What Are The Duties Of A Personal Representative?

As a probate lawyer, quite frequently, I see individuals appointed to be Personal Representatives, but they find themselves in the difficult situation of not fully understanding their duties and responsibilities.  That is when they often turn to me to advise them regarding their responsibility to the Estate.

Idaho Code § 15-3-703(a) defines the general duties of the Personal Representative.

• A personal representative is a fiduciary who shall observe the standards of care applicable to trustees as described by section 15-7-302 of this code. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and this code, and as expeditiously and efficiently as is consistent with the best interests of the estate. He shall use the authority conferred upon him by this code, the terms of the will, if any, and any order in proceedings to which he is party for the best interests of successors to the estate.

Now there is a lot of “legal” language in that code section, and you may be thinking, what does this mean in plain English?  In plain English, the Personal Representative must always act in the best interest of the Estate.  Conflicts can arise when the Personal Representative is also an “heir” under the Estate.  It is not uncommon for the interest of an “heir” to conflict with what is in the best interest of the Estate.  In those circumstances, the best interest of the Estate always “trumps” the individual wishes of an heir when a conflict arises.

Once you have been appointed Personal Representative the primary duty becomes to liquidate the Estate to distribute the proceeds to the heirs.  The Estate becomes akin to an individual and is treated as a separate entity.  Once an estate is opened, the Estate must obtain an EIN number from the IRS.  That EIN number is then used to open and Estate bank account, and for filing federal and state taxes.   All proceeds from liquidating assets are placed into the Estate bank account.  It is the responsibility of the Personal Representative to obtain the EIN number, open the Estate account and liquidate assets of the estate.  An heir at any time can request an accounting, so it is very important that the Personal Representative save receipts, record transactions and keep accurate records of monies received and monies spent.  If an heir suspects that the Personal Representative is not acting in the best interest of the Estate, the heir may petition the court to remove the Personal Representative, and if it can be established that the Personal Representative has mishandled funds from the Estate the Personal Representative can be liable to the Estate.

Finally, when it comes to distribution of funds it is important for the Personal Representative to divide the funds according to the Will or if there is no Will then the law requires that funds be distributed in equal shares to the heirs according to their relationship to the deceased.   Problems can arise if the Personal Representative has chosen not to liquidate all the assets and chooses to pass an asset, such as a car, to an heir.  If the heirs can all agree on the value of the car, then great, but more frequently than not, the value is disputed and precious resources of the Estate are used fighting about the value of the item.  This is one reason I encourage my probate law clients that if the value of any item can’t be agreed upon by the heirs, then the item should be sold in a forum, such as a public auction, and the proceeds then placed into the Estate.  The heir who wants the item can bid on the item at the public auction, and a true value is established.  After all the value of any item is only what a willing buyer will pay for the item.