Choosing a Personal Representative

Choosing a Personal Representative for your estate is one of the most important decisions you will make.  Your Personal Representative has complete authority over the administration of your Estate.  The Personal Representative also has significant responsibilities, including settling creditor claims, filing individual and estate tax returns, accumulating and valuing assets, closing bank and investment accounts and transferring them to newly created estate accounts, handling the immediate needs of the family and disbursing the remaining assets to the named beneficiaries.

The Personal Representative can be related to the deceased person, can be a friend or a lawyer, accountant, or other professional. The main requirement is that the person chosen as Personal Representative is at least 18 years old, a US resident, and has not been convicted of a felony.   No matter whom you choose, the Personal Representative should have a solid base of financial knowledge, personal integrity, familiarity with the needs of your estate and be competent, willing and available to take on such responsibilities.

The Personal Representative owes fiduciary duties to anyone who has an interest in the estate and must act in the best interests of the estate.  For example, if the Personal Representative mismanages the estate assets, even unintentionally, he or she can be held personally liable and may have to repay the estate for any losses.  The Personal Representative’s responsibilities carry not only legal liability but also the risk of unpopularity with the beneficiaries.  In addition, he or she cannot take advantage of his or her position or unfairly profit from financial transactions from your estate. For these reasons, you should give careful thought to your choice of Personal Representative.

Things to Consider When Choosing A Personal Representative. 

Many people tend to automatically choose a spouse, adult child, sibling or a close friend to act as an Personal Representative and to administrate their wills upon their death.  Some people want to name all of their children to serve as Personal Representative so that there are no hurt feelings and no one feels left out.  Others simply choose the eldest child, regardless of that child’s ability to do the job.  Deciding on your Personal Representative, however, is not about making people feel good, avoiding hurt feelings or choosing the closest in relation.  It is about ensuring that your wishes are carried out in a timely manner upon your death. Because of the intricacies that go with the job, the most competent person should be chosen.  Although, it may be an honor to be named an Personal Representative, in many instances those not named as Personal Representative should be grateful.

When deciding who to appoint as Personal Representative, considerable knowledge of financial matters is not necessarily the most crucial factor.  A Personal Representative is able to seek assistance from an attorney, accountant or other professional consultant to help with various aspects of the probate process.  Ideally, you want someone you can trust to handle the financial affairs for your beneficiaries and who hasn’t had financial problems of their own.  The person you choose should be able to handle the tasks and also should not have an unreasonable burden placed upon him or her that would interfere with his or her job or other obligations.

You have to have complete faith in your Personal Representative.  Although your Personal Representative is required to follow your directions, he or she may be forced to make unforeseen judgment calls so you want to make sure that your Personal Representative would act according to your wishes.  You should consider someone who knows your values, your wishes and your family dynamics.

It is oftentimes beneficial to appoint someone who lives in the same local area where probate proceedings will take place, as an out-of-state Personal Representative may find it more difficult to work with heirs, take care of paperwork and attend court appearances. However, if the person most trustworthy and most willing lives out of state, you should choose that person over someone close about whom you have doubts.  You should also name someone who is healthy and likely to be around after your death and the completion of the probate process.

Naming Co-Personal Representatives

Although there can be more than one person charged with this job, it is seldom advisable.  Naming co-Personal Representatives is often not as efficient as naming one person to serve as Personal Representative.  If you name co-Personal Representatives, both Personal Representatives would have to perform all of their duties in tandem.  Having to act in unison can prove to be cumbersome and slow down the probate process, particularly if the co-Personal Representatives live in different states.

If you want to name multiple persons to share the responsibility of being your Personal Representative, keep in mind that there will be many decisions to be made and it is common for co-Personal Representatives to disagree. Conflicts may arise.  If there is a disagreement between the Personal Representatives, the estate administration may be delayed and the dispute might have to be taken to the probate court or to mediation to get resolution on the issue.

Naming an Alternate Personal Representative

You should always name an alternate Personal Representative in the event that your primary Personal Representative becomes ill, dies before you do, or declines to serve in the role.  An alternate Personal Representative is not a co-Personal Representative.  An alternate Personal Representative only has responsibilities if the primary Personal Representative is unable or unwilling to serve, or predeceases you.  Naming an alternate Personal Representative will prevent the court from intervening and appointing a new Personal Representative for you.  The person appointed by the court may not be someone you would have chosen.

Professional Personal Representatives

Although Personal Representatives can always hire professionals to advise them and assist them in the administration of the estate, there are some reasons for choosing a professional Personal Representative instead of a family member or friend.   Your family or friends may be overwhelmed by grief, illness or disability.  Nonetheless, he or she as Personal Representative will be personally liable for any mismanagement of your estate, such as unpaid estate and income taxes or payments to creditors without properly filed claims against the estate.

If your estate is particularly complex or controversial, you might consider choosing a lawyer, accountant or trust company.  Serving as Personal Representative can be a time-consuming and stressful task.  Your family or friends may not have the necessary experience, time and skills to successfully carry out their responsibilities.  However, professionals may offer the familiarity with tax law, investment management, real estate or business administration which may be required to administer your estate effectively and efficiently.    In addition, a professional Personal Representative is unlikely to refuse to serve or to resign.

In some limited circumstances it may be a good idea to name a professional as a co-Personal Representative with a family member or friend.  Although your estate may be more difficult to administer, a professional co-Personal Representative can add an impartial element to the administration of your estate while your family member knows your family dynamics and has the knowledge of your affairs.

Personal Representative Fees

Your Personal Representative has the right to be paid for his or her services.  If the Personal Representative is a family member he or she may choose to forgo the Personal Representative’s fee but you can expect a professional Personal Representative, such as a lawyer, accountant or trust company, to charge a fee.   If you do not make any provisions in your Will, your Personal Representative can apply to the Probate Court for a reasonable fee.  Fees received by Personal Representatives are taxable as income.

Once you have weighed all of these considerations and have decided on whom to name as Personal Representative, make sure you ask them if they are willing to accept the responsibility and that they understand the responsibilities of the job.  Your selections may be meaningless if the persons object to the appointment.   Just imagine all your effort in analyzing who will be your Personal Representative, naming them and having them renounce their appointment.

The bottom line is that most people assume that being an Personal Representative is an easy task that can be accomplished by anyone, but because the probate process is often complex and involved, only a trustworthy, intelligent and dependable person should be named as Personal Representative.