We speak with our clients often about the importance of good estate planning – making sure that they have their Last Will and Testament (Will) in place, as well as their other documents such as Durable Power of Attorney, Health Care Proxy, Living Will and HIPAA Authorization and Release Form.
However, just as important as ensuring that a client has the right documents in place is helping them to understand the importance of choosing the right people to take on important roles with respect to their documents. One of these is the role of the Personal Representative, the person who is responsible for ensuring that the “instructions” for how your personal belongings and assets are to be managed and distributed upon your death.
The Personal Representative’s role is incredibly important and one which should be taken very seriously. Typically, your Will names a loved one as the Personal Representative to manage and settle the estate. If you have been asked to be a Personal Representative, you may be wondering what a Personal Representative is and exactly what your responsibilities will be? Below are the things you should know about the role of the Personal Representative in Massachusetts.
1. What is a Personal Representative?
Formerly known as an executor or executrix, the Personal Representative is charged with gathering the assets, notifying all beneficiaries and creditors, paying all legitimate expenses and debts, and finally, distributing any remaining assets to the beneficiaries all in accordance with the terms of the Will. The Personal Representative is also responsible for filing all federal and state tax returns for the deceased person, and if necessary, preparing and filing an estate tax return. Additional tasks may include redeeming any life insurance policies and cancelling any unneeded services, such as newspaper delivery, utilities, auto insurance, etc.
2. What does it mean to be a “fiduciary”?
Overriding this entire role is a duty of loyalty to protect and act in the best interests of all beneficiaries and any estate holders, such as a creditor. The Personal Representative is required to act with reasonable care in administrating the estate in a diligent manner. Self dealing for the benefit of the personal representative that harms the estate is strongly prohibited, unless allowed specifically by the terms of Will.
3. What are some of the duties of the Personal Representative?
The Personal Representative must gather, secure and account for the estate assets. The value of these assets is determined as of the date of death. The Personal Representative will also need to collect and pay all legitimate debts of the estate. These debts could include loan payments, credit cards, mortgages, personal and property taxes, etc. This is why it is so important to maintain and keep good records on all estate transactions. Each creditor must be notified of the decedent’s passing and be given an opportunity file a claim against the estate. If the estate assets are not sufficient to pay all the claims, creditors will be paid according to the priority of its claims as determined by the Probate and Family Court.
4. How does the Personal Representative get authority to act on behalf of the estate?
Often with the assistance of an attorney, a Personal Representative must petition and be appointed by Order of the Probate and Family Court. Typically, the Personal Representative named in the Will must file with the Probate and Family Court the original, signed Will along with a certified Death Certificate while requesting in a Petition they be named as the Personal Representative. All persons who have an interest in an estate, such as those named in the Will, must be notified of the Probate Petition. Upon approval by the Probate and Family Court, you will receive a Letter of Authority. This will allow you to act on behalf of the estate.
5. Does the Personal Representative need to wait until they are appointed by the Probate and Family Court?
Yes and no. Prior to appointment, a person named in a Will may carry out written instructions of the decedent relating to the disposition of the decedent’s body, funeral, and burial arrangements. The Personal Representative will want to review any written directions the decedent may have provided regarding burial and funeral arrangements. Sometimes, the decedent may have made prior arrangements with a funeral home and left detailed written instructions regarding these matters.
On the other hand, if access is needed for such things as the decedent’s bank accounts, conveying real estate, or access to a safety deposit box, you will need the Letter of Authority to act on behalf of the estate.
6. Can the Personal Representative get paid?
As Personal Representative, you may be entitled to compensation. The Probate and Family Court will require detailed records as to the time and activities that you have spent on behalf of the estate. The fee that can be charged depends on several factors such as the size of the estate, experience that you may have in handling these types of matters and the complexity of winding down the estate.
While this is a brief overview of the role of a Personal Representative, the administration and settling an estate can be a complex and time-consuming process. Utilizing the services of a Probate Attorney is often very helpful to ensure the estate conforms to the legal requirements and settled in accordance with the decedent’s wishes.
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