldest child won’t be fair and honest to his or her siblings? What if he or she will try to keep money or other assets to himself or herself?
Think through this decision carefully. To help you determine who will be the best person to be responsible for your estate, it will help to know a little more about what the personal representative is and does.
What is a Personal Representative a/k/a Executor?
In Alabama, a personal representative is responsible for handling the administration of an individual’s estate after their death. The personal representative is appointed either by a last will and testament or by the court if there is no will or if the named executor is unable or unwilling to serve. It is important to note that, failing to have a last will and testament, means you don’t get to name who manages and is responsible for your estate. That is, you don’t choose who manages your assets, a judge chooses for you.
Duties of a Personal Representative
The duties and responsibilities of a personal representative in an Alabama estate administration include, but are not limited to the following:
- Petitioning for appointment: The personal representative initiates the probate process by retaining an attorney who practices probate law, in particular estate administration, and then filing a petition with the probate court to be appointed as the representative of the estate.
- Obtaining letters testamentary or letters of administration: Once appointed, the personal representative receives official documentation, such as letters testamentary (when there’s a will) or letters of administration (when there’s not a will), which authorize them to act on behalf of the estate.
- Identifying and collecting assets: The personal representative must locate and identify all assets owned by the decedent, including bank accounts, investments, real estate, personal property, and any other assets. If there is not a will, or the will doesn’t waive the inventory requirement, the personal representative will have to file an inventory of assets and liabilities with the Probate Court. Generally, though, a carefully drafted last will and testament will waive the inventory filing requirement.
- Monitoring mail: The personal representative will have to monitor the decedent’s mail and ensure that all mail comes to him or her.
- Open estate checking account: The personal representative will have to secure a federal tax id number and open an estate checking account to pay bills of the estate, such as attorney’s fees, and accept any funds coming into the estate.
- Notifying creditors and paying debts: The personal representative is responsible for notifying creditors of the decedent’s death and the opening of the estate. They will work with the attorney, and possibly the Court, to determine the validity of any claims against the estate and pay the debts and expenses using estate funds. Before a personal representative pays any debts of a decedent, they need to talk with the estate’s attorney.
- Managing and protecting assets: The personal representative has a duty to safeguard the estate’s assets during the administration process. This may involve managing investments, maintaining property, and ensuring insurance coverage remains in effect.
- Filing tax returns: The personal representative is responsible for filing any necessary tax returns on behalf of the decedent and the estate. This includes the decedent’s final income tax return, estate tax returns (if applicable), and any other required filings.
- Distributing assets to beneficiaries: Once all debts, taxes, and expenses have been paid, the personal representative is responsible for distributing the remaining assets to the beneficiaries according to the terms of the will or the laws of intestacy if there is no will. This may require permission from the Court if there is not a will.
- Providing an accounting: The personal representative may be required to prepare and file an accounting with the probate court, detailing the income, expenses, and distributions made from the estate. This requirement is generally waived in a carefully prepared last will and testament. However, it will be required if the decedent died without a will.
The specific duties of a personal representative can vary depending on the complexity of the estate, whether there was a will, and if there was a will, the instructions provided in the decedent’s will. The above list is not an exhaustive list of responsibilities for a personal representative.
Personal Representative Fees
Understanding some of what your personal representative will do, who do you trust to carry out those responsibilities? Do you want to leave these responsibilities in the hands of your spouse, children, or other family? If not, you can name a professional such as an attorney, tax professional, or trust administration company. Professionals will charge fees for their services; however, even your non-professional personal representative is entitled to a fee for serving.
Schedule an Estate Planning Consult Today
If you are unsure who to name, don’t let that uncertainty delay scheduling an appointment with Tanya to discuss your estate plan. If you don’t already have an estate plan, you need to have that estate plan prepared today. Contact Tanya to discuss why having an estate plan is important and why you need one.
Estate planning is easy as easy as 1-2-3. (1) Go to my website (www.huntsvilleestateplanninglawyers.com) and click on “Schedule a Legal Strategy Call NOW”, (2) schedule your free virtual consultation where we’ll discuss your needs and goals. After that legal strategy meeting, I’ll prepare the documents that best fit your needs and family. Then (3) sign your estate planning documents and have peace of mind that your family is protected.