WHAT IS a Personal Representative
A personal representative is the executor or administrator for the estate of a deceased person. Personal representatives serve as fiduciaries of the beneficiaries of estates, and have the duty to act in good faith, and in the best interests of the estate’s beneficiaries. The law requires personal representatives to follow the terms of the deceased person’s will, if the individual who died had one.
Personal representative also refers to an individual with authority to make decisions over others. For example, the person authorized to make health-care-related decisions for another person because the latter is very ill or not lucid is a personal representative. In this case, a personal representative has power of attorney, a legal document that allows the representative to act for the other person when making legal or financial decisions.
BREAKING DOWN Personal Representative
A personal representative typically performs a number of tasks when acting as the executor of a deceased person's estate, including arranging funeral services, notifying those who are entitled to part of the estate’s property, and determining the value of the estate, minus any debts. A personal representative usually arranges for the management and security of estate property, handles payments of all debts and expenses owed by both the deceased and the estate, and assesses income-tax and estate-tax liabilities. Lastly, a personal representative files all needed tax returns on time and distributes estate property according to the will.
In most cases, a personal representative generally is a close relative or friend of the deceased. Given the significant amount of work involved, a personal representative often receives compensation from the estate. Not all work must be performed by the personal representative, though. For example, the personal representative usually works closely with lawyers and tax professionals. The personal representative merely ensures that all the tasks related to the estate are handled properly and in a timely manner.
The Burden of Being a Personal Representative
A personal representative usually is named in a will. However, courts sometimes appoint a personal representative.
Being a personal representative requires a flurry of work in a short amount of time. Sometimes, it’s frustrating, especially if beneficiaries squabble about the estate or contest the will. Also, a personal representative typically is personally liable for any claims of fraud or mismanagement by the beneficiaries.
Of course, there’s hired help to make the job easier, such as estate lawyers. Another option is online tools. Some offer guidance about what to do next, allow documents to be shared with beneficiaries electronically, and set a timeline for all the steps throughout the the entire process.