Margot G. Birke
Understanding the Role of Personal Representative
When creating your estate plan, you will be faced with many important decisions that must be made before your plan can be finalized. For example, you will need to decide who should receive your assets, your wishes for end of life medical care, and who should be appointed your personal representative. This last decision is especially important because a personal representative is the person who is in charge of overseeing and carrying out the administration of your estate when you pass away. If you name someone who is not suited for this important responsibility, your wishes may not be fully carried out in the manner that you had hoped.
Important Responsibilities of a Personal Representative During Estate Administration
In order to choose the best person to be the personal representative of your estate, you must first understand what the role entails. What are some of the duties of a personal representative? The following is an overview:
Communicating regularly and effectively with the interested parties of the estate. Good communication often goes a long way towards preventing or resolving disputes that can otherwise arise during the estate administration process. If your personal representative is not an effective communicator, this could lead to mistrust and disagreements during the administration of your estate.
Identifying the assets of the estate. This can sometimes be one of the more difficult responsibilities of a personal representative. The person serving in this role has an obligation to manage and protect the assets of the estate. To do so, he or she must first know what and where the assets are. You can make this task simpler by keeping clear and accurate records for your personal representative. However, the personal representative must also be capable and willing to do some investigating in order to ensure that all assets have been identified.
Providing notice to creditors and other interested parties whenever called for. At various points during the estate administration process, your personal representative will be called upon to provide notice of the administration proceedings to various parties. These parties may include creditors of the estate, beneficiaries, or blood relatives.
Creating an accounting of the financial activity relating to the estate administration at various points during the estate administration process. By law and potentially in accordance with the terms of your estate planning documents, your personal representative is required to create an accounting that shows the income and expenses associated with the estate and its administration. The personal representative must therefore be organized, detailed, and capable of preparing such a report; or, at a minimum, willing to obtain help from an experienced estate administration attorney.
Filing all tax returns. Administering an estate can often involve many obligations relating to the IRS. Preparing and filing tax returns is an important duty of a personal representative. Failing to fulfill these obligations can have costly consequences. Most personal representatives are advised to seek assistance from an estate administration attorney and a knowledgeable CPA in order to ensure that all of the tax obligations of the estate are fully satisfied.
Distributing the assets of the estate to the appropriate parties. The ultimate goal of the estate administration process is for your assets to pass to the parties that you wish to receive them. The personal representative is tasked with the responsibility of carrying this act out. Assets must be distributed accurately and efficiently.
Closing the estate. Once the debts of the estate have been paid, the assets have been distributed, and all of the other obligations of the personal representative have been satisfied, the next task is to close the estate. There are various methods for accomplishing this task. Your personal representative’s attorney can help choose the method that is best for your estate’s administration.